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by WILL FOLKS
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South Carolina state auditors failed to identify any favoritism or special treatment on the part of the Palmetto State’s largest charter school authorizer – which submitted to an exhaustive legislative audit review despite the fact it is not an agency of the state.
The Charter Institute at Erskine, established in 2017, currently sponsors 28 charter schools across the Palmetto State – serving an estimated 30,000 students. It is projected to add at least eight new schools in the coming academic year – while existing schools are projected to add multiple grade levels. Those additions will boost its student population by at least 7,000 students.
While the S.C. Public Charter School District authorizes more schools – a total of 45 during the current academic year – it has approximately 22,000 students, making it the second-largest charter authorizer in the state.
The Erskine Institute has drawn praise for its innovative approaches to elevating academic achievement – including a recent $1.7 million appropriation to improve educational opportunities and outcomes for children in the Interstate 95 corridor – also known as the “Corridor of Shame.”
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It has achieved this success with a pristine regulatory record, too. Just this week, the authorizer received notice from the S.C. Department of Education (SCDE) that it had received an “all clear” rating with “no instances of non-compliance.”
“The district’s programs are robust and implemented with fidelity,” the letter (.pdf) noted.
SCDE has also consistently given the Institute a “low-risk” rating on its annual assessment – the best possible rating on this tiered accountability metric.
Charter schools were first authorized in the Palmetto State in 1996, with amendments to the law in 2012 allowing institutions of higher learning to sponsor them. Erskine sponsored 13 schools during its inaugural school year in 2018-2019 – and has continued to see expansive growth with its emphasis on traditional American values.
Lawmakers who requested the S.C. Legislative Audit Commission (SCLAC) report sought more information on the Institute, though – specifically wanting to know if it was investing funds in an education management organization (EMO). Depending on the structure of such an investment – and the returns generated – that could jeopardize its non-profit status.
The answer, however, was a resounding “no.”
“We did not find that the Institute has invested funds in an EMO,” the report (.pdf) concluded.
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Auditors further concluded there was no “indication that the Institute gave preferential treatment” to donor entities that either contracted (or sought to contract) with its schools – “nor did we find any evidence suggesting that these companies donated with the intent of earning preferential treatment.”
Citing four examples of EMOs which donated to the Institute, auditors concluded they did not “find any evidence indicating that these donations resulted in any favoritism towards these companies in securing business from the Institute’s charter schools; nor did we find any evidence suggesting that these companies donated with the intent of earning preferential treatment from charter schools sponsored by the Institute.”
Finally, auditors concluded that “in reviewing the Institute and related entities, we did not find a violation of state law regarding conflicts of interest.”
So… taxpayers spent an estimated $500,000 to nose around a private non-profit based on multiple allegations that turned out to be false?
In its response to the audit, the Institute took note of the “application of such significant resources to definitively answer the questions contained in the legislative referral that initiated this audit.”
While SCLAC auditors cleared the institute of all the items identified in its initial scope of review, their report cited multiple “issues for further study” – issues which pertained “not just to the Institute but to the South Carolina charter school system in general.”
Specifically, the “non-scoped” areas of the report criticized the Institute for out-of-country travel with its school leaders – including recent trips to London and Stockholm.
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“Since the inception of this program, all out-of-country travel has been funded with non-governmental funds,” the Institute noted in its response to the audit.
The Institute was also criticized for its office space – specifically a ten-year lease on the 25th floor of the Truist building in downtown Columbia, S.C. (the former home of the Capital City Club). While the Institute is exempt from specific provisions of state law governing the lease of real property by governmental bodies (§ 1-11-55), auditors suggested the nonprofit “could save state funds if it explored more economical opportunities for its office location.”
Never mind that state agencies occupy a whopping 160,000 square feet of office space in the same building…
Institute leaders countered this criticism by claiming auditors failed to consider the revenue generated by sub-leasing their expansive conference space within the facility – including an event held the evening before the audit was published – as well as the money saved by state agencies (including SCDE) which are permitted to host events there at free or reduced rental rates.
“We encourage the LAC to also consider the impact of rental income, as the Institute did, as part of its calculation of net lease expenses – an arrangement that significantly lowers the Institute’s cost of occupancy,” the entity noted in its response.
Bottom line? This seems a costly nitpick of an entity we’re not even sure is subject to a legislative audit – irrespective of what may have motivated state representative Shannon Erickson to call for the legislative colonoscopy in the first place. While we suspect the purportedly extravagant travel and office expenses contained in the report will generate splashy headlines in certain mainstream media outlets – especially The (Columbia, S.C.) State newspaper – it’s doubtful they will focus on the cost of the probe itself.
Seriously, given auditors spent significantly more taxpayer money to investigate these alleged failings… what, exactly, was the point?
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The biggest frustration with the report from the Institute’s perspective? According to a statement from its chief executive officer Cameron Runyan, auditors didn’t ask a single question about the outcomes the Institute has labored to achieve.
“While the LAC review focused extensively on bureaucratic imperatives, there was not one request for information or interview question by the LAC that focused on children or the impact that the Charter Institute at Erskine has had on children over its entire seven-year existence,” Runyan noted.
One of the Institute’s partners highlighted that ongoing positive impact in the aftermath of the audit’s release.
“The innovations we’ve put in place – whether in advising, intervention, or wraparound support – weren’t guesses; they were built from practices we observed in high-performing schools across the country through our partnership with the Charter Institute at Erskine,” said David Crook, chief executive officer of The Heron Institute, which has two schools under the Erskine umbrella.
“The Institute has consistently pushed us to look beyond the status quo and invest in strategies proven to help students succeed, especially those who’ve struggled in traditional settings,” Crook added. “Many of the gains our students have made over the last several years are a direct result of that shared commitment to doing what works.”
Officially, the nonprofit sounded a conciliatory tone in its comments to the media.
“The Charter Institute at Erskine appreciates the comprehensiveness of the Legislative Audit Council’s report,” a statement provided to FITSNews noted. “We are grateful that the review affirmed the integrity of the Institute staff and their work in the service of 30,000 students in every zip code in South Carolina. We will continue to evaluate the LAC’s recommendations that align with our mission and unique structure. The Institute remains committed to transparency, accountability, and above all, its mission to transform a generation of South Carolinians.”
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ABOUT THE AUTHOR…
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.
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1 comment
The coverage of this in the mainstream press is more detailed and provides a lot of info in some possibly shady stuff that went on. Any organization with their hand in the taxpayer money pot deserves more oversight and regulations than these folks are getting.