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Charter School Vulnerabilities to Waste, Fraud, and Abuse

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The title of this report, Charter School Vulnerabilities To Waste, Fraud, And Abuse, was borrowed from the title of a section of a report that appeared in The Department of Education’s Office of the Inspector General’s Semiannual Report to Congress, No. 60. The report references a memorandum issued by the OIG to the Department. The OIG stated that the purpose of the memorandum was to, “alert you of our concern about vulnerabilities in the oversight of charter schools.”  The report went on to state that the OIG had experienced, “a steady increase in the number of charter school complaints” and that state level agencies were failing “to provide adequate oversight needed to ensure that Federal funds [were] properly used and accounted for.” 

The purpose of this report is to echo the warning issued by the OIG and to inform the public and lawmakers of the mounting risk that an inadequately regulated charter industry presents to our communities and taxpayers. Our examination, which focused on 15 large charter markets*, found fraud, waste, and abuse cases totaling over $100 million in losses to taxpayers. Despite rapid growth in the charter school industry, no agency, federal or state, has been given the resources to properly oversee it.  Given this inadequate oversight, we worry that the fraud and mismanagement that has been uncovered thus far might be just the tip of the iceberg. Our hope is that lawmakers will use the information and concrete recommendations that we outline in this report to pass meaningful oversight legislation.