Charlotte Observer
9:35 am
Thu March 20, 2014

Can NC Charter School Pay Stay Secret?

StudentFirst Academy, a charter school that opened in west Charlotte, has faced questions over pay. The former top administrators were paid more than the initial budget included.
StudentFirst Academy, a charter school that opened in west Charlotte, has faced questions over pay. The former top administrators were paid more than the initial budget included.
Credit David T. Foster, III / Charlotte Observer

North Carolina charter schools don’t have to disclose employee salaries like other public schools do, even though they receive hundreds of millions of dollars in public money, state education officials said this week.

But a lawyer for the General Assembly says charter schools are required to reveal what employees earn. In fact, they have less legal privacy than school districts, said special counsel Gerry Cohen.

“On its face all their personnel records would be public unless they show an applicable statute that says the record is not public,” said Cohen, who spent three decades in charge of drafting legislation. Lawyers for the N.C. Press Association and Charlotte-Mecklenburg Schools agree.

The debate comes as public investment in charter schools and the number of children relying on them is swelling. This year the state is spending $304.5 million for 127 charter schools that serve about 58,700 students, with counties required to kick in millions more. Twenty-six more charter schools will open in August.

With the growth comes new public scrutiny. The Observer’s plan to request and post charter school salaries, as it has done with CMS for years, prompted officials with the N.C. Department of Public Instruction to consult with their legal staff.

“Charter staff are not employed by a public school board but by a private nonprofit board and, as a result, their salaries are not subject to public records law the way public school board employees’ or state employees’ salaries are,” said DPI spokeswoman Vanessa Jeter.

The legal wrangling highlights the complex nature of charter schools, which the state authorized in 1996. State law defines them as public schools operated by “a private nonprofit corporation,” which normally wouldn’t be subject to the same type of scrutiny as public bodies. But as a condition of receiving public education money, charter boards must agree to be subject to open meetings and public records laws.

The controversy comes from interpreting the personnel privacy section of the N.C. Public Records Law.

In 1987, before charter schools existed in North Carolina, lawmakers passed the personnel privacy act for employees of local school boards (there are similar provisions for employees of the state, cities and counties). The act defined as confidential many items in personnel files, including applications and performance evaluations. It also specified 22 personnel items that would remain open to the public, including names, positions and salaries.

Jeter said DPI concluded that because there’s nothing spelled out for employees of private charter-school boards, there’s no obligation to release salaries. It’s up to each charter board to decide whether to disclose that information, she said.

Cohen, N.C. Press Association lawyer Amanda Martin and CMS attorney George Battle III say she’s got it backward: There’s no legal protection for any information in the files.

“It’s the privacy act. It’s not the publicity act,” Cohen said. “If they’re subject to the public records law, then nothing is private.”

State Sen. Malcolm Graham, a Mecklenburg Democrat who serves on the Senate Education Committee, said the legislature should clarify what he and many others assumed was already the case: Charter schools and districts should have the same obligation to report how they’re spending public money.

“We need to be sure the charter schools are playing by the same rules as everybody else,” he said.

Growth brings attention

For about 15 years, North Carolina limited the number of charter schools to 100. The General Assembly lifted the cap in 2010. The current school year brought the first surge of new schools, with 23 opening in August.

For years, the Observer, The (Raleigh) News & Observer and other news media have published and analyzed salaries from local school districts and other public bodies. This year the Observer decided to add charter schools to the database and contacted DPI and its Office of Charter Schools, anticipating that schools might call the state with questions about the public records request.

Some people active in education and government said they had always assumed that charter schools had to disclose the same salary information that school districts do.

“It sounds like an oversight – a failure to account in our public records law for charter schools’ odd public-private hybrid,” said Julie Kowal, executive director of the N.C. Campaign for Achievement Now, a group that advocates for school choice and accountability.

“This is simply a glitch in the public records law that legislators need to fix in the upcoming legislative session,” said Terry Stoops, education policy director for the conservative John Locke Foundation.

But leaders of the state’s two charter school associations, Eddie Goodall and Baker Mitchell, said charter schools’ spending gets adequate oversight through required audits and monitoring by the state Office of Charter Schools.

Goodall, a Union County Republican who served in the state Senate from 2005 to 2010, says he never heard any discussion of exempting charters from salary disclosure and wasn’t aware of the issue until the Observer asked him this week. “It’s really surprising the subject is just now coming up,” said Goodall, who founded a charter school and heads the N.C. Public Charter Schools Association.

But Goodall speculated that legislators may have intended to keep salaries within “the domain of the schools’ board of directors” as part of the personnel flexibility granted to the schools.

Why it matters

Goodall and other charter school advocates often say the flexibility provided to charter schools can provide lessons that help improve all public schools.

Charter schools have more leeway in teacher hiring and pay. Statewide, educators and policymakers are trying to hash out a better pay system than the scale used for traditional public schools.

“District schools cannot replicate compensation models that remain hidden,” Stoops said. “I think all public schools, charter and district alike, owe it to taxpayers to be as transparent as possible.”

But Goodall said charters don’t need to disclose individual salaries to share what they’ve learned. A school district could contact a successful charter to ask how it has structured pay, he said.

Disclosure of charter school salaries would reveal how the top-paid administrators at those schools stack up. In some cases, nonprofit charter boards sign contracts with for-profit corporations to run the school. In others, founders who recruited the nonprofit board shift into roles as paid administrators, sometimes while retaining board positions.

At StudentFirst Academy, a charter that opened in west Charlotte in August, two founding board members who became the head and deputy head of school were working for salaries far beyond what was budgeted when the board applied for a charter. The board chairman said he signed the top administrator’s contract for $90,000 a year – compared with $65,000 in the initial budget – without noticing the raise. The deputy’s pay was bumped from the $55,000 budgeted to $84,000 a year.

That situation came to light when the state Office of Charter Schools demanded answers to complaints about management, financial and academic problems at StudentFirst. The Observer learned of the salary increases through court documents filed after the two administrators, who were fired and removed from the charter board in December, sued the remaining board members.

Goodall said that situation shows that state officials are keeping an eye on excessive salaries.

Baker Mitchell, board chair of the Raleigh-based N.C. Alliance for Public Charter Schools and a member of the N.C. Charter School Advisory Board, noted that charter schools must undergo annual audits that include aggregate spending for salaries in various categories, including principal and assistant principal. Those audits, which do not list individual salaries, are public record.

Each school’s choice?

Some who support disclosure say the state’s opinion that it is optional complicates the picture.

Frank Martin, chairman of the board of Charlotte’s Sugar Creek Charter School, said he always assumed the school would provide salaries if asked.

“We’re using the public’s money, and it’s reasonable that we ought to disclose it,” he said.

After hearing from the Observer that the state said it was up to each charter board, he talked to longtime director Cheryl Turner, a member of the N.C. Charter School Advisory Board. Martin said Turner told him it was one thing to comply with a legal mandate, but it was more difficult to reveal salaries for herself and her staff if others opt not to.

The role of charters in the public education scene is especially intense in the Charlotte region, where the recent expansion has been concentrated.

This year about 10,800 Mecklenburg students attend charter schools, requiring CMS to pass along about $25 

million in county money. Next year the district projects a net increase of almost 2,300 charter students, requiring an additional $7.5 million in county money.

Superintendent Heath Morrison says he supports high-quality charter schools but worries that North Carolina is expanding them too quickly. He and Battle both say charter schools should face the same salary scrutiny as CMS.

“They’re public schools,” Battle said. “They’re funded with public money, regardless of who’s on their board.”