I am chair of the Georgia Charter Educational Foundation, the nonprofit board which holds the charter for Cherokee Charter Academy. I want to respond to John Konop’s Sept. 14 letter and subsequent comments.
To Konop’s first point:
Any “start-up” capitol being discussed would be the Federal Implementation Grant which goes to all start up schools and was actually $620,819 (not over a million). The funds were used to pay for things like desks and books.
A GCEF board member sat with the Georgia Department of Education official and the principal of CCA to review the use of that grant at the end of last year. The expenditures were reviewed line by line.
As a State Chartered Special School CCA receives no money from the district. The GADOE is the authorizer to which CCA (and all state charter schools) are under a performance contract.
Konop clearly lacks the facts and understanding of the authorization and accountability process.
As to his second point:
CSUSA receives a payment for services delivered — that is called a management fee. This fiscal year that fee is budgeted to be $891,848 equating to approximately 11 percent of budgeted revenue.
The national average for Educational Management Organizations (EMO) varies but a typical rate is between 10-15 percent. Some EMOs charge more (17-20 percent) and some less (5-7 percent.)
Many large EMOs try (and succeed) to do what is called a “sweep agreement” which means they take all revenue that remains after the school’s annual expenditures are complete (including their management fee).
Some companies request all revenues as a gross management fee but promise to reserve 2 percent of the state revenue for the school.
CSUSA, one of two educational management companies with schools in Cherokee County is one of the few that will only charge their management fee after all expenditures are covered and will donate to the school if it cannot be made whole with the revenue the school generates.
Last year in Cherokee County not only did Charter Schools USA not take a fee, they donated over a million dollars to ensure Cherokee Charter Academy was financially whole at the end of the year.
This was due to the uncertainty of particular funding streams for state chartered special schools; however, CSUSA was aware the school was going to be in a deficit situation and made the decision they would rather take the financial hit themselves than impact what was happening in the classroom.
Only in the world of Georgia politics does a company investing millions in Georgia public schools get accused of taking millions out!!
As to Konop’s final point:
The final point is ridiculous but for argument’s sake let us indulge him for a moment.
First and foremost it would be illegal for them to ‘take the money and run’ which is Konop’s implication.
There is a management contract in place outlining appropriate “separation” process and procedure in the event either party decides to walk away — if there would ever be a separation, it would never happen mid-year as it would breach the management contract.
CSUSA is a national operator working with many boards like GCEF as well as local school districts in turnaround situations — something illegal like “taking the money and running” would kill its business.
CSUSA manages over $300 million in revenue annually so why would they risk reputation and legal ramifications for the funding Konop calls into question?
Since Konop has a) never spoken to any member of the GCEF board, our principal or EMO, b) never attended one or our meetings, or c) never requested a budget or any information on our school his source for “knowledgeable information” should be called into question.
One might assume hearsay which is supported by the fact he went to one of CCA’s parents for his information rather than to an official with the school — much the same way the media did when they were covering this story.