Tuesday, June 02, 2009

Charter Schools v. State Comptroller: Court of Appeals Hears Case

This afternoon the state Court of Appeals, the highest court, heard oral arguments on the case brought by charter schools to stop audits by the Office of the State Comptroller. The dynamics of how the court functions were very interesting to me as someone who has never sat through a hearing like this and doesn't pretend to know if the line of questioning necessarily works in favor of the charter school side.

The lawyers on both sides, charter and the state, do not speak long without getting peppered by questions from the judges in a random, indiscriminate way. The judges also take an adversarial position with both sides either because they are genuinely skeptical, or want the case made for the side they are inclined to support -- it's not easy to tell.

It may seem a quaint notion in modern America, but constitutions at the federal and state level generally limit governments from doing things, and assign powers with such limits. In this case, the New York State Constitution (Article V) limits Comptroller auditing power to political subdivisions of the state, that is, governmental entities. Charter schools are not governments; rather, they are non-profit educational corporations which are incorporated by the Board of Regents.

The Comptroller's office makes no distinction between charter schools and school districts, and the state lawyer, Deputy Solicitor Andrew Bing, did not concede any limits with respect to charter schools. Charters are public schools spending mostly public money to fulfill a public purpose.

All true, of course, but these characteristics do not give free rein to the Comptroller to audit, if the constitution means anything, with all due respect to Mr. Bing. Though Article V of the constitution dates back several decades, the case law on the Comptroller's auditing power is more recent. A 1996 Court of Appeals ruling struck down the Comptroller' attempt to audit Blue Cross/Blue Shield, which handles hundreds of millions in public dollars (Blue Cross & Blue Shield of Central N.Y. v. McCall, 89 NY2d 160 [1996]). Instead, it is the job of the state Insurance Department to oversee and regulate Blue Cross and the expenditures of public funds. If the Department isn't doing an adequate job of oversight, the Comptroller can investigate the Department, not the Corporation, Blue Cross.

Similarly, charter schools have plenty of financial oversight from the state and city education departments and the SUNY Charter Schools Institute. These entities review school financials in a timely basis, including internal controls at schools, and make judgments about how public funds are being spent by the schools.

Just How Effective is the Comptroller?
One of the frustrating aspects to this whole case is that the Comptroller's work is assumed to be a good thing. While the arguments being made by charter schools are focused on the constitutional issues, Comptroller audits should not always be assumed as positive or effective.

As a practical matter, Comptroller audits oftentimes are a waste. The auditors generally are in search of problems at a given place for months and will site the most trivial issues to justify their work. Audit findings often ignore the context of a problem since it makes for a great press release for the Comptroller to say, for example, he discovered charter school teachers went on a school-financed trip to a Carribbean island.

What is deliberately overlooked in this example was the Comptroller doesn't acknowledge that this trip made by teachers at the KIPP Academy Charter School in the Bronx, one of the highest academically performing schools in the entire state was paid for with the millions of dollars it fundraises to reward teachers for working 40 days more per year than their district counterparts.

Too much context in audits, and the fairness that goes with that, diminishes the Comptroller's usefulness and the political benefits to that job.

Peter Murphy
for The Chalkboard

Disclaimer: The Chalkboard is hosted by the New York Charter Schools Association (NYCSA) as a place where members, public education advocates and others can view and respond to informed commentary on timely public education and charter school issues. The views expressed here are not necessarily the official views of the NYCSA, its board, or of any of its individual charter school members. Anyone who claims otherwise is violating the spirit and purpose of this blog. To comment on anything you read here, or to offer tips, advice, comments, or complaints. please contact TheChalkboard.