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A state school board member is questioning whether family members should be allowed to contract with one another to run charter schools, calling the relationship between a charter-school academy and its management company "not right."
But the practice of family members running charter schools together is not unique to one school. Charter schools are independently run public schools often started by groups of parents.
Outgoing state school board member Denis Morrill raised the issue at a board meeting this month as the board considered American Preparatory Academy's request to expand beyond its current plans. The academy pays a charter school management company $986 a year per student to run its two schools, according to the management agreement. The company is owned by sisters of the chairman of the academy's board.
"I'm not willing to approve and watch expand something that puts another $920 a year in the pocket of the sister of the person who's asking for the expansion," Morrill said.
With about 1,140 students enrolled in American Preparatory Academy's two schools, the for-profit management company, led by Carolyn Sharette, receives more than $1 million a year, she said. Sharette's brother, Howard Headlee, chairs the American Preparatory board, which hired Sharette's company. The academy is opening a third campus in the fall with another 720 students.
Sharette, Headlee and their sister Laura Campbell opened the first school together in 2003. Sharette and Campbell worked at the school and later created the charter management company, called American Preparatory Schools Inc.
Sharette said setting up a management company became necessary to allow her to assist other charter schools that were approaching her for help without using American Preparatory Academy's resources.
However, Morrill, who is also a lawyer, said he believes it's illegal under current law for Headlee's board to hire his sister's company.
Headlee and Sharette say it's legal, as does Marlies Burns, state charter school director.
Carol Lear, director of school law and legislation at the state Office of Education, said "the statute is difficult to interpret, and we should leave that for the courts to determine."
Under new exceptions to the law, set to take effect in July, it appears the arrangement will soon be legal if it's not already. Sen. Howard Stephenson, R-Draper, sponsored the bill that changed the law this year and is friends with Headlee but said the change had nothing to do with American Preparatory. He said it's intended to make the law — which regulates relationships between charter school board members and employees and contractors — consistent for charters and school districts when it comes to construction contracts.
Headlee said he was unaware of the changes Stephenson made.
Also, Headlee did not attend the meeting in which the board voted to hire Sharette's company, did not participate in discussions about it and previously declared his conflict of interest, according to minutes of the 2008 meeting in which the board voted to hire Sharette's company.
Headlee said he has no financial interest in his sister's company. He said the board followed competitive bidding practices required by state law but Sharette's bid was the only one that met the needs of the school's instruction model.
Sharette's company employs the academy's administrators and handles the school's finances and academics.
"If you look at almost every charter school in the state you will find there are families that got together to try to improve the educational environment for their children — very similar to what me and my two sisters did 10 years ago," Headlee told The Tribune.
Kim Frank, director of policy and advocacy for the Utah Association of Public Charter Schools, said she knows of a handful of other Utah charter schools founded by relatives, and said she doesn't believe that's a problem.
"I do agree that as long as it is fully disclosed and they recuse themselves on votes where decisions are made regarding employment of their family members, I think it's great," Frank said.
But Greg Richmond, president and CEO of the National Association of Charter School Authorizers, said it raises questions.
"The thing that is worth noting is it's a conflict of interest with an entity that is charged with the entire operation of the school," Richmond said. "It's a conflict of interest regarding the whole school. [The board chairman] would almost have to be recusing himself completely from all action of the board."
An issue brief from Richmond's organization states "if the board's responsibility is to replace an ineffective school leader who is hampering student achievement, and the board chair is the school leader's spouse, the students are likely to be ill-served, even though in many states this arrangement is within the laws and most ethics rulings."
Headlee said he does not participate in discussions or votes when the management contract is renewed. He also said he would remove himself from any investigation or disciplinary action against the company if it were to break any rules set by the board. But there have not been any problems, he said.
Still, Morrill said, such situations shouldn't be allowed. "It leaves a door wide enough to drive a truck through of ways people can rip off the state," he said.
The state board ultimately approved the school's request to expand, though six board members voted against it.
State board member Leslie Castle said after the meeting she's not sure whether the relationship is inappropriate but it's something that "needs to be looked at."
But state school board member Dave Thomas said "American Preparatory Academy does a really good job in educating kids."
High percentages of students at the school's Draper campus score proficient on state tests. And at the school's other campus, the School for New Americans, students' scores on the DIBELS reading assessment improved dramatically from the beginning to the end of the year. The two schools have more than 6,000 kids on their waiting lists, Sharette said.
Sharette and Headlee said that's what state education leaders should focus on.
"For [Morrill] to raise this boogeyman that somehow somebody is doing something inappropriate shows exactly why his time on the state school board has passed," Headlee said. "He's much less concerned about actual performance and results and the desires of parents for their children than he is about raising these boogeymen as issues."
Morrill had hoped to run again for his seat on the state school board, but a governor-appointed committee chose not to forward his name to the governor for ballot consideration. Instead, they chose three other candidates, two of whom were charter school founders.
Joel Coleman, a founder and board member of Monticello Academy charter school, won Morrill's seat this month. Coleman's wife had served as director of Monticello until the state Charter School Board ousted her last year after an investigation spurred by complaints from parents about low teacher morale and efforts to block parental involvement in the school's management, which they said was paralyzed by conflicts of interest.
Kim Coleman is now suing a number of state Charter School Board members and other education officials for more than $5 million for allegedly unlawfully removing her from her post, among other allegations.
Morrill has said that he believes part of the reason the nominating committee didn't forward his name to the governor for re-election was because of his criticism of charter schools. Still, he said, he didn't raise the issue about American Preparatory Academy out of spite.
"I'm not trying to be vindictive," Morrill said. "It's the principle I'm concerned about." —
On July 1, changes will clarify state law
If a charter school board enters into a contract in which a board member or a relative of a board member has a financial interest, the board member shall:
Disclose the financial interest in writing.
Abstain from the board's vote on the contract.
Not attend any meeting in which the contract is being considered or determined.