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Blue Sky case puts spotlight on unresolved due-process issue

Does the Department of Education need more authority to close charter schools, or does it need to clean up its oversight act?

Second of two articles
On Monday, the operators of Blue Sky Online School and officials from the state Department of Education (DOE) were supposed to gather in St. Paul for a two-day hearing that was to establish once and for all whether the school, a statewide virtual high school with a bricks-and-mortar facility in West St. Paul, should close.

The hearing, however, has been postponed at the state’s request because the two sides are in settlement talks.

The DOE asserts that the school has made persistent, serious violations of state law, graduating students who have not completed required coursework and failing to offer curricula that meet department standards. After firing a number of highly public warning shots over the Blue Sky’s bow, it announced earlier this spring that the school would be closed.

BlueSky Online

In response, Blue Sky asked the state Court of Appeals [PDF] to intervene, claiming that [PDF] the department owed the school a public hearing. [PDF] Granted such a forum, its leaders said, [PDF] they were sure they would be vindicated.

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In the last two years, Blue Sky has reorganized its staff, board and administration, invested in curriculum used by other, respected online schools and delivered stack upon stack of documents to the DOE. Administrators claim that every time they answer one complaint, they’re presented with another.

At hearing, both sides would lay out answers
Who’s right? Who knows. A MinnPost review of available records in the case didn’t reveal anything close to a definitive answer. And so Your Humble Blogger had been looking forward to the hearing, to be conducted by the state Office of Administrative Hearings. There, both sides were to lay out their answers in plain English to an administrative law judge who, as a neutral finder of fact, would at long last create an official record.

On Wednesday we ran a story that described what learning looks like at Minnesota’s first wholly online high school and who can benefit from cyber-school, and that explored issues related to whether Blue Sky is living up to its promise.

Today, we’re interested not in whether the school should close, but whether the state has violated its right to due process and whether an outside fact-finder should be part of that process.

Originally conceived as alternatives for frustrated families and incubators for innovation, charters have not, on the whole, outperformed their mainline counterparts. The standouts often do offer strategies ripe for replication, but the persistent underperformers have proven no easier to close or turn around than failing public schools.

This year, prompted by the Blue Sky controversy, now in its second year, lawmakers from both parties moved to strengthen the DOE’s authority to act unilaterally to close schools. That provision was, of course, vetoed by Gov. Mark Dayton along with the rest of the GOP-crafted omnibus education legislation.

Should it be revived? Again, good question: The hearing scheduled for this week also might have shed light on whether the department badly needs the increased authority to protect taxpayers and schoolchildren, or whether it needs to clean up its own oversight act.

Freedom — with some accountability
When Minnesota passed the nation’s first charter-school law in 1991, its framers wanted it to contain some tension. The whole idea was to untether tuition-free, publicly funded schools from a bureaucracy that smothered innovation — but neither should the independent programs be able to bill the state for student tuition dollars with no accountability.

And so — drastically simplified — a kind of arms-length legal structure was created wherein someone who wanted to start a school had to find a sponsor: an agency such as a nonprofit, school district, institute of higher education or even the state Department of Education itself.

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The agency would issue a charter, the name of the legal document used to create individual schools. If the school performed badly, either academically or administratively, the sponsor could revoke or refuse to renew its charter.

If the DOE thought a school had problems, it could terminate the charter — but only after a public hearing. Before whom? During which what happens? The law didn’t specify.

And for the first decade, it didn’t matter. Most charter schools that blew up did so amid gross mismanagement. Bad-actor founders and leaders made off with checkbooks, misrepresented enrollment or imploded because someone underestimated the complexity of running a school. They rarely got any sympathy from their sponsors, so there was rarely a need for the DOE to step in.

In 2001, then-Rep. Matt Entenza, DFL-St. Paul, drew attention to the problem, singling out examples of charter operators receiving what seemed like excess compensation or otherwise playing fast and loose with state money.

The PEAKS schools
One of them was a small chain of outstate charters, the PEAKS schools, which came under scrutiny by the DOE’s predecessor, the Department of Children, Families and Learning. The schools’ sponsor, Central Lakes Community College in Brainerd, agreed that at least one of them needed to close, but went to bat for a 51-student school in nearby, tiny Pillager.

Official records on the case seem to be AWOL — a story in and of itself — but the contents of the yellowing file the Pillager school’s new administrators pulled from their archive at MinnPost’s request jibe with the accounts of some of those who were present. Weeks after the state cut off funding, the school and sponsor protested their notice of closure and, on June 20 and 21, 2001, an administrative law judge held two hearings in the Brainerd area.

Chief Judge George Beck did not, however, issue an official opinion. After two days of testimony, according to two people who were in attendance, it was clear the CFL’s case was far from airtight. The parties settled, the school got its back state aid, reconstituted with new leaders who were better at dotting their i’s. It is still in operation today.

Another school CFL had issues with was the Minnesota Transitions Charter School, in Minneapolis. Again, the official record created during arguments before the Office of Administrative Hearings showed that the state had not documented a solid case against the school.

Following what some of those involved recall was a blistering opinion from the judge — perhaps also lost to the annals of history — the department started over and documented its legitimate concerns, which the school addressed. It, too, is still in operation.

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Cited as having poor record of closing charters
Fast-forward the better part of a decade, and Minnesota was singled out by the very conservative Fordham Institute as having one of the country’s worst records of closing failing charters. Education reformers throughout the state were already at work on a law that would make sponsors, now called authorizers, more accountable for their schools’ performance.

Authorizers’ procedures would have to undergo a thorough vetting by the DOE to prove that they were capable of closely regulating every aspect of a school’s performance. The agency would still sign off on each individual charter, but once an authorizer had passed muster the assumption is that if the authorizer thinks a school should operate, it should.

Two years ago, when the state first received complaints about Blue Sky, the school was authorized by the Brooklyn Center school district. Feeling stretched by running its mainline schools, the district decided to get out of the charter business when the law changed and asked Blue Sky to look for a new authorizer.

Blue Sky did, last spring signing on with Novation Education Opportunities, one of the first authorizers to pass muster under the new law. Instead of simply pulling the plug on the school, which had been under investigation for the better part of a year at that point, the DOE approved Novation’s application to charter Blue Sky.

New board hired new leaders
No one at DOE has ever confirmed as much, but it is widely thought that the first complaints were lodged by a former administrator and two fired teachers. Blue Sky’s current leaders say the initial complaints — that students were being graduated without having completed required coursework — had some validity. The new leaders were hired by a new board with a specific mandate to clean things up, which they say they have done.

In the documents the state has made available, the number of diplomas the DEO believes were improperly awarded has been blacked out, making it impossible to know whether Blue Sky’s assertions that the incidents were few and in the past are right.

In any case, the new school administrators say they supplied the state agency with the proper documentation and heard nothing. The better part of a year went by and, according to documents filed in the case, DOE received calls from unidentified individuals asking how the investigation was proceeding.

That was last fall. Over the winter, the state and the new school leaders went back and forth to no avail. In March, the DOE told Novation to close the school. Novation asked for time to do its own audit, which it said revealed no ongoing problems.

After the DOE rejected that appeal, Blue Sky filed with the state Court of Appeals arguing, essentially, that its right to a public hearing had been denied.

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Differing opinions on the right to a hearing
There are differing opinions among school administrators and policymakers just what that hearing right is. Many believe the authorizer must conduct the hearing; others, including Blue Sky’s attorney, Cindy Lavorato, believe the Office of Administrative Hearings is the best place to create a solid record.

Minneapolis Public Schools recently held a hearing in the case of Friendship Academy, a school it chartered that was due for renewal. Superintendent Bernadeia Johnson recommended a year’s probation, but in April the school board took a preliminary vote not to renew. In May, a hearing was held at a board meeting. Afterward, the board voted 6-1 to give the school the year Johnson had requested.

Last month, the DOE agreed to Blue Sky’s request to go before a neutral finder of fact to create a record. After several negotiation sessions, on Friday the state asked to postpone the hearing.

Leaving aside for a moment the question of whether Blue Sky should stay open, if DOE’s critics are right a settlement would mean that, 20 years and one major reform later, it’s still not entirely clear what a charter school’s due process rights are and whether Minnesota can close bad charters any more easily than failing mainline schools.