Regulators make it easy for Minnesota's failing charter schools to stay open

Five years after SciTech Academy opened in Richfield, the charter school was failing on almost every level.

SciTech's test scores were among the lowest in the state. The school's finances were a mess. And school leaders were ignoring advice on how to fix the situation, according to a 2023 contract review by the school's nonprofit regulator, the Minnesota Guild of Public Charter Schools.

The review, which documented nearly three dozen contract violations, could have led to the closure of SciTech Academy last year. At most, by flunking all of its primary performance measures, SciTech should have received no more than a one-year contract extension, according to a subsequent analysis by the Minnesota Department of Education (MDE). Instead, the guild gave SciTech a three-year contract, typically reserved for schools that meet most of their goals.

Such leniency is common in Minnesota, where state leaders largely outsourced the job of regulating charter schools to 10 nonprofits, whose public funding is dependent on how many schools they oversee as so-called "authorizers."

The flawed reviews are part of broader oversight problems with Minnesota's charter schools, which were created to produce better educational outcomes for children. But most are failing to deliver on that promise. A 2024 Minnesota Star Tribune investigation revealed that just 13 of 203 charters have consistently exceeded the state average in math and reading proficiency since 2016, when regulators began implementing a new accountability system.

According to a new Star Tribune review of more than 200 evaluations covering 80 charter schools, authorizers routinely overlooked academic failures and other problems in order to extend the lives of schools that collectively pay them millions of dollars in fees each year for regulatory services. The 10 nonprofits, which oversee all but three of Minnesota's 173 charter schools, perform these evaluations each time a charter school's contract is up for renewal, usually a period of three to five years.

In three out of four reviews, schools failed at least one important academic goal, often by large margins. Many of those schools also demonstrated significant weaknesses in financial management, board governance or operations, records show.

When schools failed to meet their contractual goals, some of the nonprofits simply lowered their requirements to a more "realistic" level by taking such steps as reducing the amount of annual growth expected on test scores or the size of a school's financial cushion, the records show.

Moreover, each authorizer uses different criteria to measure performance, making it difficult for state officials to compare their work. Some base all or most of their evaluation on a school's test scores and other academic achievements. Others consider test scores to be a minor part of the overall academic picture, allowing low-performing schools to earn points by taking kids on field trips, doing well on parent and teacher surveys and avoiding legal compliance issues.

The state Education Department, which checks each contract renewal for compliance with state law, finds problems with 80% of the renewals, records show. The most frequent complaint is with the reviews themselves. In some cases, MDE noted that authorizers gave schools credit for meeting goals they actually missed. At least 19 schools obtained longer contracts than their performance warranted, MDE records show.

Though MDE has the power to sanction authorizers for "unsatisfactory performance," it has never done so.

MDE officials declined to address the Star Tribune's findings or make an official available for an interview. In an emailed response to questions, the department provided a brief summary of Minnesota's groundbreaking charter school law, adding that the department is "always seeking ways to continuously improve ... students' access to high quality education."

The Star Tribune has yet to receive evaluations covering all charter schools that were open at the start of 2024. The newspaper first requested the documents in February, when it began an investigation of Minnesota's troubled charter school sector. MDE did not begin turning over the records until October, shortly after the newspaper's attorneys threatened to sue the department for its "constructive denial" of the request.

Widespread charter school failures

The Star Tribune published a three-part series detailing oversight problems and widespread failures among Minnesota's charter schools in September. So far this year, nine of the 181 charters schools operating at the beginning of 2024 have closed, the most since the first charter school failure in 1996, state records show.

Some educational experts say the newspaper's findings raise serious questions about the way charter schools are regulated in Minnesota, noting authorizers lose money every time they decide to exercise their power and close a failing school.

"It's a total conflict of interest," said University of Minnesota professor Myron Orfield, an early supporter-turned-critic who has been researching charter schools since 2008. "It's a crummy system."

At least two authorizers have been accused of violating conflict of interest rules by the schools they oversee, according to state complaint files recently provided to the Star Tribune by MDE. Those allegations were investigated by the department, which found evidence to support some of the claims.

Nonprofit leaders defended their work, saying their decisions to extend contracts has nothing to do with the fees they receive from charter schools and that they take steps to avoid any potential conflicts.

In the case of SciTech Academy, guild director James Zacchini said in an email that MDE accepted the nonprofit's explanation that "SciTech's academic performance couldn't be accurately assessed within a one-year conditional contract." Zacchini declined an interview request, as did the leaders of all but one of the other nonprofit authorizers.

A trade group that represents the state's authorizers acknowledged that "more work remains to ensure clarity and equity across the sector."

"We recognize that some may have concerns about the different criteria and processes used by authorizers to evaluate their charter schools," the Minnesota Association of Charter School Authorizers said in a response to written questions. "This variability is embedded in the statute that created authorizers."

In their written statements, several authorizers warned against standardization of the review process, saying that could harm their ability to capture the diverse missions and challenges faced by charter schools.

Joey Cienian, executive director of the MN Association of Charter Schools, echoed that concern, saying his group would oppose any move to "standardize authorizers." Cienian added: "One size does not fit all in education."

Lingering problems

Some charter schools were rewarded with contract renewals even though records show their leaders were unable to fix problems that lingered for years.

In St. Paul, Academia Cesar Chavez Charter School was first threatened with the loss of its charter in 2018 after its authorizer, the University of St. Thomas, became concerned about the school's "declining academic performance," records show. Since 2011, the school has seen its test scores collapse, with proficiency ratings declining from nearly 50% of all students to single digits.

More recently, St. Thomas expressed concern about the school's "financial viability," noting a 2022 audit raised questions about personal expenditures on a school credit card and the late payment of invoices. Despite the snowballing problems, St. Thomas handed the school a three-year contract in 2023, finding that the school is "competently governed."

In a written response to questions, St. Thomas officials said the renewal came after the school hired new leaders and elected a "stronger board" that dealt with the school's most pressing issues.

"The school remains on intervention and we are closely monitoring performance," the university said in the statement. "Implementation of major changes to the academic model will take time to appear in the school's data."

The problems extend even further back at LoveWorks Academy for Arts, a Minneapolis charter school that was forced to close this year after failing to address weaknesses that were first identified 16 years ago, records show.

In a 2008 evaluation, Pillsbury United Communities (PUC) documented a history of low academic achievement, dysfunctional management and a disengaged school board that often rubber-stamped "anything the director suggests."

Despite those problems, PUC concluded that LoveWorks was a "successful school" and awarded a three-year contract, the longest period then allowed under state law. PUC continued to praise the school in subsequent years whenever its performance fell short, records show. Each contract redefined academic success, usually by setting the bar lower, records show.

In 2020, when LoveWorks was below standard on 16 key performance measures, PUC put the school on probation but nevertheless awarded another three-year contract, finding that LoveWorks "is on their way to leverage the incredibly positive school culture ... to meet the high expectations set for the next contract term."

PUC didn't give up on the school until 2024, when just 1.3% of its students were proficient in math and 7.1% were reading at grade level — similar to the school's low test scores for the past 10 years. In August, PUC informed LoveWorks it was revoking its contract, citing a financial crisis brought on by poor board oversight and ineffective management. The letter also cited the school's "failure to meet the requirements for pupil performance."

Donald Allen, LoveWorks most recent executive director, said the school should have been shut down more than a decade ago. But he said PUC killed the school with kindness, lowering its standards instead of holding the board accountable for poor performance.

"There was always one consistent problem with this school, and it was the board," said Allen, who was let go in June after he complained that students were allowed to waste time coloring and watching YouTube videos instead of receiving regular instruction. "If we could have replaced that board, the school would be up and running and I'd still be there instead of working at Minneapolis Public Schools as an eighth-grade teacher."

PUC did not respond to requests for comment.

Possible solutions

Some charter school advocates say the problems at LoveWorks and other charter schools show that authorizers need more enforcement tools.

Authorizers are barred from replacing incompetent school board members because that would interfere with a school's autonomy, which is the cornerstone of Minnesota's charter school law.

That leaves authorizers with just one major weapon: their ability to revoke or not renew a school's contract. But as the reviews show, most authorizers are reluctant to wield that authority.

"I do think that authorizers need more tools in their toolbox so there are increasing consequences for schools that are not meeting expectations," said Jennifer Stern, chief executive of Great MN Schools, a Minneapolis nonprofit that invests in promising schools. "As it stands, authorizers are in a tough place. There is the concern that if they shut down a charter school, maybe there is no school left to effectively serve that community."

Beth Topoluk, the longtime director of Friends of Education, which oversees many of the state's top-performing charters, agreed that authorizers need more options to prompt change at underperforming schools.

"In some states, when a school is serving kids but other things are not working, the authorizer has the ability to change the board," Topoluk said. "That might have worked here. But we have had no other recourse."

In addition to replacing ineffectual board members, Stern and Topoluk said authorizers should be able to directly share their concerns with parents and other community members if a school is in trouble. Topoluk said such reports could galvanize support and lead to needed change at struggling schools.

Unlike contract evaluations, which can run to nearly 100 pages and are full of educational jargon, Topoluk said annual stakeholder reports could be a page or two, built around a standardized, easy-to-read scorecard that shows how a school is doing at meeting its goals.

"Perhaps it's time for some consistency or uniformity and readability," Topoluk said. "If we're going to have legislative action, let's get something that is effective and meaningful."

Key findings

Here are the key findings of the Minnesota Star Tribune's new review of more than 200 charter school evaluations:

Overlooking academic problems: About 75% of the contracts were renewed despite reviews showing charter schools failed key academic goals, often by large margins.

Lack of standardization: Each authorizer creates its own criteria for grading performance. A few authorizers set the bar high for academic achievement and penalize schools that fail to make the grade. Other authorizers set the bar low and overlook even extended periods of underachievement.

State oversight is minimal: The Minnesota Department of Education reviews each contract for compliance with state laws, and it found problems in 80% of the renewals. But MDE has never sanctioned an authorizer for poor oversight.

Inherent conflict of interest: In Minnesota and 13 other states, authorizers are paid fees for each charter school they oversee, which may create an "inappropriate incentive" to renew contracts for "low-quality charter schools," according to the National Association of Charter School Authorizers.