Charter-Friendly Bill Preserves Educational Freedom

Democrat Assemblyman Al Muratsuchi’s AB 84 threatens the educational freedom of Californians as it limits charter school funding and oversight, as explained in this article. With a particular target on non-classroom-based charter school programs, his changes would harm families’ abilities to homeschool or care for children who have additional needs and handicaps. However, this bill’s fate is still undecided, which means Californians still have a fighting chance to stop his legislation and support its alternative, Sen. Angelique Ashby’s (D-Sacramento) Senate Bill 414.

To review, the proposed aim of Muratsuchi’s bill was to promote “accountability” and “transparency” in the audit and authorization process of charter schools to combat fraud.  Of course, when the state’s debt is just over half a trillion dollars, the last thing we want is fraud that steals more money from the taxpayer. In the case of People v. McManus (2019) involving nineteen charter schools, the state endured a loss to the tune of $400 million. That’s not insignificant. But in the end, Muratsuchi’s proposed changes were far beyond the recommendations of the Legislative Analyst’s Office (LAO) and the Fiscal Crisis and Management Team (FCMAT).

“Accountability” and “transparency” can be a noble goal—it all depends on the execution. For this reason, those opposed to the overreaching AB 84 should support SB 414 instead.

SB 414 passed almost unanimously in the Senate, receiving bipartisan support. This is because it is not radical—it simply establishes a clearer process of audit authorization that reflects common practice. It does not overtly step on the toes of charter school funding and autonomy.

Here are the main comparisons between the two bills: 

Language around Non-Classroom-Based (NCB) Programs

SB 414 would update the terminology of “non-classroom-based” charter schools to “flex-based” charter schools. I tend to have an Orwellian fear of those who change language, but in this case, it signals the freedom-oriented spirit of the bill.

The term “flex-based” reorients us to the purpose of these programs—their flexibility. Parents value the flexibility of these programs and the freedom to choose what works best for them. In this case, a subtle change by Ashby is an essential one for the charter school movement. 

Certified Public Accountant (CPA) Training

Muratsuchi’s overreaching bill would create the Office of the Inspector General, an entirely new bureaucratic office with the authority to investigate charter schools and patronize them with audits as seen fit. AB 84 has few measures in place to limit the power of this office—it intends to hold charter schools “accountable” and prevent “bad actors” from taking advantage of taxpayer money, but forgets that the Inspector General’s power must have limits as well. And to mention, the office is governor-appointed—all it takes is a malignant governor to appoint a bureaucrat with ill intentions toward charter schools—then, all the Inspector General needs to do is audit the pants of schools until the administration is so overrun that they can hardly do their job. What a disaster.

On the contrary, SB 414 takes a simple approach to conducting audits of charter schools by utilizing certified public accountants (CPAs). This mimics the process that charter schools already go through to conduct audits, but adds more formal provisions for the training of CPAs. According to the bill’s analysis, CPAs must “complete 24 hours of initial training and 16 hours biennially in areas such as charter school finance, audit standards, and flex-based instructional models.” This ensures that CPAs are trained according to the unique financial model of charter schools and can recognize fraud if it occurs. Also, this would cost the taxpayer much less money than the institution and staffing of an entirely new bureaucratic office. 

What’s Included in Audits

SB 414 also sets out a clear guideline for what audits should look like, adding in more charter school-specific procedures. Among these are: 

• A review of credit, debit, and electronic payment transactions
• Review of any single transaction or fund transfer exceeding $1 million or 10% of the school’s budget
• Identification of the top 25 payments made to individuals or entities
• Review of teacher-student ratios in flex-based schools

Beyond these reasonable guidelines, the bill also limits the State Board of Education’s authority to reduce or revoke funding from non-classroom-based schools—according to the bill analysis, only when there is a “formal finding of demonstrable financial abuse, profiteering, or grossly excessive administrative expenses,” may the SBE revise funding determination for a school. 

Vendors

Muratsuchi’s AB 84 would completely change the way charter schools make contractor agreements, forcing them to seek the approval of their authorizing boards before closing on a contract. This could be for curriculum, enrichment programs, staffing, tech, or any imaginable need that comes up for a school. Additionally, AB 84 would prohibit schools from making contracts with private religious organizations or schools. This is unfair discrimination without any real ties to fraud. Again, a massive overreach.

However, Ashby’s SB 414 has a more appropriate approach to vendors, specifically educational enrichment vendors, who provide services and programs designed to extend learning beyond the standard curriculum. According to the bill analysis, it would establish these rules for contracting with educational enrichment vendors: 

• Requires background checks for vendor personnel
• Prohibits advance payment
• Requires school board approval for contracts exceeding $100,000
• Requires that enrichment activities be deemed educationally appropriate and approved by a teacher

These ensure that programs delivered to children are safe, financially responsible, and focused on education. Unlike AB 84’s approach to vendors, this one can actually be considered anti-fraud.

This is a step in the right direction.

Muratsuchi, in an April 30 education committee hearing for his bill, claimed that SB 414 “basically cherry-picks the low-hanging fruit” of the LAO and FCMAT recommendations for audit reform. In comparison, he claimed AB 84 bill was “comprehensive”—if comprehensive means gutting charter schools, then he’s absolutely correct. 

SB 414 takes a more appropriate approach to accountability. As Ashby recognizes in the bill analysis, 414 does not address all of the LAO and FCMAT recommendations. Instead of using a broad brush, she begins with simple, manageable, and cost-effective reform—it’s a foundation upon which more reform can be made if needed. It’s better to err on the side of small change in government, especially when educational freedom is on the line. 

So, don’t stop calling your Assembly members in support of SB 414, and Senators in opposition to AB 84. We cannot give up.