D.C. withholds payment to city charter schools

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The Washington Examiner

D.C. withholds payment to city charter schools

By: Michael Neibauer and Leah Fabel
Washington Examiner
July 16, 2009

District officials failed to deliver to the city's charter schools an expected $103 million payment Wednesday, causing some teachers to wake up without a paycheck.

"This is part of an ongoing outrage characterized by indifference to the reality of trying to run a charter school for D.C. public school children," said Robert Cane, executive director of advocacy group Friends of Choice in Public Schools. Cane's group, along with the schools, learned about the funding shortfall Tuesday evening, one day before the dollars were supposed to be in the bank.

Charter schools operate independently and are often small, penny-pinching organizations.

"Many of them are essentially at the end of their fiscal year and running on fumes already," Cane said.

The District's public charter schools are supposed to receive quarterly payments from the city for operations and to meet payroll. But the two agencies' books aren't in sync: Unlike the D.C. government, which operates on an Oct. 1-to-Sept. 30 fiscal year, the charters run on a July 1-to-June 30 fiscal year. On July 15, charter schools expect 25 percent of their annual budget.

That creates an annual conundrum for the District, city leaders say, as the charters expect their first payment of the year when the District is scraping for funds to close out theirs. Flush with revenue in recent years, the city has had no problem in midsummer finding an extra $50 million or $100 million for the charters.

But the District today is cash-strapped. It faces a $340 million deficit over the next two fiscal years, a shortfall that D.C. leaders hope to close before August.

D.C. Chief Financial Officer Natwar Gandhi, with the OK of Mayor Adrian Fenty, is expected to wire the charters $57 million from the city's contingency reserves "within days," one city official said.

If it arrives, it will serve as a partial payment to fill the gap until the District's fiscal 2010 budget is approved by Congress. At that point, the remaining dollars will be available through the general fund.

Rick Offner, chief executive officer of SAIL Public Charter School in Northwest D.C., was forced to delay paychecks for his teachers when an expected payment of more than $700,000 didn't come through.

"Someone didn't consider the consequences of this," Offner said. "It seems that someone must have known this was going to occur. They could've been tapping the reserve funds a week ago."

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