A loophole allows Minnesota charter schools to award $132 million in outside contracts without following state anti-corruption rules. Guess what happens?

In April 2019, the school board of Noble Academy voted to approve a lawn-care contract with an obscure company.

According to the terms of the contract, the Brooklyn Park charter school would pay Angel’s Lawn Care to trim shrubs twice a year; perform garden-box maintenance once per season; and weed grass areas as needed — all across two school campuses. The cost of this occasional seasonal yard work would come to $20,000 annually.

School-board minutes indicate that discussion of the issue was relatively brief. “It is important to maintain our schools in a good environment and condusive [sic] to learning,” the minutes read.

The school board does not appear to have discussed the fact that Angel’s Lawn Care was run by the 18-year-old daughter of Mai Yia Chang. At the time, Chang was Noble Academy’s deputy superintendent of academics; she’s now the superintendent.

Chang’s daughter’s qualifications as a lawn-care contractor were hard to gauge. It was only the day after the school-board vote that she registered her company with the state, using her home address — and Chang’s — as the business address.

The Minnesota Department of Education looked into the matter after a former Noble Academy staff member filed a complaint in August 2021, citing multiple concerns about contracting practices and other issues.

“This ‘company’ never came to work on the grounds (which was just pulling weeds) but was paid the exact amount for her college tuition,” the complainant wrote about the Angel’s Lawn Care contract. Sahan Journal obtained the complaint through a public records request.

In response, Noble Academy told the Minnesota Department of Education, or MDE, that it had handled the contract properly. The school explained that it had asked three companies for bids, and received a response only from Angel’s Lawn Care. Furthermore, it said, the contractor (Chang’s daughter) had disclosed her relationship with Chang to the charter school’s founder and superintendent, Neal Thao, who told the board chair. The board chair determined the contract did not represent a conflict of interest, as Chang was not responsible for supervising lawn-care contracts. The school also disputed the claim that Chang’s daughter had been paid the same amount as her college tuition, and said she had performed more work than called for in her initial contract.

Multiple efforts to reach Chang’s daughter for comment were unsuccessful.

In a recent interview, Paula Higgins, the director of the Minnesota Department of Education’s charter-school center, identified a key issue in the Noble Academy complaint. “There wasn’t a procurement process that appeared to be followed by the school,” Higgins told Sahan Journal. In other words: the school did not have a consistent, uniform process for awarding contracts.

Ultimately, in a letter to Noble Academy’s authorizer, the Department of Education found that the conflict of interest with the Angel’s Lawn Care contract “appears to have been mitigated.” But MDE required the school to update its policies about nepotism and conflicts of interest. It noted that Noble Academy’s nepotism policy was “not aligned” with the state law governing conflicts of interest in charter schools. The agency imposed no consequence or penalty on Noble Academy.

The story might have ended there: questionable contract, bureaucratic response. A plan to do better next time. But in the same complaint, a different contracting issue caught the eye of MDE officials. And this issue was bigger — much bigger.

In 2021, Noble Academy awarded Superintendent Thao — and his brand new management company — a no-bid contract for 10% of the school’s annual funds. In the contract’s first year, that amounted to nearly $1.4 million.

Surprising? Hard to say. Key to the charter school movement is autonomy: the ability to operate independently and innovate solutions that might work for students.

But that also means charter schools are exempt from many of the laws that govern the state’s public-school districts. Though Minnesota charter schools receive nearly all their funding from the state, they are not required to follow state procurement laws about how they award those taxpayer dollars to private entities.

The amount of money involved is significant. In the 2021-2022 school year, Minnesota charter schools awarded more than $132 million of state money through outside contracts worth more than $100,000, according to a Sahan Journal analysis of public tax filings. (That sum excludes food-service contracts, which involve federal funds and must follow federal procurement laws.)

(For an explanation on Sahan’s reporting methods, please see “ How Sahan Journal used artificial intelligence tools to identify $132 million in charter-school contracts ,” by Sahan’s data and AI reporter, Cynthia Tu.)

Though contracts with management organizations are relatively rare for Minnesota charter schools, these contracts are among the largest financial decisions a charter school can make.

Chang and Thao declined interview requests for this story. In a statement, Chang said that Noble Academy had provided “fulsome” responses to questions from the Minnesota Department of Education over a 15-month period. She noted that in January 2023, the Minnesota Department of Education had closed out the complaint, saying, “MDE considers these matters closed.”

“Noble Academy has likewise put this matter behind us,” Chang said in her statement. “Our values of transparency and open communication with all our valued stakeholders has always guided our work and will continue to do so. We remain steadfast in our commitment to serving our students and their families by providing a safe, healthy and inclusive learning environment, just as we have done for the past 16 years.”

Erin Anderson, the director of charter-school authorizing for Osprey Wilds Environmental Learning Center, the nonprofit that provides oversight of the school, said that Noble Academy had used the complaint process as a “learning opportunity.”

“While the school resolved the concerns the Department of Education had, they also took the opportunity to strengthen their practices so they can best uphold the public interest,” Anderson said.

A school with ample funding and falling enrollment

I started looking into the complaint about Noble Academy last fall, requesting documents and ultimately interviewing 10 former teachers and board members at the school. A visit to the school a few months ago revealed a well-appointed, newly built space, with welcoming lighting and floor-to-ceiling windows.

Former teachers describe a school environment of attentive students excited about learning, and passionate staff members dedicated to teaching well. The school focuses on Hmong language and culture, and environmental education; 85% of students are Asian. The Minnesota Department of Education has repeatedly designated Noble Academy a “ high-quality charter school ,” a designation that assesses a school’s academic and financial performance and makes it eligible to apply for certain grants.

Anderson describes Noble Academy as a “learning organization.”

“They strive to be learners from the top to the bottom. They are always trying to get better,” she said. Chang and Thao set that culture from the top, Anderson explained: holding teachers to high standards and making sure that students have the tools — academic, social, or emotional — to succeed wherever they go next.

For years, Noble Academy’s approach showed success. Before the pandemic, Asian students at Noble Academy outperformed many of their peers at local public schools on standardized tests. In 2018, the school enrolled more than 1,000 students; the following year, the school opened a second campus, Nompeng Academy.

Since the pandemic, however, the school has experienced a significant decline in both enrollment and academic performance. Nompeng Academy closed after just two years; board minutes cite low enrollment and transportation issues. Enrollment now hovers around 550, just over half its 2018 peak.

Test scores have dropped, too. Last year, Asian students passed math, science, and reading tests at rates lower than Asian students in the neighboring Osseo Area Schools, the suburban public-school district whose boundaries encompass Noble Academy’s Brooklyn Park campus.

At a recent school-board meeting, Thao, the school’s founder, acknowledged the declines in enrollment and test scores, but said the school’s scores compare favorably with those of other charter schools that focus on Hmong language and culture. Thao identified higher-than-average student attendance and progress toward English proficiency. He also pointed to the school’s strong financial health.

In the same meeting, the school’s accountant, Kyle Knudson, described the school’s financial stability as “enviable,” citing $12 million in the school’s cash balance—more than the school’s entire annual budget.

Former educators speak fondly of their students, parents, and colleagues. But most teachers who spoke with Sahan Journal described serious reservations about the administration’s handling of money, as well as concerns about contracting practices and nepotism. They cited the Angel’s Lawn Care contract as a prime example of their concerns about school management, and urged me to keep digging.

It didn’t take me long to find the contract with Thao’s new management company, Excellence in Education. But even after I obtained the contract, it wasn’t clear what that money was actually paying for.

I pursued this information with the time and tools of a full-time education reporter, filing public records requests with the school, the contractor, the authorizer and the state. But the experience left me wondering how a parent or community member could find out how a school was spending millions of dollars in public money — and whether that lack of transparency, and the absence of laws governing charter-school contracts, could lead to nepotism, waste, or graft.

So who is responsible for monitoring how charter schools award and spend that $132 million in large outside contracts? The Minnesota Department of Education? The schools’ authorizers? The individual school boards? Could the answer be, No one is fully responsible ?

After months of reporting and repeated inquiries to state officials and policymakers, I learned that I was not the only one asking questions about charter schools and their exemption from state procurement laws.

So was the Minnesota Department of Education. And this time, they had a plan to do something about it.

A legal loophole for awarding contracts

The contracting complaints at Noble Academy showcase a loophole in Minnesota’s anti-corruption laws.

Government contracting is the process of awarding public funds to private individuals or companies. Most Minnesota government entities — like cities, counties and school districts — are subject to public procurement laws. That means they have to follow a specific process for creating contract opportunities and awarding those contracts. For contracts over $175,000, municipalities (including school districts) must publicly solicit bids and award the contract to the “lowest responsible bidder,” according to guidance from the Minnesota Office of the State Auditor.

How does local government contracting usually work?

Say a Minnesota school district wanted to purchase 1,000 desks for a new high school, and the district estimates that the cost will be more than $175,000.

Before making a purchase, the school district would need to publish a request for proposals in a local newspaper. Different companies could then provide a bid of how much they would charge to provide 1,000 desks to the school’s specifications.

The school district would not have much discretion in which provider it chose for the contract. Under Minnesota’s municipal procurement law, the district would choose the “lowest responsible bidder.” That is, the district would choose the desk company that a) provided the lowest bid; and b) complies with applicable laws. A few exceptions apply — for example, procurement with “economically disadvantaged persons” would not need to follow a competitive bidding process. But, by and large, these are the requirements districts have to follow.

This process aims to create objective criteria for awarding government contracts. And it allows school districts and other municipalities to make decisions that save taxpayer dollars and avoid conflicts of interest. If one of the furniture companies is owned by the superintendent’s uncle, that relationship should not sway the process. The uncle still has a chance to win the contract, but only if his bid provides the best value to the school district.

Charter schools, however, do not have to follow these laws.

“Contracting is one of the schools’ autonomies,” Anderson, the charter-school authorizer, said. “They have a wide latitude in determining how to best use public resources to educate children.”

In the fall of 2023, Minnesota had 181 charter schools, many of which are quite small. The median Minnesota charter school serves just over 200 students. Charter schools frequently hire outside contractors to provide some services that large public school districts may provide in-house, such as food services, transportation and accounting.

But although charter schools are funded primarily by state tax dollars, they are not classified as “government entities” in Minnesota. That makes them exempt from public procurement laws involving the use of state funds, unlike cities, counties or school districts.

As a result, a charter school may end up paying more for, say, school-bus service, educational software or desks. It also means a school might award contracts based on personal relationships.

Before procurement laws, government contracts were frequently awarded to politicians’ friends or contributors as part of a patronage system, said David Schultz, who teaches political science and legal studies at Hamline University, and state constitutional law at the University of Minnesota Law School. Under political patronage systems , common in large American cities like Chicago and Minneapolis between the Civil War and the Great Depression, elected officials commonly hired their loyal supporters for city jobs, regardless of merit.

“The process was incredibly unfair and incredibly corrupt, because it wasn't an equal opportunity for people to compete,” Schultz said.

Exempting charter schools from procurement laws has opened the door to new issues with patronage, Schultz said.

"What we basically have said is that we're going to take entities that have enormous amounts of money and exempt them from the standards that we would expect to apply to any other governmental entity,” Schultz said. It’s as if the state forgot “the reason why we put all these rules in place,” Schultz added — that is, “to deal with corruption."

Noble Academy isn’t the only Minnesota charter school where state officials have raised questions about contracting practices.

Higgins, the Minnesota Department of Education’s charter-school center director, said the state has recently been looking into three charter schools that may have awarded transportation contracts without a procurement process.

And in December, Attorney General Keith Ellison’s Office alleged that the former executive director of Gateway STEM Academy in Burnsville diverted $300,000 in school funds to himself and three business partners, who also served on the school board. Some of those funds were allocated through contracts, and Ellison’s office said the school board did not approve the transactions. The four former Gateway STEM Academy leaders have also been charged in the Feeding Our Future case, in which more than 200 people are alleged to have defrauded the federal government of millions of dollars meant to feed needy children.

That case involves federal funds that were allocated through the Minnesota Department of Education. The first Feeding Our Future trial , which includes three of the Gateway STEM Academy leaders as defendants, began in April and is expected to last through June. A law firm representing one of the Gateway STEM Academy leaders said his attorneys wouldn’t comment during the trial; the others did not respond to requests for comment. Federal prosecutors have alleged the charter-school leaders spent that money on personal purchases such as lakefront property, flashy cars, and a church in Kentucky.

The succession plan: A leader leaves and keeps getting paid

From its early days, Noble Academy had two primary leaders.

Neal Thao opened Noble Academy in 2007. At the time, it was part of a relatively new movement of charter schools focused on the Hmong community. Parents wanted more emphasis on Hmong language and culture, and felt the public school districts had been slow to respond to their needs.

A letter Noble Academy sent Sahan Journal, in response to a series of data requests, describes Noble Academy as the “brainchild” of Thao.

Thao “singlehandedly founded the school and nurtured it for well over a decade,” the letter continues. “His efforts have been an unmitigated success. Noble has received multiple awards and recognition for its excellence. It is a school that was founded by marginalized people of color, with the goal of educating marginalized people of color at a high level.”

According to the organization Hmong American Experience, which tracks accomplishments of Hmong people in the United States, Thao and Chang were among the first five Hmong people in Minnesota to earn doctorates in education.

Chang has also been credited with developing the school. By the 2011-2012 school year, Mai Yia Chang was the school’s highest-compensated employee, according to public tax records. As the school’s academic director, she earned slightly more than Thao.

“Dr. Chang has led Noble Academy for more than a decade, essentially building the school from the ground up,” reads her bio on the school website . According to the bio, she arrived at Noble with more than 30 years of classroom and leadership experience. In addition to her doctorate in education, she holds a state superintendent’s license.

By the fall of 2020, as Thao eyed retirement, Chang was the school’s deputy superintendent of academics. Thao told the board he planned to retire in the next three to five years.

Meeting minutes from November and December 2020 indicate the school board decided Chang was the obvious choice to replace Thao. Thao, meanwhile, would no longer be a school employee. Instead, he would become a contractor for the school as the CEO of a new management organization, Excellence in Education.

“It will cause very little to no disruptions in the organization,” the December board minutes read. “The Board is aware that Dr. Chang has been with the organization since it opened and she is credited for being instrumental in the school’s accomplishments. …This plan will allow Superintendent Thao to smoothly transition into retirement while it gives Dr. Chang time to start looking for her replacement.”

An anonymous complainant, who reported the contract to the Minnesota Department of Education in August 2021, characterized the arrangement differently. Thao, the complainant said, “created this position which allows him to retire but still get paid.”

So who was responsible for overseeing whether this transition plan represented a prudent use of state funds?

Authorizers monitor charter schools — but not their contracts

Though charter schools operate autonomously, they receive oversight from an authorizer: an entity, usually a nonprofit, tasked with monitoring a charter school’s performance — academically, financially and operationally.

Noble Academy’s authorizer is Osprey Wilds Environmental Learning Center. Osprey Wilds requires its schools to maintain and follow a purchasing policy, Anderson told Sahan Journal.

When MDE began to investigate the complaint about Excellence in Education, in September 2021, the agency initiated a series of exchanges with Osprey Wilds that lasted for more than a year. In those letters, the state asked Osprey Wilds whether it believed the school was complying with its own policies.

In an April 2022 letter, the education department noted that Noble Academy’s purchasing policy, set by the school board, required multiple quotes for all purchases over $2,000, and a formal request for proposals for all contracts over $100,000. It also inquired what Osprey Wilds had done as an authorizer to assess the contract’s fair-market value.

In a response letter sent that June, Osprey Wilds maintained that the contract with Excellence in Education had been appropriate. The authorizer said that MDE’s interpretation of events “seemingly ignores the unique factual history” surrounding the contract. Osprey Wilds also asserted that evaluating the fair-market value of charter-school contracts lay outside its scope of responsibility as an authorizer.

“The Board’s focus was to continue its ongoing relationship with Mr. Thao, not to find a generic management company,” Osprey Wilds wrote in reply. “The goal was to create a structure that enabled Dr. Chang to step into the Superintendent role while Mr. Thao worked to transition his knowledge base to her. Given the deep history with Mr. Thao, this needed to occur gradually over time.”

Osprey Wilds acknowledged that Noble Academy had not always followed its procurement policy, and submitted a revised policy that the school board had approved. The new policy stated that a “comparative process” would be required of any contracts over $175,000, unless it was not feasible—for example, if the service was unique to one vendor.

But the new policy would not result in any changes to the contract. The authorizer argued that a comparative process would have been unnecessary for Noble Academy’s management contract with Excellence in Education, because of the school’s unique relationship with Thao.

In a sharply worded September reply, the Minnesota Department of Education pushed back on this interpretation. Higgins questioned why Osprey Wilds found this “noncompetitively awarded multi-million-dollar contract” appropriate.

“The response indicates the Noble board was not seeking a management company, but rather seeking a mechanism to continue to pay Mr. Thao without directly employing him,” Higgins wrote, on behalf of the department. “Protecting against this type of situation is the reason schools must maintain procurement and purchasing policies. These policies safeguard public money from being inappropriately spent without the requisite oversight. The contract as approved constitutes a substantial sum of money that heretofore would remain at the school, but is instead now being paid directly to the school’s founder and former CEO.”

In a recent interview with Sahan Journal, Higgins rejected Noble Academy’s reason for bypassing the procurement policy. “Charter school leaders leave their roles all the time,” Higgins said. “The school should be working in a way to set up processes and procedures so that when people do leave, there's something in place for the next person to step in and take over.”

After more than a year of correspondence over this complaint, Noble Academy agreed to terminate the Excellence in Education contract at the end of the 2022-2023 school year. The school then pledged to solicit proposals for a new education-management contract to take effect in July. It also assured the agency that the school board had the ability to terminate the Excellence in Education contract at any time.

With these assurances, the Minnesota Department of Education closed the complaint in January 2023.

That March, the school posted its request for proposals for an education management organization, publishing it in the Sun Post, a community newspaper serving Minneapolis’ northwest suburbs. The new contract would take effect in July 2023, the day after the previous contract ended.

Three companies reached out for more information, according to Noble Academy school-board minutes. But in the end, only Excellence in Education submitted a proposal.

So after the state reprimand for creating a “noncompetitively awarded multi-million-dollar contract,” Excellence in Education was back in business with Noble Academy. As before, the company would receive 10% of all school funds—amounting to more than $3 million in public funds since 2021.

Charter school contractors don’t always reveal how they spend public funds

So what exactly is Excellence in Education doing for Noble Academy? Even after I found the contract, it was difficult to figure out.

The contract with Excellence in Education, obtained through a public records request, lists various management services the company may provide, such as recommending the hiring and firing of staff and board members, comparing academic performance to peer schools, and overseeing the maintenance and repair of the school building. But it does not list any dollar amounts it will pay for any specific services. Instead, the company receives a flat 10% cut of all school revenue.

Minnesota schools typically make their monthly expenses available to the public. Many public-school districts post them online; at charter schools, this information is often available at school-board meetings, where the board has the opportunity to review the expenses.

But despite receiving millions of dollars in taxpayer funding, Excellence in Education is a private company. That means it is not subject to the same public records laws as public schools.

A provision in Excellence in Education’s contract with Noble Academy stipulates that it will comply with the Minnesota Government Data Practices Act “as if it were a governmental entity.” Accordingly, I filed a public records request with the management company to see Excellence in Education’s financial records.

The first response, from Thao, was curt. Excellence in Education, he said, “is not a government entity.” He directed me to request records from Noble Academy instead.

The school replied with a legalistic letter, two charts, and a high-level summary of Excellence in Education’s budget.

“Charter schools must incur a wide range of administrative overhead in connection with their operations: accounting services, curriculum purchases, facility management and maintenance, security, transportation, and office services such as record keeping,” read the letter, sent by Chang. “Under EIE, many of these services are paid directly by EIE, using the fee it receives from Noble.”

The budget document that Noble Academy provided showed that in the 2022-2023 school year, Excellence in Education’s revenue was just under $1 million. The three largest expense categories were salaries ($334,000), operations and facilities ($173,000), and finance ($146,000). That year, the company netted more than $216,000 in profit.

Noble Academy also provided two graphs, showing that its fund balance has increased sharply in recent years and that its costs that are coded “administrative” have decreased slightly since it approved the Excellence in Education contract.

The letter offered this point as proof that Sahan Journal was asking the wrong questions about the contract. “Assuming that your goal is to gain an accurate understanding of the actual cost of running Noble Academy, we would suggest that your data requests have been somewhat off the mark,” it says.

Osprey Wilds included documentation about Excellence in Education as part of the Minnesota Department of Education complaint investigation. Osprey Wilds’ response explained that the management company planned to pay for consultants who provide financial, operational and tax accountant services; professional development for staff; office supplies; accounting software; curriculum; insurance coverage; and salaries and benefits for Excellence in Education staff.

Osprey Wilds said Excellence in Education anticipated a profit in its first year so that it could provide “robust offerings” for Noble Academy, but that it expected to operate at a loss in future years.

“Certainly, as shown in the forecast, there is little concern that EIE intends to do anything but provide excellent services to Noble and/or any other schools that may wish to partake in what EIE is able to offer,” Osprey Wilds wrote.

In a school board meeting on January 31, 2024, Thao provided a mid-year update on Excellence in Education’s work. He read aloud a letter to the board, which described the school’s drop in academic performance and enrollment. Still, the letter emphasized that the school’s finances remain strong, a message Thao said he had shared with EIE’s investors in December.

“We want to thank EIE for your partnership with us,” Chang said. “I know that the board is very happy with your work. And so let's give him a hand, oh my goodness.”

The board clapped.

A school-board election with single-digit turnout

Though the authorizer and the state play roles in charter-school oversight, school governance primarily falls to the charter-school board. Charter-school boards are responsible for setting the school’s budget and contracting policies, awarding contracts and holding school leadership accountable to established standards.

But in interviews with Sahan Journal, former teachers and board members questioned the independence of the Noble Academy school board.

Under Minnesota law, charter-school boards must be elected and must consist of a mix of teachers, parents and community members. Parents and school staff, including teachers, are eligible to vote in charter-school board elections, and must be notified of an election 30 days before it occurs.

In the August 2021 complaint to MDE, however, the anonymous staff member told the agency that “the board is always hand-picked.”

At Noble Academy, school-board candidates are nominated by a board committee: the superintendent, the board chair and the board secretary. Thao served on the nominating committee while he was superintendent, until he left to become the CEO of Excellence in Education, at which point Chang replaced him on the nominating committee.

This committee makeup meant that Thao played a large role in selecting the individuals who ultimately voted on his own multimillion-dollar contract with Noble Academy.

Sahan Journal spoke with 10 former teachers and board members whose time at Noble Academy spanned from 2009 to 2023. None of them could recall ever being notified about, or voting in, a school-board election.

Noble Academy’s election procedures appeared to raise eyebrows at the Minnesota Department of Education. The agency asked the school’s authorizer, Osprey Wilds, to provide voter-turnout numbers for its last two Noble Academy elections. Osprey Wilds replied that nine voters participated in the May 2020 school board election, and six during the May 2021 election.

Higgins, writing for MDE, pointed out that the school had hundreds of parents and more than 50 staff members who could have voted in the election. The results, she said, “raise concerns about Noble’s notification to eligible voters and conduct of voting for the board of directors.”

Noble Academy and Osprey Wilds explained that those elections took place during the pandemic, and many families were juggling childcare, work and remote learning. The school provided letters and flyers apparently sent to parents and staff in advance of board elections.

“The Hmong community, which comprises a large portion of Noble's family base, tends to show low parent participation in board elections even in non-pandemic times,” read the June 2022 letter from Osprey Wilds.

Anderson told Sahan Journal she had been present for the 2022 board election, which the school scheduled to coincide with its annual carnival in an effort to boost voter turnout. Even though the carnival notched high attendance, Anderson said, few people voted.

Ultimately, MDE required Noble Academy to modify its application for board members to comply with state statute, and encouraged the school to work with families to find better voter-turnout strategies.

Sahan Journal asked Anderson about possible conflicts of interest in the nominating committee structure. After that conversation, she said she followed up with Noble Academy to ask the school to clarify that the committee’s role is to screen candidates for eligibility, not to pick the board members.

A potential fix comes to the State Legislature

During my reporting, I sought out opinions from education leaders and state officials to find out what they thought about the oversight of charter-school contracts. In late January, I requested interviews with Higgins, at the Department of Education, and Senator Steve Cwodzinski, DFL-Eden Prairie, who chairs the Senate Education Policy Committee. I hoped to discuss my reporting on Noble Academy and ask, among other things, why charter schools are exempt from procurement laws.

The Minnesota Department of Education did not immediately seem to act on my request. At that time — weeks before the legislative session started — Cwodzinski declined to discuss contracting issues at charter schools.

“Based on what you’ve shared, I believe any involved party that needs to will reach out to me with potential legislative remedies,” he wrote.

Then, on February 15, Cwodzinski introduced Governor Tim Walz’s education bill. (Since the governor is not a member of the Legislature, Democratic committee chairs like Cwodzinski often introduce his proposed bills.) One provision caught my eye.

The bill, SF 3567 , as proposed, would require charter schools to develop and follow a procurement policy, including a competitive (not “comparative”) bidding process for all contracts over $25,000. If a charter school did not adopt or follow its procurement policy, the Minnesota Department of Education could reduce the school’s aid in an amount equal to the purchase — an enforcement tool the agency lacked as it investigated the Noble Academy complaint.

In other words, if a charter school entered into a $1 million contract with a former school leader without soliciting other bids for those services, the state could reduce that school’s funding by $1 million.

An aide to Cwodzinski told Sahan Journal that that provision had been proposed by the Minnesota Department of Education. The day after Cwodzinski introduced the bill, the agency agreed to my interview request.

In that February conversation, Higgins told Sahan Journal that Noble Academy’s absence of a procurement process stood out to her — but it wasn’t the first time contracting practices had attracted her attention. She said the state had recently been looking into three other schools to learn more about how their transportation contracts were awarded. The new legislative proposal was not directly related to Noble Academy, she said. But these incidents helped fuel the push for a legislative change.

The federal government requires charter schools to have procurement policies for federal funds, she said, but there is no equivalent requirement for state funds. And state funds constitute the vast majority of charter-school funding.

The agency proposed this oversight bill to create more transparency and “safeguards for taxpayers,” Higgins said. If the Legislature passes these procurement provisions, she said, the agency would provide technical assistance to charter schools to help them implement the new laws.

“It's public funds, and we just want to make sure that they're used in a way that's in alignment with law — and it's for the kids,” Higgins said. If not, she said, the school would need to return the funds and follow the policy.

The proposal to require a charter-school procurement policy is now part of the Minnesota Legislature’s education omnibus bill — that is, a long bill containing many changes to education policy. Both the House and Senate are expected to vote on the bill this week.

Education Commissioner Willie Jett testified in support of the procurement policy requirement during a Senate Education Policy Committee hearing on March 18.

“It enhances the accountability, provides stability for students and families associated with charter schools, and ensures responsible management of public funds,” Jett said.

Anderson, the charter-school authorizer, said she supports it too. Joey Cienian, the executive director of the Minnesota Association of Charter Schools, said he had no comment on the proposal.

But the new law, if it passes, won’t apply to contracts that are already in effect.

Noble Academy’s contract with Excellence in Education expires in June 2027. By that time, the founder’s management company will have collected about $6 million in taxpayer funds.

Cynthia Tu contributed data reporting and analysis.

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