The Delaware Department of Education's Charter School Accountability Committee today recommended the revocation of Pencader Business and Finance Charter High School’s charter at the end of this academic year because of serious financial and governance concerns related to the New Castle-area school.
“This school continues to operate at a significant financial shortfall requiring loans and major cuts, which effect the school’s ability to provide a quality education,” said Deputy Secretary Dan Cruce, who chairs the committee. “While the committee credits the school for making leadership changes on its board and in the building administration, the budgetary problems that remain are overwhelming.”
Pencader, which opened in 2006, was put on formal review at the April 21, 2011, State Board of Education meeting. It was the third time in the school’s history that it had been placed on formal review.
The purpose of the formal review process is to see if a school is violating the terms of its charter. It is an investigative tool to see if remedial measures are needed.
Formal review can be prompted by internal concerns, such as questions about finances, or external, such as tips or complaints from the public. In the case of Pencader, state charter office officials noticed a pattern of financial mismanagement at the school leader and board level that raised concerns about their ability to operate the school effectively. They also noticed a significant financial shortfall for this year. Last year, the school board had to secure a $200,000 loan to deal with a similar deficit.
Before recommending formal review, charter office staff typically will meet informally with school leadership to present issues and give the school a chance to respond. The State Board of Education must vote to put a school on formal review, typically based on a recommendation from the Secretary of Education, as was the case with Pencader.
Once a school is placed on formal review, the Charter School Accountability Committee convenes. It has 90 days to complete the process. The committee, formed by the Secretary of Education, includes voting members who are Delaware Department of Education staff and a community member as well as ex-officio members, such as a representative from the Delaware Charter School Network.
The following is a synopsis of the formal review process, which was followed with Pencader:
The first step is an initial meeting between the school and committee, when the school leadership is interviewed. The second step is a preliminary meeting of the committee to review the 14 criteria that are terms of a school's charter with the state. Often both meetings are held on the same day, as was the case with Pencader on May 6.
A report then is issued by the committee, and the school has 15 calendar days to respond. The Pencader report, dated May 23, 2011, is available online here. Pencader submitted its response on June 6.
At a final meeting, which occurred today, a vote on the criteria and a recommendation for next steps is taken. The recommendation could range from revocation to probationary conditions to removing from formal review.
The committee voted 4-0 with two abstentions today to recommend revocation of the charter. Among the concerns cited was the lack of specificity and cohesion in the school’s response to the financial problems. One committee member noted the school’s variance in its own estimate of Pencader’s deficiency this year, projecting it at one place at $337,000 and elsewhere at $658,000. The school provided no evidence that it had secured loans it referenced in the response, and committee members noted concern that the school’s plan to fix its deficit suggested it would take six years to recover from the shortfall.
The committee also outlined remaining problems with administrative operations, including a lack of expertise in the building to run day-to-day financial operations.
The next step in the process is a public hearing, which is scheduled for 5 p.m. Wednesday, July 13 in the Cabinet Room of the Townsend Building, 401 Federal St. in Dover.
Taking into account the committee's recommendation and comments from the public hearing, Former Secretary of Education Lillian Lowery then will make a recommendation to the State Board of Education for a vote at its July 21 meeting.
Should Former Secretary Lowery and the State Board follow the committee's recommendation to revoke the charter, other placements will be available for the students currently enrolled to attend Pencader next year. The children may return to the district schools in their home feeder patterns, or, with the approval of their home district and the new school, enroll in another charter school.
This is the second time this week that the committee has recommended revocation of a school’s charter. On Monday, the group voted 4-0 with one abstention to revoke the charter of Reach Academy for Girls because of serious financial and governance concerns. The public hearing for that case is at 5 p.m. July 11, also in the Cabinet Room.
“The state owes it to students, parents and taxpayers to hold these schools accountable when they fail in their obligations,” Cruce said. “We have entrusted these schools with public dollars and the education of Delaware students. The stakes are high, so when they falter, we must act.”
Formal Review Process Applied to Pencader Timeline
- Place on formal review: April 21, 2011
- Initial and preliminary CSAC meetings: May 6, 2011
- Preliminary CSAC report: May 23, 2011
- School response: June 6, 2011
- Final CSAC meeting: June 10, 2011
- Public hearing: July 13, 2011
- State Board of Education decision: July 21, 2011
Delaware Department of Education
401 Federal Street, Suite #2
Dover, Delaware 19901
Phone: (302) 735-4035
Fax: (302) 739-4654
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