Minnesota charter school loses $1.3 million in state funding over inflated enrollment (2024)

Twin Cities

The Minnesota Supreme Court upheld the decision to pull funding from the Minnesota Internship Center; a school leader said administrators involved in falsifying records are gone.

By Jeffrey Meitrodt

Star Tribune

August 11, 2024 at 2:00PM

Minnesota charter school loses $1.3 million in state funding over inflated enrollment (1)

The Minnesota State Supreme Court is shown, Jan. 10, 2020, in St. Paul. (Jim Mone/Associated Press)

A charter school with campuses in Minneapolis and St. Paul lost $1.3 million in state funding after the Minnesota Department of Education investigated allegations that the school deliberately inflated its attendance figures.

The sanction against the Minnesota Internship Center was disclosed in a recent filing by the Minnesota Supreme Court, which upheld the department’s actions after the school appealed.

Education Department officials declined to provide records involving the case, but the Supreme Court filing shows that the investigation found in 2021 that the high school improperly received reimbursement for 137 students who were not actually attending the Minnesota Internship Center.

School officials “acknowledged that its previous administration had fabricated student attendance records in prior years, but claimed to have made all necessary corrections for the 2018-19 school year,” according to court records.

Tracy Eberlein, school principal and board chair, said none of the administrators involved in falsifying records continues to work at the school. The school’s executive director is one of the few holdovers and he was working as assistant director at the time, she said.

“We had a big staff turnover,” Eberlein said. “The people who weren’t doing their jobs were let go or quit on their own.”

Enrollment fraud has been a significant and growing problem among charter schools in the U.S. In the past five years, charter school leaders have been criminally charged with stealing more than $300 million in taxpayer funds by falsifying attendance figures, according to a review of cases in California, Indiana, Missouri, Oklahoma and North Carolina.

In Ohio, concerns over irregular enrollment practices by the state’s 381 charter schools prompted the state auditor to conduct a random review of 30 charter schools in 2015. The auditor found half of those schools significantly overstated enrollment, which helped spark major reforms of Ohio’s charter school system later that year.

In Minnesota, some charter school leaders have acknowledged that they initially received more funding than their schools deserved because some students switched schools after leaders submitted their initial enrollment reports to the state. Those reports are used to calculate the amount of funding those schools are able to collect.

However, state officials routinely withhold a percentage of a school’s funding until the end of the school year in order to take enrollment changes into account.

Attendance ‘reporting inaccuracies’

At the Minnesota Internship Center, a former employee told state officials that many of the high school’s problems were centered in its special education program, which accounts for 20% of the school’s 353 students.

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“There was little to no direct instruction taking place,” the former teacher told state officials, according to a summary of the Education Department’s investigation. “Most special education classes were being run as a study hall and students would work on their regular education classwork, sleep or just hang out in the room.”

State regulators documented multiple violations of special education rules by the Minnesota Internship Center and ordered the school to make changes in the way it operated, according to the 2019 report.

State records show just 2% of the students at the Minnesota Internship Center regularly attend school, well below the state average of nearly 70% and one of the lowest attendance rates in the state. It also has one of the lowest graduation rates, with about 5% of seniors receiving their diplomas in 2023, down from 21% in 2019.

So few students have taken standardized tests that proficiency rates have not been publicly posted since 2019, when less than 4% of students were at grade level in math and about 14% were proficient in reading. No students were at grade level in science that year, state records show.

About 20% of the students are homeless, according to state records.

“We intentionally recruit students who have been pushed out of other schools, who have not been in school for years on end,” Eberlein said. “We give them a place to come that is going to meet their needs.”

After the Education Department found widespread reporting inaccuracies in attendance, the department withheld $868,793 in general education funding and another $487,753 in compensatory funds for meals, records show. The school also was put on probation by its authorizer, Pillsbury United Communities, Eberlein said.

“As far as I am aware we are not on probation anymore,” Eberlein said. “We have corrected all of the things that were in the complaint.”

More investigation needed?

Though other states have conducted far-reaching investigations of charter school funding after finding evidence of enrollment fraud, officials with the State Auditor’s Office and the Office of the Legislative Auditor said the Education Department has not asked them to find out whether other schools have inflated attendance figures in Minnesota.

“We would do that because we try to be good stewards of taxpayer money,” said Donald McFarland, spokesman for State Auditor Julie Blaha. “But we don’t have any information about any of this... That’s a great question for MDE (Minnesota Department of Education) and the new office that they have.”

McFarland was referring to the Minnesota Department of Education’s new inspector general, an office that was created in 2023 after the department was criticized for not taking stronger action to root out fraud related to the $250 million Feeding Our Future case. The new office was created by the Legislature and will conduct independent investigations of fraud, waste and abuse.

Education officials did not respond to questions on whether they are reviewing other schools to see if there are larger problems involving falsified attendance.

Staff writer Jeff Day contributed to this report.

Minnesota charter school loses $1.3 million in state funding over inflated enrollment (2024)

FAQs

Minnesota charter school loses $1.3 million in state funding over inflated enrollment? ›

Minnesota charter schools lose $1.3 million in funding due to false attendance. The complaint filed said that employees were directed not to withdraw inactive students, despite being required to after 15 consecutive days of absence.

How are charter schools funded in Minnesota? ›

Charter schools are funded by the State of Minnesota on a per-pupil basis. They also receive state support for facilities expenses because they cannot issue bonds or raise taxes through levies like other school districts.

What is the Minnesota charter school law 1991? ›

The law was first enacted in 1991 to promote innovative educational programs and give teachers and parents the responsibility for managing and operating public schools. A charter school is a public school organized by teachers or parents.

Which state has the highest number of charter schools? ›

California was home to 1,234 charter schools, 18 percent of the nationwide total and more than any other state.

What will be different about how the charter school is funded? ›

Charter schools receive most of their funding from states, although the federal government does offer some grant funding. In California, like other public schools, charter schools receive state and local tax dollars based on the number of pupils in attendance in each grade level.

What is the difference between a charter school and a public school in Minnesota? ›

 Charter schools have specific program focuses such as language immersion, project‐based learning, environmental education, arts education, expeditionary learning, online learning, etc.  Charter schools are normally smaller in size than traditional public schools and usually have smaller class sizes.

What schools are least funded in Minnesota? ›

But 63 districts, representing 17.4% of Minnesota students have below adequate funding. The least adequately funded districts in Minnesota include both Minneapolis Public Schools and St. Paul Public Schools, which is consistent with national patterns of below adequate funding in large, diverse, urban school districts.

What is a primary criticism of charter schools? ›

The most common arguments about charter schools are that: Charters steal kids and money from traditional public ISDs. Charters are selective and operate like private schools. Public charter schools don't enroll students from historically underserved families.

What is the oldest charter school in Minnesota? ›

Minnesota is the "Birthplace" of chartered public schools.

The first charter was issued in late 1991 to Bluffview Montessori School in Winona, while the first charter school to open its doors was City Academy in St. Paul.

Are charter schools in MN free? ›

In Minnesota, charter schools are tuition-free and are governed by Minnesota Statutes 2023, Chapter 124E.

Are charter schools detrimental to public education in the United States? ›

Studies have demonstrated that charter schools can worsen existing disparities and draw resources away from public schools. A study by the Network for Public Education found that charter schools cost school districts over $400 million in funding each year, resulting in reduced resources for public schools.

Which city has the most charter schools? ›

Los Angeles

What percent of American students go to charter schools? ›

The popularity of charter schools has grown.

In the last 10 years alone, enrollment has risen from about 2.1 million students in fall 2011 to nearly 3.7 million in fall 2021, an increase from 4% to 7% of total enrollment.

What does it mean when a charter school is directly funded? ›

Locally funded schools receive funding through their authorizing district or county office. Districts sometimes refer to these schools as dependent charter schools. Direct Funded. Directly funded schools receive funding directly from the state. Districts sometimes refer to these schools as independent charter schools.

How do charter schools in the USA make money? ›

Charter schools are public schools. Like district public schools, they are funded according to enrollment (also called average daily attendance, or ADA), and receive funding from the district and the state according to the number of students attending.

Who funds charter schools in the USA? ›

Charter schools in the United States are primary or secondary education institutions which receive government funding but operate with a degree of autonomy or independence from local public school districts.

How are schools funded in Minnesota? ›

comm. Tim Strom, Minnesota House Research Department, Minnesota House of Representatives, email, July 30, 2021. School districts in Minnesota receive local revenue from property taxes and from certain county taxes and fees. School districts in Minnesota may impose only property taxes.

Who funds charter schools in the US? ›

Charter schools are public schools. Like district public schools, they are funded according to enrollment (also called average daily attendance, or ADA), and receive funding from the district and the state according to the number of students attending.

What are the revenue streams for charter schools? ›

For most charter schools, the largest source of revenue is the LCFF, which are unrestricted funds received through a combination of in-lieu of property taxes and state funds. State funds to charter schools are paid through the Principal Apportionment and Education Protection Account.

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