An independent oversight agency with sweeping powers to probe the operations of state government will open an investigation into the Charter Institute at Erskine, South Carolina’s largest charter school district.
The Legislative Audit Council , whose board voted Tuesday to launch the investigation, will have unfettered access to all Charter Institute records, with the exception of tax returns, during its legislatively-requested inquiry and will publish its findings and recommendations when it finishes.
The Charter Institute , a taxpayer-funded affiliate of Erskine College that oversees 26 charter schools throughout the state, came under legislative scrutiny earlier this year after reporting by The State Media Co. raised questions about its spending, operations and ability to provide objective oversight of the schools it regulates.
While charter school authorizers have historically served the circumscribed role of evaluating new charter school applications and providing oversight and accountability to existing charter schools, the Erskine Institute has operated more like a start-up business with an eye toward expansion and adding new revenue streams.
In recent years, Charter Institute leaders have formed and funded a controversial nonprofit called Teach Right USA that sells services to Charter Institute schools; embarked on a plan to open schools in Tennessee through Teach Right USA; and approved a charter school run by close associates that proposed to partner with Teach Right USA and Erskine College.
While none of the Charter Institute’s known pursuits are explicitly illegal under the state’s decades-old charter schools law, the district’s propensity for pushing the law’s boundaries has attracted critics among state lawmakers who argue it creates serious conflicts of interest that invite corruption.
In May, a bipartisan group of House lawmakers wrote the Legislative Audit Council to express their concern s that the Charter Institute’s financial entanglements could compromise its ability to “perform its duties under the (Charter Schools) Act with fidelity and/or may cause Erskine to apply inconsistent standards of accountability to different charter schools that it sponsors.”
The lawmakers, led by education committee Chair Shannon Erickson, R-Beaufort, asked the legislative watchdog to look into Erskine with a special focus on its financial connections to vendors and the for-profit management companies that operate many of the schools it oversees.
The group asked the audit council to probe specifically whether Erskine had invested in a for-profit education management company, taken money from vendors that do business or seek to do business with its charter schools or had close ties with any related entities that posed conflicts of interest.
Just weeks after the legislators made their request, Erskine College filed a lawsuit revealing its previously undisclosed financial stake in a for-profit management company whose schools the Charter Institute oversaw. A counterclaim filed by the management company two months later exposed that Erskine was the company's "founding owner."
Following the Legislative Audit Council’s decision Tuesday to launch its probe, a Charter Institute spokeswoman released a statement saying the district welcomed the review and looked forward to its findings.
“It is our hope that the LAC report will address common questions about the Institute’s structure and work while providing an opportunity for Institute schools and boards to share their experience working with us over the past seven years,” spokeswoman Ashley Epperson said in the statement.
Once completed, the audit will likely form the basis of any legislative action taken to more tightly regulate charter school authorizers and reform South Carolina’s charter schools law , which many stakeholders agree is in need of an overhaul.
Passed in 1996 and amended roughly a decade ago so that Erskine College and other universities could authorize charter schools, the law has not been updated to address many of the complications that have emerged as a result.
While lawmakers inserted several stopgap measures in this year’s budget bill intended to address specific concerns with the Charter Institute, they put off any comprehensive charter school reform until at least 2025.
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