July 21, 2004
Arizona charter schools that operate for profit are public schools and should not have to refund millions of dollars to the federal government, according to an opinion released Tuesday by the Arizona Attorney General’s Office.
The opinion was prompted by a U.S. Department of Education audit, which looked at 20 Arizona charter schools and the way they spent federal money.
The audit report, released in November, stated that from October 2000 to September 2001, for-profit charter schools in Arizona received more than $1.1 million in federal entitlements, which education department regional inspector general Richard Dowd said the schools should have to refund because they do not meet the definition of a "public school."
Dowd also urged the Arizona Department of Education to figure out how much federal money the schools had received in subsequent years and require them to pay that back, too.
"Giving control of federal funds to a non-public entity is contrary to the law and could detrimentally affect the quantity and quality of (federally funded) services provided to disadvantaged students attending a private, for-profit school," the report states.
The report also cited two of the 20 schools audited for misusing federal funds or failing to properly report spending.
Still, Arizona Superintendent of Public Instruction Tom Horne disagreed with the report, saying Arizona law allows privately owned schools to meet the definition of a "local educational agency."
"Arizona law defines charter schools as ‘public schools,’ regardless of whether they are operated by a public or private entity," Horne argued in his appeal.
Based on Horne’s argument, federal officials asked the state attorney general to issue an opinion.
Attorney General Terry Goddard agreed with Horne, saying that Arizona’s forprofit charter schools meet the state and federal definitions of a public entity.