Charter schools' funding would hinge on state board's financial review under new policy

North Carolina charter schools would have to demonstrate compliance with finance laws to the State Board of Education in order to receive state funding under a new policy approved Thursday.

The board already has the statutory responsibility to disburse funds to the schools. The new policy requires a new Charter School Review Board to submit all of its approved charter school applications for opening or renewal, including funding details, and all of its approved material changes to a school’s charter that could change funding amounts.

Under the new policy, the State Board of Education would review all of those documents before disbursing funds to the schools, to ensure plans are complaint with state and federal funding regulations. The policy doesn't state that the board would withhold funding for any reason or include a list of reasons funding would be withheld. Board Chairman Eric Davis said the board must ensure public funds are properly spent and would disburse funds based on an interpretation of whether they complied with law.

He cited prior cases at charter schools of improper accounting, including instances in which schools reported having more students than they had.

“We take our responsibility seriously,” Davis said.

The board approved the policy 8-3, after objections from board members that the policy was premature and lacked clarity.

Those in favor of the policy argued the board needed to implement a policy as soon as possible because the new Charter School Review Board is scheduled to begin reviewing applications for charter schools next week.

State Superintendent Catherine Truitt, a non-voting member of the board, said the State Board of Education can’t even disburse funds to charter schools until after applications are approved and then schools obtain certificates of occupancy, so funding of the schools would not be required by next week.

“There is indeed no rush to pass this policy through,” Truitt said. She also noted it’s not clear whether the policy still needs to go through a formal rule-making process, which includes multiple meetings and public comment, because the policy affects non-school entities, as well.

The board’s Democratic-appointed members favor the policy, while its Republican-appointed and Republican-elected members argue it’s vague and could give the board too much authority over charter school funding. It’s the latest battle over power over North Carolina public education, after various new state laws shifted authority from governor-appointed boards to legislator-appointed boards.

A law enacted last month, House Bill 618, strips the State Board of Education of its ability to approve charter school applications. Previously, the state board rarely denied applications. The new Charter School Review Board, however, now has authority over applications, under the new law.

That board is comprised mostly of legislative appointees. The State Board of Education is comprised mostly of governor appointees.

Voting in favor of the policy were Davis and Board Members Jill Camnitz, Reginald Kenan, Wendell Hall, Donna Tipton-Rogers, John Blackburn, James Ford and Alan Duncan.

Voting against it were Board Members Olivia Oxendine, State Treasurer Dale Folwell and Lt. Gov. Mark Robinson.

Robinson’s wife, Yolanda Hill, sits on the board of a Union County charter school whose application has previously been denied by the State Board of Education, American Leadership Academy Monroe. The board had denied the application because of concerns about its operator, Charter One.

Two state senators who were the new law’s primary sponsors told WCNC they wanted to pass the law to help get the Union County school approved.

WRAL News has reached out to school leaders for comment but has not heard back yet.

WRAL Capital Bureau Chief Laura Leslie contributed to this report.