Serious Questions Raised About Charter Management Organization Contracted by the City of Milwaukee

Following is a 2-part article from Terry Falk’s blog, Yellow Bus, published in MilwaukeeMag.com.

Questionable Quality at American Quality Schools
AQS in Indiana Highlight Problems for this School Provider BY Terrence Falk 11/21/2012

Recently Milwaukee’s Mayor and Common Council approved a charter elementary school for next year run by American Quality Schools. In addition, AQS also came to Milwaukee Public Schools with a proposal to open a secondary school, but a school board committee looked deeper and decided not to advance the proposal. AQS will not contest the committee’s recommendation at the full school board meeting.

What tipped committee members to AQS problems was an article in Fort Wayne’s daily paper, The Journal Gazette.  The Dec. 13, 2011, article highlighted the AQS’s poor academic grades in Indiana. Financial audits brought out more problems.

Wrote reporter Karen Francisco: “A quick survey of AQS’s financial oversight is not reassuring. A March 2011 State Board of Accounts audit for East Chicago Urban Enterprise Academy shows a laundry list of accounting errors: overdrawn cash balances, fund transfers not approved by the school board, incorrect postings on loan payments, negative disbursements, official bonds not filed with the county recorder, incorrect reporting of enrollment, receipts not issued, and claims paid and checks issued prior to school board approval.” Other AQS schools had similar problems.

I asked MPS Chief Accountability Officer, Robert DelGingaro, to take a look. DelGingaro just didn’t stop at the audits; he made phone calls to Indiana state officials. It was an unflattering picture of AQS.

A Ball State University educational audit of Indiana’s charter schools showed that all of AQS’s secondary schools were receiving poorer grades from the state from one year to the next.

On Nov. 15, all this evidence was presented to a committee of the Milwaukee School Board. This committee turned down AQS. What the committee did not know was another bombshell was going off at AQS’s Thurgood Marshall Academy in Fort Wayne, Ind.

The Journal Gazette Nov. 13th headline was “Marshall academy chief quits.” After less than six months on the job, its principal, Nicole Chisley, quit the school. Although Marshall officials boasted in July that they would reach their goal of 225 students, Marshall opened with only 130 students.

This forced the Urban League, who actually holds the charter, to take out a $150,000 loan to keep the school afloat. But enrollment got worse, not better. Acting Principal Tameka Wilson admitted that the school was losing students, enrollment was now down to 100 students, and the school faced major discipline problems.

A Nov. 13th editorial by The Journal Gazette slammed Marshall Academy: “The city’s newest charter school missed all of its announced enrollment targets and already lost its first principal.” The paper blamed much of the schools failure on its inability to get community support. “A hearing on the charter application overwhelmingly drew opponents.”

Nor would the paper place the blame on its principal, Nicole Chisley, who was quickly hired by the public schools. “’People should reach their own conclusions concerning what Ms. Chisley’s departure says about Thurgood Marshall’s ability to retain quality teachers and administrators,’ said FWCS [Fort Wayne Community Schools] board President Mark GiaQuinta.”

The blame game is about to begin. The Urban League holds the charter, and if the school closes, this organization is likely to be stuck with tens of thousands of dollars in bills. AQS, who manages the school, will likely get its $88,000 in management fees and will probably blame the school’s failures on The Urban League.

The City of Milwaukee’s charter with AQS may produce an excellent school, but the city is taking a big risk. City officials must focus on improving roads, providing police protection, and picking up the garbage. I’m not sure they should determine who can teach our children.

Part II: The Shrinking of American Quality Schools
Did the City of Milwaukee Make a Mistake in Selecting AQS? BY Terrence Falk 11/28/2012

[In my previous posting, I outlined how the school charter provider, American Quality Schools, was having difficulty in Indiana. This is important because AQS has contracted with the City of Milwaukee to run a charter elementary school beginning next year. A school board committee of Milwaukee Public School did not advance a charter secondary school to be run by AQS. In this posting, I outline the difficulties AQS has faced in its hometown of Chicago.]

2011 was not a good year for the Chicago charter school provider, American Quality Schools.

In March of 2011, AQS elected not to renew its charter to run Austin Business Academy in the former Chicago Austin High School. AQS’s president, Michael Bakalis, concluded that his organization could not properly operate the academy without a financial loss, and that Chicago Public Schools did not fulfill promises such as providing the school with a new library. Bakalis also stated that the multiple-schools-in-one building at Austin was unworkable. AQS controlled only one floor of the building rather than overseeing the entire operation.

But critics of AQS pointed to a continual turnover of teachers and four principals in three years that plagued the operation at Business Academy. The school also promised to provide each student with an internship to work in area businesses, but the internships never materialized.

At the time, Bakalis said that AQS had no plans to open another high school in Chicago and instead would concentrate on running its existing Chicago elementary schools.

But on May 23, 2011, the Chicago International Charter School announced that it was transferring five elementary charter schools from AQS to two other providers. AQS lost out in the bidding process to Distinctive Schools and Victory Partners.

Some of AQS’s schools, such as Bucktown, were highly rated, so AQS was not generally seen as a failed charter provider. But some schools, like Washington Park, were clearly a problem.  “I will be candid with you, it [Washington Park] was one of our underperforming [schools],” said Beth Purvis, executive director of CICS. “After 11 years, we thought it was good to bring in some new ideas.”

Today AQS operates only Passages Charter and Plato Learning Academy in Chicago. It operates one school in St. Louis and eight schools in Indiana.

Discovering the problems for AQS in both Chicago and Indiana took some time, but all the information I found was available at Internet sites of daily newspapers and governmental agencies. A few phone calls helped. Other MPS board and staff members were able to uncover this information as well. It is questionable whether anyone from Milwaukee city government did the same in awarding their own charter to AQS.

Chartering of schools is beginning to change. Just a few years ago, chartering bodies like MPS or the city spent the majority of its time examining the charter applications. We looked at the providers’ finances, educational plans, and personal resumes. But more providers are coming before chartering bodies with a track record. That requires that we look at their performance in other communities.

Chartering providers are quick to highlight their successes if they have positive track records. Providers with poor track records will say little about what they have done elsewhere, and these failing providers are easy to spot. What is more difficult is identifying providers with spotty records: some excellent schools as well as major disasters. Such providers are likely to cherry pick their own data – AQS is clearly one of those providers.

We must retool our chartering measurements to investigate chartering providers to see what they have done in other communities.