oversight

Charter Schools: New Charter Schools Across the Country and in the District of Columbia Face Similar Start-Up Challenges

Published by the Government Accountability Office on 2003-08-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Requesters




September 2003
                 CHARTER SCHOOLS

                 New Charter Schools
                 across the Country
                 and in the District of
                 Columbia Face Similar
                 Start-Up Challenges




GAO-03-899
                                                September 2003
DRAFT
                                                CHARTER SCHOOLS

                                                New Charter Schools across the Country
Highlights of GAO-03-899, a report to           and in the District of Columbia Face
congressional requesters
                                                Similar Start-Up Challenges



As of the 2002-2003 school year,                Securing a facility, obtaining start-up funding, and, to a lesser extent,
nearly 2,700 charter schools                    acquiring the expertise necessary to run a charter school are the three
operated in 36 states, the District of          greatest challenges facing new charter school founders nationwide, although
Columbia, and Puerto Rico. Charter              the extent of the challenges varied from state to state. Charter school
schools are public schools that are             advocates report that charter schools need buildings that allow them to grow
exempt from certain state and local
regulations in exchange for
                                                as their enrollment grows and that they have limited access to financing for
agreeing to certain student                     facilities—both of which make securing facilities one of the most difficult
performance goals.                              aspects of opening a new charter school. Additionally, charter schools
                                                report that obtaining start-up money, particularly early in the charter
To increase their understanding of              application and planning periods, is difficult. In gaining approval for
problems faced during the start-up              charters, they may incur significant expenses, such as hiring experts to
process, Congress included a                    review charters, purchasing curriculum programs, and placing down
provision in the Omnibus                        payments on facilities, before becoming eligible to receive most forms of
Appropriations Bill for Fiscal Year             public funding. Another challenge facing new charter school founders is
2003 (P.L. 108-7), which required               acquiring the expertise—business, legal, managerial—necessary to open and
GAO to report on charter school                 run a charter school.
start-ups, including a comparison
with charter schools in the District
of Columbia. This report examines               Several federal, state, and local programs are available to help charter
(1) the challenges faced by charter             schools address these challenges across the country and in the District of
school start-ups across the nation              Columbia. At the federal level, the Public Charter Schools Program has
and the resources available in                  awarded about $1 billion in grants since 1994 to charter schools to help
various states to address these                 offset their start up costs. The program has also provided additional funding
challenges and (2) how the District             for a limited number of grants to organizations to increase charter schools’
of Columbia compares in terms of                access to facilities financing. Some states also provide assistance to charter
charter school challenges and                   schools to address these challenges as shown in the following table.
resources. To address these
objectives, GAO analyzed federal,
state, and D.C. charter school laws
and interviewed Education and                    Type of assistance                                                                         Number of states
District officials, including                    Funding assistance for facilities                                                                11 and D.C.
representatives of the D.C. charter              Access to vacant public buildings                                                                18 and D.C.
school authorizing boards, the D.C.              Provide start-up grants or low or no interest loans                                               9 and D.C.
public school system, and various                Technical assistance programs                                                              28 and Puerto Rico
city offices. GAO also conducted a              Source: GAO analysis of state charter school laws and Education Commission of the States.
discussion group consisting of
District charter school experts and
D.C. charter school founders.                   The challenges facing D.C. charter schools are similar to those around the
                                                country; however, obtaining facilities is particularly difficult in D.C. due to
                                                the cost of real estate and poor condition of available buildings. To offset
                                                this challenge, the District provides charter schools with various forms of
                                                assistance, including a limited preference to buy or lease surplus public
                                                school buildings and a per-pupil allotment for the cost of facilities. To
                                                address challenges associated with start-up funding, the District provides
www.gao.gov/cgi-bin/getrpt?GAO-03-899           charter schools with some funding prior to schools’ opening. Although the
                                                District chartering authorities provide some guidance to charter applicants,
To view the full product, including the scope
and methodology, click on the link above.
                                                they do not provide them with general technical assistance.
For more information, contact Marnie Shaul,
(202) 512-7215 or shaulm@gao.gov.
Contents


Letter                                                                                            1
                       Results in Brief                                                           3
                       Background                                                                 4
                       Facilities, Funding, and, to a Lesser Extent, Expertise Pose
                         Challenges for New Charter Schools, but Some Assistance Is
                         Available                                                                9
                       District of Columbia Charter Schools Face Similar Challenges, but
                         More Facilities Assistance Is Available                                18
                       Concluding Observations                                                  27

Appendix I             Scope and Methodology                                                     29



Appendix II            Charter School Facility Assistance Provisions, as of
                       July 2003                                                                 30



Appendix III           Charter Schools Operating during 2002-03 School
                       Year in D.C. and Facility Status                                          33



Appendix IV            A Comparison of Number of Charter Schools and
                       Select Resources Available                                                35



Appendix V             GAO Contacts and Staff Acknowledgments                                    37
                       GAO Contacts                                                             37
                       Staff Acknowledgments                                                    37

Related GAO Products                                                                             38



Tables
                       Table 1: D.C. Chartering Authorities                                      8
                       Table 2: Major Types of Facilities Assistance Offered by States          11




                       Page i                                            GAO-03-899 Charter Schools
Figures
          Figure 1: Status of Charter School Laws by Jurisdiction as of July
                   2003                                                                              5
          Figure 2: Expertise Needed to Open a Charter School                                       16
          Figure 3: Kinds of Facilities Assistance Provided through the
                   District to Charter Schools Operating during School Year
                   2002-2003                                                                        24
          Figure 4: Timeline of D.C. Public Chartering Process and Eligibility
                   for Public Funds                                                                 25




          Abbreviations

          DCPS              District of Columbia Public Schools
          CSDC              Charter Schools Development Corporation
          PCS               Public Charter School
          QZAB              Qualified Zone Academy Bond




          This is a work of the U.S. government and is not subject to copyright protection in the
          United States. It may be reproduced and distributed in its entirety without further
          permission from GAO. However, because this work may contain copyrighted images or
          other material, permission from the copyright holder may be necessary if you wish to
          reproduce this material separately.




          Page ii                                                     GAO-03-899 Charter Schools
United States General Accounting Office
Washington, DC 20548




                                   September 3, 2003

                                   The Honorable Mike DeWine
                                   Chairman
                                   The Honorable Mary Landrieu
                                   Ranking Minority Member
                                   Subcommittee on the District of Columbia
                                   Committee on Appropriations
                                   United States Senate

                                   The Honorable Rodney P. Frelinghuysen
                                   Chairman
                                   The Honorable Chaka Fattah
                                   Ranking Minority Member
                                   Subcommittee on the District of Columbia
                                   Committee on Appropriations
                                   House of Representatives

                                   The growing popularity of educational choice was highlighted in a May
                                   2003 study by the Department of Education’s National Center for
                                   Education Statistics that reported a shift in public school enrollment away
                                   from public, assigned schools into public, chosen schools from
                                   1993-1999. Charter schools are one of the primary ways that parents can
                                   exercise choice in the public school system. While their impact on student
                                   achievement is still being debated, charter schools are a form of
                                   educational reform that has enjoyed bipartisan support from Congress and
                                   other policy makers. Since 1994, the federal government has provided
                                   about $1 billion in grants to charter schools in addition to financial
                                   support provided by state and local governments.

                                   Currently about 1.5 percent of students nationwide, and 15 percent in the
                                   District of Columbia, are attending charter schools. Charter schools are
                                   public schools that are exempt from certain state and local regulations in
                                   exchange for accountability for improving student achievement. Like
                                   traditional public schools, charter schools receive funding from state and
                                   local governments on a per-pupil basis; however, unlike traditional public
                                   schools, charter schools are responsible for a wide range of functions that
                                   are usually administered by the local school district, such as managing
                                   faculty payroll and securing and maintaining school facilities. Other
                                   resources available to charter schools depend on specific state laws, local



                                   Page 1                                            GAO-03-899 Charter Schools
school district decisions, and the availability of private or nonprofit
assistance.

The opening of a charter school can present challenges to the founders.
While the challenges are similar, the extent of these challenges varies from
state to state, depending on state laws and procedures and the resources
available to assist in the start-up process. This report provides information
on (1) challenges faced by charter school start-ups across the nation and
resources available in various states to address these challenges and
(2) how the District of Columbia compares in terms of challenges and
resources.1

To obtain information about charter school start-ups across the country,
we analyzed federal and state charter school laws. We conducted
interviews with Department of Education (Education) officials, charter
school policy experts, and charter school advocates in various states,
including a charter school founder. We also reviewed a variety of national
studies and surveys of charter schools, including those done by the
Education Commission of the States and for the Department of Education.
To obtain information about charter schools in the District of Columbia,
we analyzed District of Columbia and federal laws affecting charter
schools in the District. We interviewed officials from the Mayor’s office
and the City Council, the District of Columbia Public Schools, and both
charter school authorizing bodies—the District of Columbia Public
Charter School Board and the District of Columbia Board of Education—
from whom we obtained much of our information about the facility status
of currently operating charter schools. We conducted a discussion group
consisting of District representatives from charter school advocacy
groups, researchers, charter school founders, and other individuals
knowledgeable of charter school issues in the District of Columbia. We
also visited 1 of the 39 charter school campuses operating in the District in
the 2002-2003 school year. See appendix I for a more complete description
of our scope and methodology. We conducted our work between February
and September 2003 in accordance with generally accepted government
auditing standards.




1
 The Consolidated Appropriations Resolution for Fiscal Year 2003, Division C, Title III,
§ 140, Pub. L. No. 108-7 (2003), required GAO to report on the national effort to establish
adequate charter school facilities, including a comparison to the efforts in the District of
Columbia.




Page 2                                                          GAO-03-899 Charter Schools
                   Although various forms of assistance are available to help with the start-up
Results in Brief   process, new charter schools across the country share common difficulties
                   securing adequate facilities, obtaining start-up funding, and, to a lesser
                   extent, acquiring the expertise necessary to run a charter school.
                   According to studies conducted for Education and national charter school
                   experts, finding and financing adequate facilities is one of the two most
                   challenging aspects of starting a new charter school. To address this
                   problem, the federal Public Charter Schools Program provides a limited
                   number of grants to improve the creditworthiness of charter schools and
                   help offset the cost of acquiring, constructing, or renovating facilities.
                   Additionally, 27 of the 40 states with charter school laws and the District
                   of Columbia have provisions in law providing for facilities-related
                   assistance to charter schools. The extent of this assistance varies
                   considerably; however, ranging from allowing charter schools to use
                   vacant public buildings if they are available to providing funding and low-
                   interest loans to cover some building expenses. A second major challenge
                   cited by studies conducted for Education is obtaining sufficient start-up
                   funding. New charter schools incur numerous expenses during the school
                   design and planning phases, such as purchasing supplies and hiring
                   faculty, before many are eligible to receive most forms of public funding.
                   One federal resource available to mitigate this problem is the federal
                   Public Charter Schools Program, which provides annual grants that can be
                   used for charter school planning, design, and implementation.
                   Additionally, approximately one-quarter of states with charter school laws
                   provide charter school start-up grants or low-interest loans. Finally,
                   charter school advocates cite the wide range of expertise needed,
                   including accounting, budgeting, education law, and general school
                   management as a significant challenge to opening a new school. Few
                   federal government resources exist to help charter school founders
                   acquire issue area expertise; however, 28 states and Puerto Rico provide
                   charter schools with some technical assistance according to the Education
                   Commission of the States. Nonprofit resource centers and other
                   nongovernment sources have been established in some states to provide
                   new charter schools with various forms of technical assistance to help
                   bridge knowledge gaps.

                   Charter school founders and others knowledgeable about charter schools
                   in the District of Columbia report these same three challenges, and except
                   for receiving greater assistance with funding facilities, have generally
                   similar resources. Charter school founders in the District report
                   difficulties locating appropriate buildings and paying for them, citing real
                   estate costs and the age and poor condition of available buildings as
                   contributing factors. However, in contrast to charter schools in most


                   Page 3                                             GAO-03-899 Charter Schools
             states, the D.C. law gives charter schools a limited preference to access
             surplus public school buildings and a facilities allowance. Like charter
             schools in other states, new charter school founders in the District
             reported a variety of expenses early in the design and planning stages and
             thus cited obtaining start-up funding as a significant challenge to starting a
             new charter school. To help with this problem, the District provides some
             early funding prior to schools’ opening. However, to obtain this funding
             charter schools must meet eligibility requirements, such as acquiring a
             facility. Finally, new charter school founders in the District also reported
             that they need expertise in a wide range of areas to successfully open and
             operate a charter school. Similar to charter schools in other parts of the
             country, District charter school founders receive some advice and
             technical assistance during the chartering process; however, unlike
             charter schools in some other states, District charter schools have few
             readily available resources to address this challenge. According to some
             local charter school founders, the nonprofit D.C. Charter School Resource
             Center’s recent closing has limited the amount of assistance available to
             help new charter schools founders acquire the necessary expertise.


             Since the opening of the first public charter school in Minnesota in
Background   1992, approximately 2,700 public charter schools have opened across the
             country. As shown in figure 1, 40 states, the District of Columbia, and
             Puerto Rico have enacted charter school laws, although, as of July
             2003, no charter schools had opened in 4 of these states—Iowa, Maryland,
             New Hampshire, and Tennessee. In the 2002-2003 school year, public
             charter schools enrolled nearly 700,000 students or approximately
             1.5 percent of America’s 48 million public school students in pre-
             kindergarten through 12th grade. Students enrolled in charter schools are
             more likely to be members of minority groups than students enrolled in
             traditional public schools according to a 4-year study of charter schools
             conducted for Education.2




             2
              RPP International, Office of Educational Research and Improvement, U.S. Department of
             Education, The State of Charter Schools 2000: Fourth Year Report (Washington, D.C.:
             Jan. 2000).




             Page 4                                                     GAO-03-899 Charter Schools
Figure 1: Status of Charter School Laws by Jurisdiction as of July 2003




Charter schools are public schools established under contracts that grant
them greater levels of autonomy from school regulations in exchange for
agreeing to certain student performance goals. Charter schools are often
exempt from certain state and school district education laws and in some
states may receive waivers for exemptions from other laws; however,
charter schools must comply with select regulations, including those
pertaining to special education, civil rights, and health and safety
conditions. While charter schools are free from many educational
regulations, they are accountable for their educational and budgetary
performance, including the assessment requirements of the No Child Left



Page 5                                                  GAO-03-899 Charter Schools
Behind Act.3 Charter schools may have their charters revoked by the
authorizing body if they fail to perform adequately.

Charters to operate a school are awarded by various entities, depending
on the state’s laws, but may include local school districts, state education
agencies, institutions of higher education, municipal governments, or
special chartering boards. The majority of charter school authorizing
bodies have formal procedures to regulate the charter application process,
including formal application deadlines and public hearings. The ease of the
authorizing process for charter schools varies from state to state,
depending on the specifications in state law governing charters and local
support or resistance to charter schools. For instance, some states limit
the number of charters that may be awarded either in total or by year.
Also, some state laws specify multiple authorizers, while others restrict
approval authority to a single entity, for example, a local school board, and
provide for appeal when a charter is denied.

In addition to awarding charters, authorizing bodies are responsible for
monitoring school performance in areas such as student performance,
compliance with regulations, financial record keeping, and special
education services. If charter schools do not meet expected performance
measures, authorizing bodies may revoke a school’s charter or decide not
to renew the school’s charter when it expires. Since 1992, more than
100 charter schools have been closed, either through charter revocation or
nonrenewal. According to a recent study published by the Thomas B.
Fordham Institute, the majority of these closings have been due to
financial mismanagement, while the rest have been closed due to
unsatisfactory student achievement or other performance failures.4

A wide range of individuals or groups, including parents, educators,
nonprofit organizations, and universities, may apply for a school charter as
nonprofit organizations. Similar to other nonprofit organizations, charter
schools are governed by a board of trustees, which is selected by the


3
 P. L. 107-110 (2002). The No Child Left Behind Act reauthorized the Elementary and
Secondary Education Act of 1965 and instituted a number of new features that hold schools
accountable for student achievement.
4
 Thomas B. Fordham Institute, Charter School Authorizing: Are States Making the Grade?
(Washington, D.C.: June 2003). The Thomas B. Fordham Institute is a nonprofit
organization associated with the Thomas B. Fordham Foundation, which supports
research, publications, and action projects about elementary and secondary education
reform.




Page 6                                                     GAO-03-899 Charter Schools
school founders. Although requirements for charter school board
membership vary across states, charter school boards are responsible for
school oversight. Specifically, charter school boards oversee legal
compliance, contracts with external parties, financial management and
policies, and facilities and equipment acquisition and maintenance.
Charter school board members are also responsible for identifying real
and potential risks facing the charter school, such as financial and school
liability risks and emergency preparedness, and taking steps to reduce or
eliminate these risks.

Charter schools may be established in one of two ways. First, an existing
school may be converted to a public charter school. Traditional public
schools may convert to charter schools to focus on a specific segment of
the student body, such as at-risk students, to apply a new curriculum or
educational approach, or to operate in a less regulatory environment.
Charter schools may also be established when a new school is created and
awarded a charter. The majority of charter schools are newly created
schools rather than conversion schools. According to a study done for
Education, in the 2000-2001 school year, 76 percent of new charter schools
were newly created.5 Charter schools that are converted from existing
schools generally remain in their buildings, while newly created charter
schools must acquire facilities. These newly created charter schools may
operate in a variety of facilities, including surplus school buildings, shared
space with other groups, such as the YMCA or other charter schools, and
converted commercial buildings, including office and retail space. In
September 2000, we reported that new charter schools often experience
difficulty financing the purchase or lease of their facilities.6

With approximately 15 percent of its public school students attending
charter schools, the District of Columbia has one of the highest
concentrations of public students in charter schools in the country. Like
most charter schools, District charter schools have lower average total
enrollments and student to teacher ratios than traditional public schools.
Additionally, District charter schools, like their national counterparts,
serve a higher percentage of minority and low-income students than



5
  SRI International, Policies and Program Studies Service, U.S. Department of Education,
A Decade of Public Charter Schools, Evaluation of the Public Charter Schools Program:
2000-2001 Evaluation (Washington, D.C.: Nov. 2002).
6
 See U.S. General Accounting Office, Charter Schools: Limited Access to Facility
Financing, GAO/HEHS-00-163 (Washington, D.C.: Sept. 12, 2000).




Page 7                                                      GAO-03-899 Charter Schools
traditional public schools. Charter school applicants in the District may
apply to either of two authorizing entities, the District of Columbia Public
Charter School Board or the District of Columbia Board of Education. As
of the 2002-2003 school year, the D.C. Public Charter School Board has
authorized charters for 23 schools, 1 of which closed voluntarily. The D.C.
Board of Education has authorized charters for 21 schools, 6 of which
closed for performance and management reasons. Three new charter
schools, 1 authorized by the Board of Education and 2 by the D.C. Public
Charter School Board, are expected to open in the 2003-2004 school year.

Table 1: D.C. Chartering Authorities

                                                 D.C. Board of Education    D.C. Public Charter School
    D.C. chartering authorities                         Chartering Office                        Board
    Fiscal year 2003 chartering
    authority budget                                            $300,000                      $589,000
    Number of chartering authority
    board members                                                      9                             5
    Number of charter schools
    authorizeda                                                       21                            23
    Number of charter schools
    closed                                                             6                             1
    Number of charter schools
    operating during the 2002-
                                                                                                         b
    2003 school year                                                  14                            21
    Number of new charter
    schools expected to open in
    the 2003-2004 school year                                          1                             2
    Number of enrolled students
    as of 2002-2003 school year                                    2,949                         8,723
    Average school size                                      211 students                  411 students
Source: GAO’s analysis of D.C. public school data.
a
 The number of charter schools authorized reflects the number of charters awarded. Each charter is
awarded to one school that may operate on one campus or on a number of campuses. For example,
Friendship-Edison was awarded 1 charter, but operates 4 campuses, each with its own building.
b
One of the 21 Public Charter School Board charter schools closed in June of 2003.




Page 8                                                                      GAO-03-899 Charter Schools
                         New charter school founders across the country share common
Facilities, Funding,     challenges: securing adequate facilities, obtaining start-up funding, and,
and, to a Lesser         to a lesser extent, acquiring the expertise necessary to run a charter
                         school, although various forms of assistance are available to help with the
Extent, Expertise        start-up process. Securing adequate facilities is one of the greatest
Pose Challenges for      challenges facing new charter schools, according to research articles and
                         national charter school experts. The federal government and 27 states
New Charter Schools,     provide limited assistance to address this problem. Charter schools also
but Some Assistance      report facing difficulties obtaining funding during the application and early
Is Available             implementation periods, although the federal government and a small
                         number of states provide funding for charter school start-up grants. The
                         wide array of knowledge and skills necessary to open and operate a new
                         charter school, such as business, law, management, and education
                         expertise, also presents a challenge, according to charter school founders.
                         Few federal programs exist that specifically address this challenge;
                         however, some assistance is available from state, local, and nonprofit
                         sources.

Securing Adequate        According to research articles and national charter school experts,
Facilities Is a Major    securing adequate facilities is one of the most challenging aspects of
Challenge; Limited       starting a new charter school. Unlike traditional public schools that rely
                         on school districts for support, charter schools are responsible for
Assistance Provided in   locating, securing, and renovating their school buildings. Locating an
Most States              appropriate facility can be difficult for new charter schools. Because new
                         charter schools often open with few classrooms or grades and a limited
                         number of enrolled students, charter schools frequently expand
                         significantly, sometimes by several grades, during their first few years of
                         operation. As a result, new charter schools either look for a smaller
                         building that will meet their current size needs or a larger one that will
                         accommodate future growth. Both options can pose problems for new
                         charter schools, as opening in a smaller building requires an ongoing
                         search for a larger facility and the expense of a future move, while
                         selecting a larger facility, if one can be found, may not be financially
                         feasible in a school’s early years. Additionally, schools have facilities
                         requirements—they need facilities that will enable them to subdivide
                         space into classrooms and also contain common space to serve as
                         gymnasiums, cafeterias, or auditoriums. Transforming commercial space
                         into educational facilities with classrooms and common rooms can be
                         expensive. Some charter schools are able to acquire existing school
                         buildings to use for facilities, which can reduce transformation costs;
                         however, the number of excess school buildings available is generally
                         limited.



                         Page 9                                             GAO-03-899 Charter Schools
In addition to encountering difficulties locating appropriate facilities,
charter schools have difficulty financing the building purchase or lease
and renovations. Traditional public schools generally rely on school
districts for facility financing, which is often provided either by raising
taxes or issuing municipal bonds.7 Charter schools, however, are generally
not part of a local school district and rarely have the authority to raise
taxes or issue tax-exempt bonds independently. Charter schools’ access to
other facility financing options, such as private lending, is also limited.
Charter schools are often considered credit risks because they may have
limited credit histories, lack significant cash flows, and have short-term
charters that can be revoked. As a result, private loans are not easily
accessible to charter schools for facility financing. Because municipal
bonds and private loans may be inaccessible to charter schools, many
charter schools finance their facilities through per-pupil allocations
provided by the state or district. These per-pupil allotments are provided
to all public schools, including charter schools, to cover operating
expenses, such as teachers’ salaries and the purchase of books and
supplies.8 Additionally, some charter schools finance their facilities
through private donations.

Several states provide financial assistance to charter schools that is
specifically designated for facilities. Eleven states and the District of
Columbia provide direct funding to charter schools for facilities, either
through grant programs to help cover building acquisition costs or lease-
aid programs to help cover building maintenance and facility lease or
mortgage payments. Of these 11 states, 5 — Arizona, California, Florida,
Massachusetts, and Minnesota — and the District of Columbia have
provided charter schools with a designated annual revenue source to
offset facilities expenses. Approximately half of all charter schools operate
in these 5 states and D.C., where charter schools receive a supplemental
per-pupil allotment that is designated to cover facilities expenses. For
example, charter schools in low-income areas in California may receive up
to $750 per student to cover lease expenses, while charter schools in
Florida may receive up to approximately $1,300 per student to offset




7
 Municipal bonds are tax-exempt bonds issued by a local government entity, such as a
school district, city, or county.
8
 Per-pupil allotments provided to charter schools may not be as high as those provided
to traditional public schools in the same districts.




Page 10                                                      GAO-03-899 Charter Schools
facilities costs.9 Additionally, at least 5 states — Colorado, Georgia,
Missouri, North Carolina, and Texas — and the District of Columbia have
enacted legislation that would enable the state bonding authorities to issue
tax-exempt bonds on behalf of charter schools.

In addition to providing charter schools with funding for facilities, states
may provide charter schools with other forms of facilities assistance.
Eighteen states and the District of Columbia have enacted laws that allow
charter schools access to vacant public buildings. The extent to which
these laws enable charter schools to gain access to public buildings varies
considerably both in terms of how proactive the states are in providing
access and in terms of the cost of this access to charter schools. Some
state laws, such as those in Alaska, simply make it legal for charter
schools to operate in excess public space if it is available, while other state
laws provide charter schools with preferential access to available space or
mandate procedures for informing charter schools when public space
becomes available. For instance, Arizona law requires that an annual list of
appropriate public buildings be made available to charter schools.
Additionally, the amount charter schools must pay for this space varies. In
Virginia, charter schools do not have to pay rent for available school
buildings, while in Louisiana, charter schools must pay fair market value
to use excess public facilities. Table 2 summarizes the various types of
facility assistance provided. Appendix II provides greater detail about
facilities assistance provisions in state laws.

Table 2: Major Types of Facilities Assistance Offered by States

    Type of facilities assistance                                            Number of states
    Funding assistance for facilities                                               11 and D.C.
    Issue tax-exempt bonds on behalf of charter schools                              5 and D.C.
    Access to vacant public buildings                                               18 and D.C.
Source: GAO analysis of state charter school laws.



Some federal support also exists to help public charter schools acquire
facilities.10 Under the Public Charter Schools Program, the federal



9
 Education Commission of the States, StateNotes, Charter Schools: Charter School Finance
(Denver, CO: Apr. 2003).
10
 Similarly, little federal funding is provided to support facilities for traditional public
schools.




Page 11                                                          GAO-03-899 Charter Schools
government provides a limited number of grants to public or private
organizations for the development of facilities-related “credit
enhancement initiatives.” Organizations use credit enhancement grants to
leverage additional capital for charter schools for the acquisition,
construction, or renovation of facilities. Charter schools do not receive
this grant money directly; instead the grant money is provided to
organizations that use the funding for a range of activities to help charter
schools improve their credit. These activities include insuring or
facilitating the issuance of bonds, subsidizing interest payments, creating
a facilities loan pool, or serving as a loan guarantor. Grant recipients
generally provide support to charter schools in specific states or regions
or to specific types of charter schools. For example, one 2001 grant
recipient, the Raza Development Fund, a nonprofit Hispanic advocacy
organization, is using its grant to increase 30 Hispanic charter schools’
access to direct loans. The credit enhancement program has received
funding twice, in fiscal years 2001 and 2003.11 Under the Public Charter
Schools Program, the federal government is also authorized to provide
grants to states to establish or enhance per-pupil facilities aid programs;
however, as of July 2003, this program has never received funding. Like
traditional public schools, charter schools may access federally
administered Qualified Zone Academy Bonds (QZAB), which provide
financial assistance for public school renovations. To qualify for these
bonds, public schools must be located in an empowerment zone or
enterprise community12 or have at least 35 percent of their students eligible
for free or reduced-price school lunch. In addition, federal law permits
local school districts, including charter schools, to enter into public-
private partnerships that allow private entities to take advantage of tax-
exempt bonds—often referred to as private activity bonds—for school
construction and renovation. However, as we reported in a 2000 study of
charter school facilities financing, the credit worthiness of most new




11
  In both fiscal years 2001 and 2003, the program received $25 million. From the fiscal year
2001 funding, Education awarded five grants, ranging between $3 million and $6.4 million.
The five grant recipients will provide credit enhancement programs to charter schools in at
least 10 states and the District of Columbia. Education expects to award grants of similar
values for the fiscal year 2003 funding.
12
 Empowerment zones and enterprise communities are communities with high levels of
poverty that participate in the U.S. Department of Agriculture’s community empowerment
program, which provides tax benefits to help communities meet long-term strategic goals
regarding private investment and job creation.



Page 12                                                       GAO-03-899 Charter Schools
                              charter schools and concerns about their ability to repay remain a concern
                              for bond raters and buyers.13


Obtaining Sufficient Start-   According to national studies of new charter schools, obtaining sufficient
Up Funding Is also a Major    start-up funding is one of the two greatest challenges facing charter
Challenge; Assistance         schools during the planning and early implementations stages. Charter
                              schools incur many start-up expenses during the planning and early
Provided Primarily by         implementation stages, such as hiring lawyers and business consultants to
Federal Programs              review charter plans and applications, buying curriculum programs and
                              instructional materials, purchasing school furniture and supplies, hiring
                              key staff, purchasing insurance, and placing down payments on facilities.
                              Unlike traditional public schools, most charter schools do not receive
                              financial support from local school districts during the early planning
                              stages, and many are not eligible for local funds until the school opens.
                              While the timetable for disbursing funds varies by location, charter
                              schools can incur a variety of expenses—for example, attorney and
                              consultant fees—before they are eligible to receive most sources of public
                              funding. To help meet these early expenses, many charter schools rely on
                              funds raised through private sources, such as individual fundraising or
                              awards from private foundations.

                              Charter schools become eligible for financial assistance under the Public
                              Charter Schools Program after the application has been submitted and
                              certain other requirements met. Through this program, charter schools can
                              receive funding to help defray planning, design, and implementation
                              expenses. Grants are awarded under this program by Education to state
                              departments of education to be distributed directly to charter schools for a
                              period of not more than 3 years, of which no more than 18 months may be
                              used for planning and program design and no more than 24 months may be
                              used for implementation.14 Education recommends that states provide
                              charter schools with $450,000 over the 3-year period to be distributed in




                              13
                               See U.S. General Accounting Office, Charter Schools: Limited Access to Facility
                              Financing, GAO/HEHS-00-163, (Washington, D.C.: Sept. 12, 2000), 20.
                              14
                               The state departments of education in Arizona, New Hampshire, and Wyoming do not
                              participate in the Public Charter Schools Program. Charter schools in states not
                              participating may apply directly to the U.S. Department of Education for 3-year grants
                              under this program.




                              Page 13                                                     GAO-03-899 Charter Schools
$150,000 annual allotments.15 Charter schools that are still in the early
planning stages and have not yet submitted an application may apply for a
waiver to the program’s eligibility requirements to receive a “pre-planning”
subgrant. Education recommends that states awarding pre-planning
subgrants provide sums of $10,000 to $20,000 and requires that pre-
planning grants count towards a charter school’s 3-year subgrant time
limit. According to an evaluation of the Public Charter Schools Program
conducted for Education in 2001,16 almost two-thirds of charter schools are
recipients of Public Charter School subgrants. The data also indicated that
of those schools not receiving subgrants through the Public Charter
Schools Program, about half did not apply. According to Education
officials, charter schools that are turned down for subgrants through this
program may have applied for the funding after they had completed their
early planning and implementation stages, which would make them
ineligible.

An analysis of data collected by the Education Commission of the States
showed that in 2003 approximately one-fourth of states with charter
school laws had established programs to assist new charter schools with
start-up costs through grants or loans. Nine states, Alaska, California,
Georgia, Illinois, Louisiana, Minnesota, New Mexico, Oklahoma, and
Pennsylvania, and the District of Columbia made start-up loans17 or grants
available to new charter schools. The size and timing of these grants and
loans varied from state to state. In Georgia, for example, new charter
school founders were eligible for $5,000 grants during the school planning
phase, while new charter school founders in Pennsylvania were eligible for
$25,000 grants to cover expenses during the charter application process.
Additionally, Louisiana had established a $3 million loan fund to provide
charter schools with money during the start-up period, and charter schools
in California are eligible to receive loans for as much as $250,000, which
could be repaid over a 5-year period. Although these grant and loan


15
  In addition to providing subgrants to charter schools, a state may dedicate up to 10
percent of its Public Charter Schools grant to establish a charter school revolving loan
fund. Through this fund, participating states provide new charter schools with loans to
offset initial operating expenses. The terms of these loans are determined by state
education agencies.
16
   SRI International, Policies and Program Studies Service, U.S. Department of Education,
A Decade of Public Charter Schools, Evaluation of the Public Charter Schools Program:
2000-2001 Evaluation (Washington, D.C.: Nov. 2002).
17
 We were unable to determine if these start-up loans were funded through the Public
Charter Schools Revolving Loan Program or state funds.




Page 14                                                       GAO-03-899 Charter Schools
                             programs had been authorized, funding for these programs is uncertain.
                             For example, Minnesota will not fund its charter school start-up grant
                             program for fiscal year 2004 for budgetary reasons. Additionally,
                             according to the Education Commission of the States data, Nevada, which
                             has authorized a loan program, has never funded it.


Lack of Specific Expertise   The wide array of knowledge and skills necessary to open and operate a
also Poses Difficulties;     charter school often presents a challenge for charter school founders. For
Some Assistance Is           instance, according to charter school advocates with whom we spoke
                             many charter school founders may have extensive educational experience
Available from Local or      but limited knowledge of legal and business issues. In order for a charter
Nonprofit Sources            school to be successful, charter school founders must coordinate a wide
                             range of activities: planning the school’s educational system and
                             curriculum, hiring leadership and teaching staff, assembling a board of
                             directors, ensuring the school’s compliance with all laws and regulations,
                             locating and acquiring school facilities, creating the school’s budget and
                             accounting systems, and managing the day-to-day operations of the school.
                             As figure 2 shows, to successfully achieve these tasks, charter school
                             founders must have expertise in a variety of areas, including educational
                             systems, legal issues, and general business practices; however, few
                             individuals are well versed in all of these subjects. National surveys of
                             charter school founders cite their limited knowledge of certain areas as a
                             challenge to opening new charter schools.




                             Page 15                                          GAO-03-899 Charter Schools
Figure 2: Expertise Needed to Open a Charter School



                                                   Areas of Expertise

                          Curriculum                               Legal issues
                          and instruction                          and education law

                          Governance                               Community
                          and management                           relations
                                                                   and marketing
                          Student assessment

                          Finance and fundraising                  Real estate




Sources: Art Explosion (image); www.uscharterschools.org (text).



The federal government provides limited assistance to charter school
founders to help them acquire expertise. Education sponsors a Web site,
www.uscharterschools.org, that provides an overview of state charter
laws, lists state charter school advocacy groups, and promotes exchanges
between charter school founders. In addition, 5 percent of the Public
Charter Schools Program grant money may be used by the states to cover
administrative expenses, which can include funding for technical
assistance programs. For example, the Florida Department of Education
uses a small percentage of its approximately $26 million Public Charter
Schools grant to fund a resource center that provides new charter schools
with technical assistance throughout the chartering process. The Florida
program provides charter schools with assistance in management,
governance, and budgeting and fosters mentoring relationships between
new and established charter schools. Under the Public Charter Schools



Page 16                                                            GAO-03-899 Charter Schools
Program, some states provide subgrants to high-performing charter
schools that have been open for at least 3 consecutive years to share best
practices with new charter school founders.

Technical assistance programs that help charter school founders learn
more about how to open and operate a school are generally administered
by state or local governments. According to the Education Commission of
the States, 28 states and Puerto Rico provide some technical assistance to
charter schools through their state departments of education or local
school boards. The extent and type of this assistance varies. Some states
conduct periodic workshops, others provide targeted assistance to
individual charter schools upon request, and some states provide both
types of assistance. For example, the Pennsylvania Department of
Education conducts monthly regional workshops and provides assistance
to individual charter schools upon request. Additionally, states or local
school boards may provide charter school founders with assistance during
the charter application period or after the charter school has opened.
Types of assistance that are designed to help charter school founders
operate their schools include staff development and management, use of
student data, technology training, and curriculum development.

Charter school founders also rely on nonprofit organizations to help them
gain expertise. Charter school resource centers, which are primarily
nonprofit organizations, assist charter schools in specific states or regions
in the opening and operation of the school. According to data from a
national charter school advocacy organization, these resource centers
operate in approximately half of the states with charter school laws. The
resource centers address founders’ lack of expertise by providing new
charter schools with a wide range of services, such as budgeting
assistance, board development, and classroom management. The type of
services provided by these resource centers varies significantly. For
example, a charter school resource center in Wisconsin helps charter
schools with board development, networking, business management, and
legal compliance. The Massachusetts Charter School Resource Center
provides a fellowship to a small number of charter school founders.
Charter school founders selected to participate in this competitive
program are paid $50,000 for 1 year, as they learn how to effectively found
and operate a charter school through a training and internship program.
According to resource center representatives with whom we spoke,
charter school resource centers also may help potential founders make
decisions about moving forward with the application and chartering
process. By helping potential charter school founders better understand
what is involved with founding a new charter school, resource centers can


Page 17                                             GAO-03-899 Charter Schools
                       also offer potential founders advice as they decide whether or not they
                       should attempt to open a charter school. The funding and operation of
                       charter school resource centers also varies significantly. Charter school
                       resource centers may be funded by private donations, supported by fee-
                       for-service arrangements, sponsored by university programs, or financed
                       by state or local governments.

                       In addition to more formal resources, charter school founders rely on
                       other charter school founders and their own boards of directors to help
                       them gain needed expertise. Charter school founders often rely upon other
                       charter school founders who had opened schools in the same state or
                       region for expertise and advise. One charter school founder we
                       interviewed said that the insights and expertise provided by people who
                       had also gone through the local chartering process enabled him to more
                       fully understand what was required to charter and open a school.
                       Additionally, charter school founders seek expertise and assistance from
                       their boards of directors. As nonprofit organizations, all charter schools
                       must have a board of directors responsible for school governance issues.
                       Charter school boards often include members with varying areas of
                       expertise, such as lawyers, accountants, management consultants, and
                       community organizers. Founders, therefore, have an additional resource
                       available to assist them with issues that may be outside of their own area
                       of expertise.


                       Charter school founders in the District of Columbia, like charter schools
District of Columbia   nationwide, face challenges with facilities, start-up funding, and expertise,
Charter Schools Face   and except for receiving greater assistance with funding facilities, have
                       generally similar resources. Although D.C. charter schools receive greater
Similar Challenges,    facilities assistance, charter school founders report that real estate costs
but More Facilities    and the current unavailability of public buildings make securing
                       appropriate buildings difficult. New charter schools in the District also
Assistance Is          report incurring substantial costs early in the design and planning stages
Available              and cite obtaining start-up funding as a significant challenge to starting a
                       new charter school. However, in addition to design and planning funds
                       available through the Public Charter Schools Program, new charter
                       schools in the District can receive partial access to local funds prior to the
                       opening of the school. Finally, new charter school founders in the District
                       reported that developing the expertise needed to successfully open and
                       operate a charter school presents a problem that has been exacerbated by
                       the recent closing of the nonprofit organization, the D.C. Charter School
                       Resource Center.



                       Page 18                                             GAO-03-899 Charter Schools
District Charter Schools    According to D.C. charter school founders and other knowledgeable
Have Additional Resources   sources with whom we spoke, securing appropriate facilities is the
to Address Facilities       greatest challenge to opening a charter school in the District. Charter
                            school officials and charter school authorizing officials told us that in
Problem, but Real Estate    recent years the expense of real estate in the District of Columbia has
Costs in the District       limited the options available to new charter schools. National reports on
Continue to Limit Options   commercial real estate markets show that commercial property in the
                            District is among the most expensive in the nation and that there is
                            continued strong demand for commercial property. Additionally, D.C.
                            charter school founders reported that available buildings tend to be older,
                            in need of extensive and costly renovations, or not fit to be used as
                            schools. For example, one charter school organization that purchased an
                            unoccupied District of Columbia Public Schools (DCPS) building
                            estimated that the cost of renovating the building would be over
                            $5 million.

                            To help alleviate some of this strain, the D.C. charter school law provides
                            charter schools with a limited preference in acquiring surplus DCPS
                            buildings.18 Specifically, the law provides charter schools with a preference
                            to purchase or lease DCPS surplus buildings at below market rates,
                            provided that doing so will not result in a significant loss of revenue that
                            might be obtained from other dispositions or use of the property. In March
                            2000, DCPS conducted an inventory of all its schools and designated
                            38 surplus school buildings. As of June 2003, charter schools are using
                            14 of these buildings: 11 set aside for their exclusive use by order of the
                            mayor in October 2000 and 3 others.19 According to District officials, of
                            these 14 buildings, charter school groups have purchased, or are in the
                            process of purchasing, about half at a 25 percent discount from fair market
                            value.20 The other half are being leased to charter schools at discounted
                            rates—about 50 percent of fair market value. As of June 2003, DCPS had
                            designated no additional surplus buildings. However, as a part of its
                            Facilities Master Plan, a comprehensive plan for renovating or



                            18
                             Surplus buildings are those not needed for educational purposes by DCPS. They are
                            referred to the Mayor’s office for final disposition.
                            19
                             According to DCPS officials, some of these buildings were occupied by charter schools
                            prior to the Mayor’s order and some charter schools have negotiated long-term leases in
                            DCPS school buildings that were not in the order.
                            20
                             According to District officials, fair market value is based on the building’s use as a school.
                            Charter schools that purchased buildings valued at over $1,000,000 received a 15-percent
                            discount.




                            Page 19                                                         GAO-03-899 Charter Schools
modernizing its schools, DCPS is currently finalizing a facilities
assessment. This assessment, which DCPS expects to complete by
September 2003, could potentially identify additional surplus school
buildings.21 If such buildings were identified, a list of them would be sent
to the mayor’s office, which would determine how to dispose of them.

In addition to these preferences, DCPS designated one of its public school
buildings as a “hub school,” where charter schools can lease space for up
to 3 years. Since 1998, the hub school has housed a total of 6 charter
schools, 3 charter schools at a time, with each charter school occupying its
own floor. All the schools in the building share common space, such as the
auditorium, gymnasium, and outdoor field space. The two authorizing
boards notify charter schools when space in the hub school becomes
available, and charter schools can submit an application to the Mayor’s
Office of Property Management for consideration.

In addition to the hub school, DCPS occasionally provides charter schools
with other temporary space. It provides such space when a DCPS school is
not using part of the building it occupies or when DCPS has a vacant
building that it has not designated as surplus. In such cases, DCPS allows
charter schools to lease the space on a year-to-year basis. According to an
official in the DCPS realty office, 2 charter schools rented excess space in
an occupied DCPS school building under this type of agreement in school
year 2002-2003. Currently, DCPS has no formal process for making
temporary space available to charter schools. In providing charter schools
with temporary space, the District and DCPS meet some needs particular
to charter schools. Specifically, the hub school and the DCPS temporary
space allow charter schools, which are often initially smaller than
traditional schools, to benefit from the economies of scale realized by
sharing space, such as cafeterias and gymnasiums, with another school.
Temporary space also allows charter schools to focus on the educational
component of their school first rather than focusing on finding a
permanent facility.

Recent legislation increased the potential for additional shared space
arrangements. This legislation requires DCPS to present a plan to the City
Council for the co-location of charter and other public schools where



21
 DCPS officials told us that not all vacant buildings are considered surplus, as some are
needed to temporarily house students displaced from buildings undergoing renovations
and some are reserved for future use.




Page 20                                                       GAO-03-899 Charter Schools
underutilized DCPS space exists.22 As of July 2003, the co-location plan had
not been completed, but DCPS was finalizing a use and capacity study of
all its school buildings, which should identify any underutilized space that
currently exists.

In addition to the District, two nonprofit organizations have provided D.C.
charter schools with assistance in sharing facilities. The Appletree Charter
School Incubator—a charter school start-up facility operated by a
nonprofit organization—provided temporary space to 2 District charter
schools between 1998 and 2002. The Appletree Institute rented space in a
federally leased building at a discount for 4 years and then provided space
to District charter schools at a discounted rate. The Incubator closed when
the lease expired in 2002 and as of June 2003, both schools were leasing
space in other buildings. In 2003, another nonprofit group, the Charter
Schools Development Corporation (CSDC),23 purchased a surplus DCPS
building, 24 which it is renovating and will use to permanently house
2 charter schools, according to a CSDC official.

Besides providing some access to facilities, the District of Columbia also
provides financial assistance to help charter schools acquire facilities
through a variety of mechanisms. One of these is a per-pupil facilities
allotment. In addition to a per-pupil allotment that covers operating
expenses, District charter schools receive a per-pupil allotment for
facilities expenses. In the 2002-2003 school year, charter schools in the
District received a facilities allotment of approximately $1,600 per pupil
for traditional students and about $3,600 per pupil for students at public
charter boarding schools.25




22
     See D.C. Code 38-1851.
23
  CSDC is a nonprofit organization that has provided financing assistance, primarily
through a Credit Enhancement Program, to charter schools across the country for 6 years.
24
  CSDC purchased the Kingsman School building in 2003. The Kingsman school was
included as one of the 38 buildings deemed as a surplus building by DCPS in 2000.
25
  The $1,600 per-pupil facilities allotment is in addition to the approximately $6,500 per
pupil given to charter schools for their operating expenses. The $6,500 figure is a base
amount and is adjusted upwards according to grade level, special education status, and
language proficiency.




Page 21                                                        GAO-03-899 Charter Schools
Another way the District provides financial support for facilities to charter
schools is through its Credit Enhancement Revolving Fund.26 Under the
authority of the D.C. Department of Banking and Financial Institutions,
this program provides loan guarantees and collateral to help finance the
purchase or new construction of charter school facilities. The Credit
Enhancement Revolving Fund was first appropriated $5 million in fiscal
year 2000. It was not until 2003 that it received its second appropriation
totaling $8 million. To date, the Credit Enhancement Revolving Fund has
been able to enhance 6 charter school loans.

In addition to the Credit Enhancement Revolving Fund, in fiscal year
2003, the District allocated $5 million to a new direct-loan program. Under
this program, the District can provide low-interest loans directly to charter
schools, rather than through private lenders. Charter schools can use the
proceeds from these loans as collateral for a larger loan on a purchase,
new construction, or renovation of a building. This program will
potentially benefit new charter schools the most because private lenders
often do not lend to charter schools that have not begun operating. District
officials told us that as of August 2003, the District has obligated funds
from the direct loan program to 7 charter schools for varying amounts, but
the loan process has not yet been completed.

The District also provides financial assistance to help charter schools
acquire facilities by allowing charter schools to raise revenues through
tax-exempt bonds. The District will issue bonds on behalf of charter
schools if the charter school meets certain eligibility requirements,
including that the charter school holds nonprofit status, has sufficient
collateral, and has been operating as a school for at least 2 years.
According to the D.C. official overseeing the bond program, new charter
schools have not been able to benefit from this source of funding because
they have not been operating long enough to qualify. As of August
2003, the District has issued 7 bonds on behalf of 6 charter schools,
which has allowed District charter schools to borrow over $39.4 million




26
  This Credit Enhancement Revolving Fund is separate from the credit enhancement
initiatives under the federal Public Charter Schools Program. The federal program awarded
grants with fiscal year 2001 funding to five nonprofit organizations, two of which specify
that they plan to assist D.C. charter schools with obtaining credit.




Page 22                                                     GAO-03-899 Charter Schools
in bond revenues to use for their facilities. 27 One additional charter school
has a bond issue pending.

In addition to tax-exempt bonds, two other federal bond programs are
available to both traditional schools and charter schools in the district—
QZAB and private activity bonds. According to District officials, as of June
2003, no charter schools had applied for either of these programs.

Figure 3 shows a summary of the kinds of facility assistance received by
D.C. charter schools operating during the 2002-2003 school year. Some of
this assistance was received at start-up, such as temporary housing in the
hub school, some was received after start-up, for example, tax-exempt
bonds for facilities, and some is received on an on-going basis, for
example, the per-pupil facilities allotment received by all schools. For a
list of charter schools operating in the District in the 2003-2003 school
year and their facility status, see appendix III.




27
 All 6 bonds have been purchased by private entities, such as Bank of America and
SunTrust, and are not available for purchase on the open market. As such, they have not
been rated for credit risk.




Page 23                                                     GAO-03-899 Charter Schools
                            Figure 3: Kinds of Facilities Assistance Provided through the District to Charter
                            Schools Operating during School Year 2002-2003


                                                                                                                    a
                                Resource                                      Number of charter schools


                                Per-pupil facilities allotment                                                                                 39

                                Occupying (or previously
                                occupied) space in a                                                                    19
                                DCPS building at start-up


                                Direct loanb                                                    7



                                Tax-exempt bonds                                            6


                                Credit enhancement                                          6


                            Source: GAO synthesis of information given by D.C. government officials and charter school authorizers.
                            a
                             These numbers are current as of school year 2002-2003 and schools can benefit from multiple
                            resources.

                             The direct loan program has obligated its funds to 7 charter schools, but has not completed
                            b


                            distributing funds.


The District, Like a Few    Like new charter schools in other parts of the country, new charter
States, Provides Early      schools in the District also incur high start-up costs early in the design and
Access to Funds to Lessen   planning stages. A variety of District charter school founders and others
                            knowledgeable about charter school issues said that there were limited
Start-Up Funding Issues     options for obtaining start-up funding to plan a new school, but that once
                            the charter application was approved, more funding options became
                            available. The D.C. Public Charter School Board and the D.C. Board of
                            Education have similar application processes, which usually start over a
                            year before the school’s intended opening. Figure 4 shows a typical
                            timeline, including when a charter school might expect to become eligible
                            for public funds. Charter schools in the District must apply for their
                            charter by June for the school year that starts in September of the
                            following year. Between July and August, both chartering boards hold
                            public hearings to ask questions of the charter schools and to allow the
                            community to provide input on the charter school. In August, preliminary
                            decisions are made on the charter. At that point, charter applications
                            receive a preliminary approval, a full approval, or a denial. According to




                            Page 24                                                                                     GAO-03-899 Charter Schools
                                                                officials from both authorizing boards, many of their applications receive a
                                                                preliminary approval before a full approval.28

Figure 4: Timeline of D.C. Public Chartering Process and Eligibility for Public Funds

Eligibility for public funds

                                                                                               Approved charter
     Federal                                                                                      schools with a
  preplanning                                                                                  facility can borrow
    subgrant                                                                                   funds against their                                  First-quarter
    available                                                                                 first year allotments                                  per-pupil
                                                                                                                                                               b

  to potential                              Charter schools with preliminary approval are eligible                                                 payment given
   applicants                                         for federal funds from the Public                                                              to charter
(up to $10,000)                                 Charter Schools Program (up to $110,000)                                                               schools


  Up to 12
                     June        July      Aug.       Sept.     Oct.         Nov.      Dec.      Jan.      Feb.       March   April   May   June       July         Aug.    Sept.
 months prior


Preplanning       Applications          First decision made          If preliminary approval issued,                                                                       Schools
  process            due                      on charter             charter schools address issues                                                                         open
                                        (Approved, denied,
                                            or preliminary                                    Final decision made
                                              approval)                                        by Public Charter
                                                                                                              a
                                                                                                 School Board
                              Public
                             hearings


Chartering process
Source: GAO analysis of charter school authorizers documents.
                                                                a
                                                                 The D.C. Board of Education does not have a specific date for making final decisions, as those
                                                                decisions are made on a case-by-case basis.
                                                                b
                                                                 This payment consists of both the per-pupil facilities allotment and the per-pupil operational
                                                                allotment.


                                                                Until fiscal year 2003, charter schools were not eligible for public funds
                                                                prior to receiving preliminary approval. As a result, charter schools relied
                                                                on private sources of funding to cover their expenses. For example, one
                                                                recently approved charter school founder reported spending close to
                                                                $200,000 in private foundation funds during the early planning stages of
                                                                the charter school to pay for fees and feasibility studies on a facility she
                                                                planned to use for her charter school. Another charter school founder said
                                                                that he had to take out a personal loan to put a deposit on a facility.
                                                                Charter school founders said that early funds would be helpful in paying



                                                                28
                                                                 To receive full approval, it is required that charter schools secure a facility. According to
                                                                officials from the charter school authorizing boards, this is the most difficult part of the
                                                                application process.




                                                                Page 25                                                                     GAO-03-899 Charter Schools
for such things as compensation for the time professionals spent on
writing the charter application and initial inspections of facilities.

Beginning in fiscal year 2003, D.C. began awarding pre-planning subgrants
for up to $10,000 from its federal Public Charter Schools Program grant,
making some funds available earlier in the process.29 Potential charter
school applicants can obtain these grants prior to the submission of the
charter application. The D.C. program specifies that these funds may be
used for up to 12 months of pre-planning activities, such as the
professional development of the charter school planning team and
informing the community about the school. In fiscal year 2003, nine D.C.
charter school groups received these grants.

D.C. charter school applicants that have received preliminary approval are
eligible to apply for Public Charter Schools Program subgrants for up to
$110,000 to be used the first year following preliminary approval. In the
second and third years, charter schools can receive subgrants in amounts
from $95,000 to $200,000 to be used for implementation purposes. In fiscal
year 2003, DCPS awarded 4 first-year subgrants for $110,000 each and
5 second/third year subgrants for $200,000 each. Applicants can apply for
one or all of these subgrants— pre-planning, first, second, and third year—
but the total period of time in which these funds are received cannot
exceed 36 months.

The District also provides charter schools with access to some local
funds—a short-term loan against their annual funds and early payment of
their first-quarter funds—after the charter is fully approved and prior to
the schools opening. To receive either type of funding, schools must have
obtained full approval of their charter, secured a facility, and hold
nonprofit status. According to District officials, no charter schools have
applied for the short–term loan in the past 3 years because the District
changed its policy and now disburses its first-quarter payment in July,
approximately 6-8 weeks prior to the start of the school year. The timeline
for receiving the first-quarter payment is now consistent with when many
charter schools can meet the eligibility requirements for receiving this
loan.




29
 The DCPS Office of Federal Grant Programs administers federal funding opportunities for
charter schools authorized by the DCPS Board of Education and the District of Columbia
Charter School Board.




Page 26                                                    GAO-03-899 Charter Schools
The District Charter       New charter school founders in the District are similar to charter school
School Resource Center’s   founders across the country in that they must have expertise in a wide
Closing Has Diminished     range of areas to successfully open and operate a charter school. In our
                           discussions, some D.C. charter school experts said that one of the
Access to Start-Up         challenges that many charter school founders encounter is acquiring the
Knowledge, although        business and legal knowledge necessary to run a school. D.C. charter
Some Local Resources       school experts said that many charter school founders have a vision for
Are Available              the education they want to provide their students but do not always know
                           how to manage the many tasks involved with administering a school. To
                           address this issue, the District chartering authorities provide some
                           assistance with the application and other technical assistance to school
                           founders during the chartering process. However, this support is often
                           limited to assisting charter school groups with the application process and
                           does not always include support once the application has been approved.
                           For this reason, many charter schools turn to private and nonprofit
                           resources to assist them with these issues.

                           The nonprofit D.C. Charter School Resource Center offered assistance to
                           charter school groups until it closed in the spring of 2003. According to
                           individuals familiar with the D.C. resource center, since 1998 it offered
                           classes on how to fill out the charter application and put charter school
                           groups in contact with organizations that would potentially provide some
                           monetary assistance.30 Local charter school advocates told us that the
                           nonprofit D.C. Charter School Resource Center’s recent closing has
                           limited the amount of assistance available to help new charter schools
                           founders acquire necessary expertise.


                           The clear consensus among those with whom we spoke and in the
Concluding                 literature we reviewed was that start-up funds and obtaining an adequate
Observations               facility remain significant obstacles for charter schools, especially in those
                           locations like the District of Columbia, where the cost of and demand for
                           property is high. Relative to charter schools in many other locations,
                           District charter schools benefit from a greater variety of facilities-related
                           support, such as a per-pupil facility allowance and preference to surplus
                           school buildings. In addition, recent steps taken to identify surplus
                           property and underutilized school buildings have potential for making
                           additional space available to charter schools. However, although the law



                           30
                            We were unable to contact officials from the D.C. Resource Center, as the Center closed
                           during the time of our review.




                           Page 27                                                     GAO-03-899 Charter Schools
                      provides for giving charter schools a limited preference in acquiring
                      surplus DCPS property, it also contains the stipulation that the preference
                      is only to be given provided that doing so will not result in a significant
                      loss of revenue that might otherwise be obtained.


Agency Comments and   We provided a draft of this report to the Department of Education for its
Our Evaluation        review and comment. Education’s Executive Secretariat confirmed that
                      Education officials had reviewed the draft and found the information in
                      the draft to be helpful. Education officials had no comments except for a
                      few technical clarifications, which we incorporated as appropriate in this
                      report.

                      We also provided a draft of this report to officials at both of the D.C.
                      charter school authorizing bodies - the D.C. Board of Education and the
                      D.C. Public Charter School Board. In addition, we provided portions of the
                      draft report pertaining to the District of Columbia to officials from D.C.
                      Public Schools, the Executive Office of the Mayor, the Department of
                      Banking and Financial Institutions, and the Office of the Chief Financial
                      Officer. Officials from these offices provided technical comments, which
                      we incorporated as appropriate in this report.


                      We are sending copies of this report to the Secretary of the Department of
                      Education, relevant congressional committees, relevant District of
                      Columbia officials, and other interested parties. We will also make copies
                      available to others upon request. In addition, the report will be available at
                      no charge on GAO’s Web site at http://www.gao.gov. Please contact me at
                      (202) 512-7215 if you or your staffs have any questions about this report.
                      Other major contributors to this report are listed in appendix V.




                      Marnie S. Shaul
                      Director, Education, Workforce,
                       and Income Security Issues




                      Page 28                                             GAO-03-899 Charter Schools
             Appendix I: Scope and Methodology
Appendix I: Scope and Methodology


             To obtain information about the challenges faced by charter school start-
             ups across the country and the resources available, we analyzed federal
             and state charter school laws. We conducted interviews with U.S.
             Department of Education officials, charter school policy experts, and
             charter school advocates in various states. Specifically, we interviewed
             representatives from the Charter School Friends National Network, the
             Progressive Policy Institute, and other advocacy and research groups. We
             also interviewed representatives from charter school resource centers in
             some states—Florida, Massachusetts, Minnesota, Pennsylvania,
             Tennessee, and Wisconsin—that were identified as having proactive
             resource centers by those knowledgeable about charter schools. We also
             conducted a review of all state laws on charter school facilities. We
             reviewed the Department of Education’s 4-year studies on the state of
             charter schools and Education’s Public Charter Schools Program
             evaluation. Additionally, we analyzed Education Commission of the States
             data published in the Collection of Charter School ECS StateNotes.

             To obtain information about charter schools in the District of Columbia,
             we analyzed District of Columbia and federal laws affecting charter
             schools in the District. We interviewed officials from the District of
             Columbia Board of Education Public Charter Schools Oversight Office, the
             District of Columbia Public Charter School Board, the District of Columbia
             Public Schools, and several other D.C. government offices, including the
             Executive Office of the Mayor, the Department of Banking and Financial
             Institutions, and the Office of the Chief Financial Officer. We conducted a
             discussion group consisting of District representatives from charter school
             advocacy groups, researchers, charter school founders, and other
             individuals knowledgeable of charter school issues in the District of
             Columbia. We also interviewed founders of D.C. charter schools, as well as
             other representatives from the D.C. charter school community, including
             the AppleTree Institute, Friends of Choice in Urban Schools (FOCUS), and
             the Charter Schools Development Corporation. We also visited César
             Chávez Public Charter High School for Public Policy, 1 of the 39 charter
             school campuses in the District.




             Page 29                                           GAO-03-899 Charter Schools
                                              Appendix II: Charter School Facility
Appendix II: Charter School Facility          Assistance Provisions, as of July 2003



Assistance Provisions, as of July 2003


State                  State requirements pertaining to facility assistance for charter schools.
Alabama                N/A
Alaska                 Law permits operation of schools in existing school district facilities upon approval of district’s administrative
                       staff.
Arizona                State has a “stimulus fund” which provides financial support for start-up costs and costs associated with
                       facilities’ renovations or remodeling. The Arizona Department of Education must publish an annual list of
                       existing vacant and unused buildings, and unused portions of buildings available to charter schools. (No
                       lease/purchase preference is given to charter schools.)
Arkansas               No facilities assistance provisions.
California             State has established a “Charter School Facilities Account” funded by bond proceeds (K-12). Additionally, the
                       state has set up a charter school facility grant program for charter schools located in low-income areas which
                       awards up to $750 per student to provide assistance for up to 75 percent of the charter school’s annual
                       facilities rent and lease costs. Each school district must make any vacant school facilities available to charter
                       schools at minimum charge.
Colorado               Charter schools must be able to use district facilities “deemed available” by the school district at no cost, except
                       for operations and maintenance expenses. The state must distribute a portion of its education funds to charter
                       schools to help cover capital construction costs. A charter school may ask its local school board to issue bonds
                       to fund capital construction expenses.
Connecticut            State has established a grant program that provides charter schools with up to $500,000 for assistance with
                       capital expenses; to be eligible, the charter school must have been operating during the prior fiscal year.
Delaware               School districts must make unused buildings or space available for charter schools, and must “bargain in good
                       faith” over the cost of rent, services, and maintenance. The Delaware Department of Education must publish an
                       annual list of facilities available for charter school use.
District of Columbia   District of Columbia offers charter schools a limited preference to lease or purchase surplus public school
                       buildings provided that doing so will not result in a significant loss of revenue that might be obtained from other
                       dispositions or uses of the facility or property. An “enhanced credit fund” has also been established to help
                       charter schools finance the purchase, construction, and/or renovation of facilities. District charter schools also
                       receive an annual per-pupil facilities allowance.
Florida                State agencies may issue revenue bonds to provide for charter school facilities assistance. Charter schools are
                       also eligible for facilities assistance from a state capital outlay fund. Charter schools are offered a preference to
                       use surplus school buildings.
Georgia                Georgia State Board of Education may require a local referendum to decide whether a local board of education
                       must provide funds from school tax levies or incur bonded indebtedness or both, to support a charter school.
Hawaii                 State oversees annual maintenance and repairs for charter school facilities and establishes a priority-of-need
                       list for charter school facilities requiring assistance.
Idaho                  A charter school’s board of directors may borrow money to finance the purchase of facilities for charter schools.
Illinois               A charter school may negotiate and contract with a school district, a state college or university, or any other
                       public, nonprofit, or for-profit entity for a school charter site. If a charter school uses an existing school building,
                       the school is only required to pay the building operation and maintenance costs—no rent is required.
Indiana                No facilities assistance provisions.
Iowa                   No facilities assistance provisions.
Kansas                 No facilities assistance provisions.
Kentucky               N/A
Louisiana              Local school boards must make any vacant facility available to charter schools at fair market value. Facilities
                       that were constructed at no cost to the school board must be provided to the charter school at no cost.




                                              Page 30                                                           GAO-03-899 Charter Schools
                                       Appendix II: Charter School Facility
                                       Assistance Provisions, as of July 2003




State            State requirements pertaining to facility assistance for charter schools.
Maine            N/A
Maryland         No facilities assistance provisions.
Massachusetts    Massachusetts funds charter schools on a per-pupil basis. As part of this payment, the state includes the
                 charter school’s cost of leasing a facility, as well as facility maintenance and operation expenses, in the
                 payment.
Michigan         No facilities assistance provisions.
Minnesota        The state provides building lease aid grants to charter schools. A charter school may lease space from an
                 eligible charter school sponsor or from another public or private nonprofit nonsectarian organization.
Mississippi      No facilities assistance provisions.
Missouri         A state school district may incur bonded indebtedness or “take other measures” to provide for physical facilities
                 and other capital items to charter schools that it sponsors or contracts with.
Montana          N/A
Nebraska         N/A
Nevada           No facilities assistance provisions.
New Hampshire    Charter schools and their “host” school district are encouraged to enter into “mutually advantageous”
                 contracting relationships resulting in the sharing of facilities. A charter school is not eligible for facility
                 assistance unless the school is leasing a building owned by the school district, and the lease does not include
                 an option to purchase the building.
New Jersey       No facilities assistance provisions.
New Mexico       Charter schools are not required to pay rent for available school district facility space. New Mexico has
                 established a “Charter School Stimulus Fund” for the initial costs of renovating and remodeling existing
                 buildings.
New York         State must publish an annual list of available state buildings for use by charter schools. State established a
                 charter school “stimulus fund” for acquisition, renovation, and construction of charter school facilities.
North Carolina   If a charter school that has applied for approval to the State Board of Education is unable to find a building, the
                 Board can approve the charter school to operate in an “adjacent local school administrative unit” for one year.
                 At the request of a charter school, a school district must lease “any” available building or land to the charter
                 school, unless the lease is not economically practical or feasible, or the district does not have adequate
                 classroom space to meet its enrollment needs. A school district may lease a building to a charter school free of
                 charge, except for maintenance and insurance expenses. North Carolina Capital Facilities Finance Agency (or
                 its successor) may issue bonds on behalf of charter schools.
North Dakota     N/A
Ohio             Charter schools may use a school district facility under any contract terms that the district agrees to. Charter
                 schools may use loans obtained under the state facilities loan guarantee program for the construction of new
                 school buildings. If a board of education decides to dispose of property suitable for classroom space, it must
                 first offer the property for sale to start up community schools.
Oklahoma         State has established an “incentive fund” for charter school renovation and remodeling of existing building.
Oregon           To the extent such information is readily available, education service districts must make lists of vacant
                 buildings available to the public; however, there is no preference or obligation to lease to a charter school.
Pennsylvania     No facilities assistance provisions.
Puerto Rico      No facilities assistance provisions.
Rhode Island     Public charter schools sponsored by school districts are eligible for reimbursement of “school housing costs.”
                 Public charter schools not sponsored by school districts are eligible for 30 percent reimbursement of “school
                 housing costs.”




                                       Page 31                                                        GAO-03-899 Charter Schools
                                              Appendix II: Charter School Facility
                                              Assistance Provisions, as of July 2003




 State                  State requirements pertaining to facility assistance for charter schools.
 South Carolina         State must publish an annual list of vacant state buildings. Charter schools have a “right of first refusal” for
                        vacant school buildings.
 South Dakota           N/A
 Tennessee              No facilities assistance provisions.
 Texas                  Nonprofit revenue bonds may be issued for facilities assistance.
 Utah                   No facilities assistance provisions.
 Vermont                N/A
 Virginia               Charter schools do not have to pay rent for available school buildings.
 Washington             N/A
 West Virginia          N/A
 Wisconsin              No facilities assistance provisions.
 Wyoming                Charter schools are not required to pay rent for school property “deemed available” in school district.
Source: GAO analysis.




                                              Page 32                                                          GAO-03-899 Charter Schools
                                        Appendix III: Charter Schools Operating
Appendix III: Charter Schools Operating during 2002-03 School Year in D.C. and
                                        Facility Status


during 2002-03 School Year in D.C. and
Facility Status

                                                                        Occupied a former DCPS
                              Charter schools campus                      building at start-up   Current facility status
Authorized by D.C. Public Charter School Board
1                             Arts and Technology Academy                         Y              Purchased former DCPS
                                                                                                 building
                                                                    a
2                             Associates for Renewal in Education                 Y              Leasing DCPS building
3                             Capital City                                        N              Leasing commercial space
4                             Carlos Rosario International                        Y              Leasing nonprofit and
                                                                                                 commercial space,
                                                                                                 purchased facility for use
                                                                                                 beginning SY 2003
5                             César Chávez Public Charter High                    N              Leasing commercial space
                              School for Public Policy
6                             Friendship-Edison Blow Pierce Junior                Y              Purchased former DCPS
                              Academy Public Charter School                                      building
7                             Friendship-Edison CG Woodson                        Y              Leasing DCPS building
                              Senior Academy Public Charter
                              School
8                             Friendship-Edison Chamberlain                       Y              Purchased former DCPS
                              Public Charter School                                              building
9                             Friendship-Edison Woodridge Public                  Y              Purchased former DCPS
                              Charter School                                                     building
10                            Howard Road Academy Public                          Y              Owns new building
                              Charter School
11                            KIPP DC/KEY Academy Public                          N              Leasing commercial space
                              Charter School
12                            Marriott Hospitality Public Charter                 N              Leasing former D.C.
                              High School                                                        government building
13                            Maya Angelou See Forever Public                     Y              Purchased commercial
                              Charter School                                                     building
14                            Meridian Public Charter School                      N              Leasing commercial space
15                            New School for Enterprise and                       Y              Leasing commercial space
                              Development Public Charter School
16                            Paul JHS Public Charter School                      Y              Conversion school - leasing
                                                                                                 from DCPS
17                            Sasha Bruce Public Charter School                   N              Will lease space from CSDC
                                                                                                 in fall 2003
18                            School for Arts in Learning Public                  N              Purchased private building
                              Charter School
19                            SEED Public Charter School                          N              Leasing DCPS building
20                            South East Academy Public Charter                   N              Purchased commercial
                              School                                                             building




                                        Page 33                                                  GAO-03-899 Charter Schools
                                                               Appendix III: Charter Schools Operating
                                                               during 2002-03 School Year in D.C. and
                                                               Facility Status




                                                                                                   Occupied a former DCPS
                                                 Charter schools campus                              building at start-up         Current facility status
 21                                              Thurgood Marshall Academy Public                               N                 Leases from a nonprofit; sale
                                                 Charter School                                                                   pending for DCPS building
 22                                              Tree of Life Public Charter School                             N                 Leases commercial space
 23                                              Tri-Community Public Charter                                   N                 Leasing from soldier’s home
                                                 Schoool                                                                          (federal government
                                                                                                                                  property) beginning school
                                                                                                                                  year 2003
 24                                              Washington Math Science and                                    N                 Leasing commercial space
                                                 Technology Public Charter School
 Authorized by the D.C. Board of Education
 25                                              Barbara Jordan PCS                                             Y                 Leasing DCPS space in the
                                                                                                                                  hub school
 26                                              Booker T. Washington PCS                                       N                 Leasing commercial space
 27                                              Children’s Studio PCS                                          Y                 Leasing a DCPS building
 28                                              Community Academy PCS                                          Y                 Leasing DCPS building;
                                                                                                                                  pending sale
 29                                              Elsie Whitlow Stokes Community                                 N                 Leasing from a nonprofit
                                                 Freedom PCS
 30                                              Hyde Leadership PCS                                            Y                 Leasing DCPS building
 31                                              Ideal Academy PCS                                              Y                 Leasing DCPS space in the
                                                                                                                                  hub school
 32                                              Integrated Design Electronic                                   Y                 Purchased former DCPS
                                                 Academy (IDEA) PCS                                                               building
 33                                              JOS-ARZ Therapeutic PCS                                        N                 Leasing commercial space
 34                                              Kamit Institute for Magnificent                                Y                 Leasing DCPS space in the
                                                 Achievers (KIMA) PCS                                                             hub school
 35                                              Next Step PCS                                                  N                 Leasing commercial space
                                                                                                                                  from Latin American Youth
                                                                                                                                  Center
 36                                              Options PCS                                                    N                 Leasing commercial space,
                                                                                                                                  will move into CSDC space
                                                                                                                                  fall 2003
 37                                              Roots PCS                                                      N                 Purchased the building
 38                                              Village Learning Center PCS                                    N                 Leasing commercial space
                                                 (elementary school)
 39                                              Village Learning Center PCS (middle                            Y                 Leasing DCPS building
                                                 and high school)
Source: D.C. Public Charter School Board and DCPS Board of Education.

                                                               Note: Public Charter School (PCS).
                                                               a
                                                                   Associates for Renewal in Education PCS closed in June 2003.




                                                               Page 34                                                            GAO-03-899 Charter Schools
                                      Appendix IV: A Comparison of Number of
Appendix IV: A Comparison of Number ofCharter Schools and Select Resources
                                      Available


Charter Schools and Select Resources
Available

                       Number of charter        Size of federal Public
                        schools 2002-03    Charter School State Grant          Law provides for           Law allows access to
State                      school yeara                   ($ for FY 02)        facilities funding              public facilities
Alaska                               15                              0                        No                            Yes
Arizona                             464                   $16,850,260                        Yes                            Yes
Arkansas                              8                     $1,022,000                        No                             No
California                          428                   $24,845,129                        Yes                            Yes
Colorado                             93                     $7,141,048                       Yes                            Yes
Connecticut                          16                      $200,000                        Yes                             No
Delaware                             11                     $1,066,666                        No                            Yes
                                       b
District of Columbia                 35                     $2,941,177                       Yes                            Yes
Florida                             227                   $25,564,000                        Yes                            Yes
Georgia                              35                           $100                        No                             No
Hawaii                               25                     $4,368,421                        No                             No
Idaho                                13                     $1,129,412                        No                             No
Illinois                             29                     $1,136,446                        No                            Yes
Indiana                              10                     $3,947,638                        No                             No
Iowa                                  0                              0                        No                             No
Kansas                               30                     $3,000,000                        No                             No
Louisiana                            20                           $100                        No                            Yes
Maryland                              0c                             0                        No                             No
Massachusetts                        46                     $3,387,247                       Yes                             No
Michigan                            196                     $6,081,376                        No                             No
Minnesota                            87                     $9,970,543                       Yes                            Yes
Mississippi                           1                              0                        No                             No
Missouri                             26                           $100                        No                             No
Nevada                               13                     $2,627,520                        No                             No
New Hampshire                         0                        $10,000                        No                            Yes
New Jersey                           56                     $3,552,828                        No                             No
New Mexico                           28                     $5,125,000                       Yes                            Yes
New York                             38                     $4,727,267                       Yes                            Yes
North Carolina                       93                     $4,284,210                        No                            Yes
Ohio                                131                   $21,044,050                         No                            Yes
Oklahoma                             10                      $529,412                        Yes                             No
Oregon                               25                     $5,293,582                        No                            Yes
Pennsylvania                         91                     $8,507,000                        No                             No
                                       d
Puerto Rico                           1                              0                        No                             No




                                      Page 35                                                       GAO-03-899 Charter Schools
                                       Appendix IV: A Comparison of Number of
                                       Charter Schools and Select Resources
                                       Available




                        Number of charter           Size of federal Public
                         schools 2002-03       Charter School State Grant                Law provides for             Law allows access to
 State                      school yeara                      ($ for FY 02)              facilities funding                public facilities
 Rhode Island                          8                                  $100                            Yes                            No
 South Carolina                       13                           $4,193,313                             No                            Yes
 Tennessee                             0                           $1,710,526                             No                             No
 Texas                               221                          $10,900,000                             No                             No
 Utah                                 12                           $2,252,250                             No                             No
 Virginia                              8                             $525,694                             No                            Yes
 Wisconsin                           130                           $9,452,160                             No                             No
 Wyoming                               1                             $168,500                             No                            Yes
Source: GAO analysis.
                                       a
                                           Center for Education Reform.
                                       b
                                           GAO analysis – 35 charter schools operate on 39 campuses.
                                       c
                                           Maryland did not pass its charter school law until May 2003.
                                       d
                                           As of the 1999-2000 school year, according to Education.




                                       Page 36                                                                  GAO-03-899 Charter Schools
                  Appendix V: GAO Contacts and Staff
Appendix V: GAO Contacts and Staff
                  Acknowledgments



Acknowledgments

                  Deborah L. Edwards, (202) 512-5416, edwardsd@gao.gov
GAO Contacts      Tamara Fucile, (202) 512-9895, fucilet@gao.gov


                  The following staff also contributed to this report: Anjali Tekchandani,
Staff             Behn Miller Kelly, Ronald La Due Lake, and Patrick Dibattista.
Acknowledgments




                  Page 37                                            GAO-03-899 Charter Schools
             Related GAO Products
Related GAO Products


             Public Schools: Insufficient Research to Determine Effectiveness of
             Selected Private Education Companies. GAO-03-11. Washington, D.C.:
             October 29, 2002.

             School Vouchers: Characteristics of Privately Funded Programs.
             GAO-02-752. Washington, D.C.: September 26, 2002.

             School Vouchers: Publicly Funded Programs in Cleveland and
             Milwaukee. GAO-01-914. Washington, D.C.: August 31, 2001.

             Charter Schools: Limited Access to Facility Financing.
             GAO/HEHS-00-163. Washington, D.C.: September 12, 2000.

             Charter Schools: Federal Funding Available but Barriers Exist.
             GAO/HEHS-98-84. Washington, D.C.: April 30, 1998.

             Charter Schools: Recent Experiences in Accessing Federal Funds.
             GAO/T-HEHS-98-129. Washington, D.C.: March 31, 1998.

             Charter Schools: Issues Affecting Access to Federal Funds.
             GAO-T-HEHS-97-216. Washington, D.C.: September 16, 1997.

             Private Management of Public Schools: Early Experiences in Four School
             Districts. GAO/HEHS-96-3. Washington, D.C.: April 19, 1996.

             Charter Schools: New Model for Public Schools Provides Opportunities
             and Challenges. GAO/HEHS-95-42. Washington, D.C.: January 18, 1995.




(130234)
             Page 38                                         GAO-03-899 Charter Schools
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