BILL ANALYSIS Ó
AB 440
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Date of Hearing: March 30, 2011
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
AB 440 (Brownley) - As Introduced: February 14, 2011
SUBJECT : Charter schools.
SUMMARY : Establishes academic and fiscal accountability
standards related to charter schools. Specifically, this bill :
1)Requires the State Controller (Controller) to propose and the
Education Audits Appeal Panel to adopt a charter school
supplement to the audit guide in consultation with the
California Charter Schools Association; requires charter
schools to complete annual audits consistent with the audit
guide; requires the Controller to annually publish a directory
of public accountants that are qualified to conduct audits of
charter schools; and, requires the regular rotation of public
accounting firms used to complete these audits consistent with
the federal Sarbanes-Oxley Act of 2002.
2)Requires a charter school operated as or by a for-profit
corporation to notify the Superintendent of Public Instruction
(SPI) of that fact in writing annually.
3)Allows a charter school authorizer to consider during the
authorization of a new charter school, whether the charter
school petitioner has operated another charter school and any
of the following have occurred: the charter has demonstrated
academic achievement equivalent to a persistently
lowest-achieving school; the charter school has not been
renewed; or, the school has had its charter revoked, as
specified.
4)Requires a chartering authority to consider, as one factor in
determining whether to grant a renewal, the degree to which a
charter school serves student populations that are similar to
local district student populations, the school's local
community, or the population identified in the charter
petition, especially related to high-need students, including,
but not limited to, students with disabilities, students
living in poverty and English learners.
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5)Changes the charter school renewal process to include the
following academic achievement requirements: a requirement
that charter schools achieve academic growth targets for each
student subgroup prior to renewal; a requirement that charter
schools in program improvement (PI) not be renewed for more
than three years; and, a requirement that charter schools in
PI year five not be renewed if the school has not exited PI
and did not meet adequate yearly progress (AYP) in the year
prior to renewal.
6)Allows a charter school authorizer to renew a charter school
for between one and five years.
7)Deletes the authorization for a chartering authority to renew
a charter petition if the academic performance is equal to the
academic performance of the public schools that the charter
school students would otherwise have been required to attend.
8)Makes Legislative findings and declarations regarding the
importance of establishing academic performance targets and
sound fiscal management practices in charter schools.
EXISTING LAW :
1)Establishes the Charter Schools Act of 1992 which authorizes a
school district, a county board of education or the state
board of education (SBE) to approve or deny a petition for a
charter school to operate independently from the existing
school district structure as a method of accomplishing, among
other things, improved student learning, increased learning
opportunities for all students, with special emphasis on
expanded learning experiences for students who are identified
as academically low achieving, holding charter schools
accountable for meeting measurable student outcomes, and
providing the schools with a method to change from rule-based
to performance-based accountability systems.
2)Authorizes a charter school to be granted for not more than
five years, and to be granted one or more renewals for five
years. Requires the renewals and material revisions of the
charter to be based upon the same standards as the original
charter petition.
3)Requires a charter school to transmit a copy of its annual,
independent financial audit report for the preceding fiscal
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year, to its chartering entity, the Controller, the county
superintendent of schools of the county in which the charter
school is sited, unless the county board of education of the
county in which the charter school is sited is the chartering
entity, and the department by December 15 of each year.
4)Requires, commencing on January 1, 2005, or after a charter
school has been in operation for four years, whichever date
occurs later, a charter school shall meet at least one of the
following criteria prior to receiving a charter renewal:
a) Attained its Academic Performance Index (API) growth
target in the prior year or in two of the last three years,
or in the aggregate for the prior three years.
b) Ranked in deciles 4 to 10, inclusive, on the API in the
prior year or in two of the last three years.
c) Ranked in deciles 4 to 10, inclusive, on the API for a
demographically comparable school in the prior year or in
two of the last three years.
d) The entity that granted the charter determines that the
academic performance of the charter school is at least
equal to the academic performance of the public schools
that the charter school pupils would otherwise have been
required to attend, as well as the academic performance of
the schools in the school district in which the charter
school is located, taking into account the composition of
the pupil population that is served at the charter school.
e) Has qualified for an alternative accountability system
pursuant to subdivision (h) of Section 52052
FISCAL EFFECT : According to the Assembly Appropriations
Committee on a substantially similar bill, annual General
Fund/Proposition 98 (GF/98) state reimbursable mandated costs,
likely $100,000, to local education agencies (LEAs) to review
and verify specified petition and renewal information required
under this bill. To the extent that the information required
for submission is more readily available to an LEA than current
law requirements, this cost may be offset.
COMMENTS : According to the California Department of Education
(CDE), the 2009-10 count of operating charter schools is 815
with student enrollment of more than 323,000 in the state. This
includes three statewide benefit charters and 20 SBE-approved
charters. Some charter schools are new, while others are
conversions from existing public schools. Charter schools are
part of the state's public education system and are funded by
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public dollars. A charter school is usually created or
organized by a group of teachers, parents and community leaders,
a community-based organization, or an education management
organization. Charter schools are authorized by school district
boards, county boards of education or the state board of
education. A charter school is generally exempt from most laws
governing school districts, except where specifically noted in
the law. Specific goals and operating procedures for the
charter school are detailed in an agreement (or "charter")
between the sponsoring board and charter organizers.
The measure ensures successful conditions for high performing
charter schools by specifying how charter authorizers shall
monitor and hold charter schools accountable, especially with
regard to student achievement by:
1)Allowing a charter authorizer to consider track record, if
any, a charter school petitioner has made at other charter
schools they operate as part of the authorization process of
new charter schools.
2)Prohibiting renewal of a charter if the charter school is in
federal PI year five.
3)Prohibiting renewal of a charter for more than three years if
the school is in federal PI.
4)Deleting the authorization for charter schools to be renewed
if the academic performance is equal to the academic
performance of the public schools that the charter school
students would otherwise have been required to attend.
5)Requiring charter school audits to be conducted by the same
quality auditors as for audits of other schools.
6)Encouraging charter schools to serve student populations that
are similar to local district student populations, the
school's local community, or the population identified in the
charter petition, especially relative to high-need students,
by requiring a charter authorizer to consider the degree to
which a charter school serves these student populations in the
charter renewal process.
7)Allowing charter authorizers to renew a charter school for
between one and five years.
8)Requiring a charter school operated as or by a for-profit
corporation to notify the Superintendent of Public Instruction
(SPI) of that fact in writing annually.
Charter Schools Serving High Need Students . This bill requires
charter authorizers to consider, as one aspect of a charter
renewal petition, the extent to which the school serves similar
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student populations as the local district, the school's local
community, or the population identified in the charter petition,
especially students with disabilities, students living in
poverty and English learners. This requirement is consistent
with the original Legislative intent to establish charter
schools to, among other things, increase learning opportunities
for all students, with special emphasis on expanded learning
experiences for students who are identified as academically low
achieving. The 2009 EdSource report on charter schools found
that charter high schools enroll 13% fewer students who are
either English learners or redesignated as fluent English
proficient (RFEP) students compared to noncharter schools;
charter middle schools enroll English learner and RFEP students
at a 7% lower rate than noncharter schools; and charter
elementary schools enroll 11% fewer English learner and RFEP
students compared with noncharter schools. Similarly, the
EdSource report found that charter schools serve lower
proportions of students with disabilities compared to noncharter
schools at all grade levels. The study also found that charter
schools serve fewer students that participate in the Free and
Reduced-Price Meal Program in both elementary and middle school
compared to noncharter schools, but slightly more students in
high school compared to noncharter schools.
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------------------------------------------------------------------ (Source: Charter Schools in California: 2009 Update on Issues
and Performance, EdSource)
A November 2009 report by The Civil Rights Project makes policy
recommendations with regard to segregation in charter schools.
They recommend that charter schools could "use many of the same
provisions that helped magnet schools use choice to increase
diversity. These include providing full and extensive
information, outreach to all racial/ethnic, socioeconomic and
linguistic groups, no admissions/attendance/parent involvement
requirements, and free transportation." They also recommend
that "tracking and publicly reporting basic information about
students should be a requirement for any school that receives
public funding. Charter schools should be evaluated to ensure
that they are enrolling, retaining, and graduating proportional
shares of students by race/ethnicity, ELL status, socioeconomic
status, and students with disabilities as their surrounding
districts. Schools could also be required to report the number
of students in different subgroups who apply to the charter
school compared to those who actually enroll, among schools that
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are over-subscribed. OCR could and should do this. The federal
government should also reinstate its former practice of
providing annual reports on the state of charter schools."
The committee should consider, with this data in mind, whether
chartering authorities should consider, as one factor in
determining whether to grant a renewal, the degree to which a
charter school serves student populations that are similar to
local district student populations, the school's local
community, or the population identified in the charter petition,
especially related to high-need students, including, but not
limited to, students with disabilities, students living in
poverty and English learners.
Academic Accountability . In creating charter schools, the
Legislature declared that the intent of charter schools was to
provide opportunities for teachers, parents, students and
community members to establish and maintain schools that operate
independently from the existing school district structure, as a
method to, among other things:
1)Improve student learning.
2)Increase learning opportunities for all students, with special
emphasis on expanded learning experiences for students who are
identified as academically low achieving.
3)Hold the schools established under this part accountable for
meeting measurable student outcomes, and provide the schools
with a method to change from rule-based to performance-based
accountability systems.
4)Provide vigorous competition within the public school system
to stimulate continual improvements in all public schools.
With Legislative intent in mind, AB 440 establishes academic
accountability standards that will ensure that charter schools
are providing opportunities for improved student learning. If
charter schools are not demonstrating improved student learning,
AB 440 will establish a system to close those low-performing
charter schools. This bill will prohibit renewal of a charter
if the school is in federal PI year five and prohibit renewal of
a charter for more than three years if the school is in federal
PI. This bill will allow a charter authorizer to consider track
record, if any, a charter school petitioner has made at other
charter schools they operate as part of the authorization
process of new charter schools. The bill will further delete
the authorization for charter schools to be renewed if the
academic performance is equal to the academic performance of the
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public schools that the charter school students would otherwise
have been required to attend. These conditions for renewal will
ensure that high quality charter schools will continue to thrive
and low achieving charter schools will close.
The June 2009 Center for Research on Education Outcomes (CREDO)
report, "reveals that a decent fraction of charter schools, 17
percent, provide superior education opportunities for their
students. Nearly half of the charter schools nationwide have
results that are no different from the local public school
options and over a third, 37 percent, deliver learning results
that are significantly worse than their student would have
realized had they remained in traditional public schools. These
findings underlie the parallel findings of significant
statebystate differences in charter school performance and in
the national aggregate performance of charter schools. The
policy challenge is how to deal constructively with varying
levels of performance today and into the future."
Fiscal Accountability . This bill requires charter schools to
complete annual independent audits using a charter school
supplement to the audit guide and requires the same high quality
auditors to complete charter school audits that complete school
district audits. Existing law requires charter schools to have
annual audits, but does not provide a charter school supplement
to the audit guide and does not require charter schools to hire
qualified auditors approved by the Controller.
For-Profit Corporations . This bill would require a charter
school operated as or by a for-profit corporation to notify the
Superintendent of Public Instruction (SPI) of that fact in
writing annually. This will bring further transparency to
charter schools operated as for-profit corporations. Further,
by making parents of students at these charter schools aware of
the school's for-profit status, this will ensure that state
taxpayer dollars spent in charter schools to educate public
school children are accurately accounted for and utilized to
support student instruction.
Renewal Timeline . This bill allows a charter authorizer to
grant a charter renewal for between one and five years.
Existing law requires that charter renewals be granted for five
years. By giving authorizers more flexibility to grant renewals
for between one and five years, authorizers will be able to more
closely monitor charter schools that are struggling. For
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example, if a charter authorizer has reservations about renewing
a charter school for fiscal mismanagement, the authorizer would
have the flexibility to renew the charter school for a shorter
period of time enabling the authorizer to examine the schools
fiscal stability earlier than the current five year renewal
model. According to the Los Angeles County Office of Education,
permitting initial charter renewals for less than five years
would increase the likelihood of renewals by original
authorizers and appeal bodies. Requiring a five year renewal
may not be prudent when there is question as to the soundness of
a charter school's fiscal, educational, or management/governance
status. A shorter renewal length allows the charter to continue
while the authorizer monitors. This is particularly pertinent
when the term of the original charter was less than five years.
Previous legislation : AB 1950 (Brownley) from 2010, which was
held by the author in the Senate Education Committee,
established academic and fiscal accountability standards related
to charter schools and was substantially similar to this
measure.
AB 8 X5 (Brownley) from 2009 proposed comprehensive changes to
the Education Code consistent with the federal Race to the Top
(RTTT) program; this bill addressed the four RTTT policy reform
areas of standards and assessments, data systems to support
instruction, great teachers and leaders and turning around the
lowest-achieving schools. Deleted the statewide charter school
cap; proposed enhanced charter school fiscal and academic
accountability standards. This bill was held in the Senate
Education Committee at the request of the author.
AB 3 X5 (Torlakson) from 2009 deleted the statewide charter
school cap and proposed changes to the measurable student
outcomes, renewal and revocation procedures for charter schools.
This bill was introduced but was not referred to a committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California School Employees Association
Public Advocates
Opposition
AB 440
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California Charter Schools Association
Analysis Prepared by : Chelsea Kelley / ED. / (916) 319-2087