Charter schools run up $1.3 million deficit
By Jennifer Hiller
Advertiser Education Writer
At least five charter schools — and possibly as many as 10 — will end this fiscal year with deficits, according to data from the Department of Education.
DOE estimates show that 10 of the state's 22 operating charter schools overspent by a total of $1.3 million at the end of the 2002 fiscal year, which ended June 30.
"We have too many schools in the minus categories," said school board member Donna Ikeda, chair of the charter schools committee.
But some charter school advocates say the DOE's accounting methods are unfair, charging schools for July and August payroll that should instead appear on the 2002-03 budgets, and penalizing schools for the cost of substitute teachers.
Donna Estomago, principal at Lanikai School, said that while the DOE shows her school has a $335,000 deficit, an independent audit shows the school will have a surplus this year.
Lanikai's deficit comes from the $63,734 cost of hiring a permanent substitute and paying the regular teacher who was on sick leave for the entire school year. It also comes from personnel costs for July and August. Estomago said the school has not yet received money from the state for the July and August payrolls , which should appear on the 2002-03 budget.
"If you're going to precharge us, you've got to prepay us," Estomago said.
Board of Education member Shannon Ajifu said that even if the district doesn't count the cost of substitute teachers and the summer payroll against schools, five charters will still owe the state a combined $89,000.
Board members called the year-end figures an alarming trend. "Something is wrong someplace," said board member Meyer Ueoka. "I think it's a red flag."
While the board has complained loudly about the spending patterns of the charter schools, the schools repeatedly have said they do not receive their money on time from the state and are forced to deficit spend.
Charter schools, authorized by the Legislature in 1999, use public money and are part of the Department of Education, but operate largely independent of local school bureaucracies. Advocates say this makes them more efficient, more responsive to parents and more creative in their curriculum.
Among the schools facing a deficit is Waters of Life, the Big Island charter school that has come to represent the state's contentious relationship with the reform movement.
While the school has agreed to pay back its $171,000 deficit from last year, the DOE estimates the school this year will have an additional $271,000 deficit.
Waters of Life avoided closure by the state in February when Judge Riki May Amano sided with the school and said that education officials mishandled the charter school program. She also said that state law entitles the schools to a two-year period to fix any problems once they are noted.
Other schools with a projected deficit are: Connections, Hakipu'u Learning Center, Halau Lokahi, Innovation, Kanu O Ka 'Aina, Volcano School of Arts and Science, Voyager and the West Hawai'i Exploration Academy.
The deficits range from $758 to more than $100,000.
Waters of Life is the only school with a two-year-old deficit.
The DOE is drafting a policy that will outline how charters receive their money, give the state a copy of their operating budget and pay back the DOE if a deficit occurs.
Reach Jennifer Hiller at jhiller@honoluluadvertiser.com or 525-8084.
