Measuring Up



weight: 2 | possible total: 8

10. Transparency Regarding Educational Service Providers (ESPs) Allowed

10A. All types of educational service providers (both for-profit and nonprofit) are allowed to operate all or parts of schools.

10B. The charter application requires (1) performance data for all current and past schools operated by the ESP, and (2) explanation and evidence of the ESP’s capacity for successful growth while maintaining quality in existing schools.

10C. A performance contract is required between the independent charter school board and the ESP, with such contract approved by the school’s authorizer.

10D. School governing boards operate as entities completely independent of any ESP, individuals compensated by an ESP are prohibited from serving as voting members on such boards, and existing and potential conflicts of interest between the two entities are required to be disclosed and explained in the charter application.

10E. Provides that charter school governing boards must have access to ESP records necessary to oversee the ESP contract.

10F. An ESP must annually provide information to its charter school governing board on how that ESP spends public funding it receives when the ESP is performing a public function under applicable state law.

10G. Requires that similar criminal history record checks and fingerprinting requirements applicable to other public schools shall also be mandatory for on-site employees of ESPs who regularly come into contact with students.

How well do states’ laws align to this component of the model law?

State

Charter Law Description

Score

Alabama

Alabama law allows a charter school to contract with an education service provider (ESP) for educational design, implementation, or comprehensive management services.

For those applicants proposing to use such ESPs, Alabama law requires them to include in their charter application evidence of the ESP’s success in serving student populations similar to their targeted population.

Within their application, Alabama law requires applicants to provide a term sheet setting forth the proposed duration of the service contract; roles and responsibilities of the governing board; the school staff; and the education service provider; scope of services and resources to be provided by the education service provider; performance evaluation measures and timelines; compensation structure, including clear identification of all fees to be paid to the education service provider; methods of contract oversight and enforcement; investment disclosure; and conditions for renewal and termination of the contract.

Statute provides that school governing boards operate as entities completely independent of any educational service provider.

Statute also requires applications to disclose and explain any existing or potential conflicts of interest between the charter school board and the proposed service provider and any affiliated business entities.

Alabama law requires charter schools to follow same laws regarding fingerprinting and background checks as all public schools. This includes provisions to require contractors to be screened.

4

Alaska

Alaska law does not include any of the model law’s provisions for educational service providers.

0

Arizona

ASBCS policies require those applying to this board to offer details regarding any ESP in their application, including: services to be provided; the ESP’s roles and responsibilities in relation to the applicant and the school’s management and governing board; performance expectations for the ESP; background information on the ESP including relevant performance data for other schools that the ESP has managed; and the actual service agreement as executed between the applicant and the ESP or a template version if not yet executed. However, these requirements aren’t applicable to higher educational authorizers.

Law requires all persons engaged in instructional work directly as a classroom, laboratory or other teacher or indirectly as a supervisory teacher, speech therapist or principal to have a valid fingerprint clearance card.

4

Arkansas

Arkansas law is silent regarding these arrangements. There is nothing explicit in law that prevents schools from contracting with educational service providers to operate a school nor guides the authorizer in their review of such provisions.

2

California

California law includes a small number of the model law’s provisions for educational service providers. California law permits education service providers to operate charter schools. However, there are no explicit statutory provisions guiding any charter application requirements specifically for educational service providers, performance contracts between the school and service provider, authorizer approval of contracts, school governing boards operating completely independent of any educational service provider, and conflicts of interest. Charter schools operated by educational service providers are subject to all of the laws in these areas that apply to all other charter schools in the state.

California law requires criminal background checks for employees of any entity contracted to provide services that may involve contact with pupils.

2

Colorado

Colorado law requires the following within any charter application that proposes to contact with an ESP:

(I) A summary of the performance data for all of the schools the education management provider is managing at the time of the application or has managed previously, including documentation of academic achievement and school management success;

(II) An explanation of and evidence demonstrating the education management provider's capacity for successful expansion while maintaining quality in the schools it is managing;

(III) An explanation of any existing or potential conflicts of interest between the governing board of the proposed charter school and the education management provider; and

(IV) A copy of the actual or proposed performance contract between the governing board for the proposed charter school and the education management provider that specifies, at a minimum, the following material terms: (A) performance evaluation measures; (B) the methods of contract oversight and enforcement that the governing board will apply; (C) the compensation structure and all fees that the proposed charter school will pay to the education management provider; and (D) the conditions for contract renewal and termination.

The law requires that similar criminal history record checks and fingerprinting requirements applicable to other public schools shall also be mandatory for on-site employees of ESPs who regularly come into contact with students.

4

Connecticut

Connecticut law provides that the governing council of a charter school may only enter into a contract for whole school management services with a non-profit charter management organization.

Connecticut law requires that applications include evidence of educational service provider success with similar populations, but it does not require that applications include evidence of the provider’s capacity for growth.

The law specifies that an application of a charter school which intends to contract with an ESP that must detail the roles and responsibilities of the charter board, the staff of the schools, and the ESP; the scope and services to be provided by the ESP; the performance evaluation measures and timelines; the compensation structure including all fees to be paid to the ESP; methods of contract oversight and enforcement; conditions for renewal and termination of contract; and evidence of compliance with all provisions of law.

The law also requires an annual audited statement of all revenues from public and private sources and expenditures related to such ESP’s function with the school, as well criminal background checks for all ESP contractors performs a service involving direct student contact.

Connecticut law contains provisions requiring authorizer approval of any performance contracts between schools and educational service providers, ensuring school governing boards operate as entities legally and fiscally independent of any educational service provider, and dealing with existing and potential conflicts of interest between the school and the provider. It is silent on any prohibition of individuals compensated by an ESP serving on the charter board.

6

Delaware

Delaware law includes a small number of the model law’s provisions for educational service providers. Delaware law allows contracting with all types of educational service providers.

Delaware law provides that schools contracting with Education Service Providers must oversee and maintain authority over management, hold it accountable for performance as agreed under a written services agreement, and require annual financial reports of the education service provider.

Delaware law requires any person working in a public school to have background checks, including ESP employees who regularly come into contact with students.

While not in law or regulation, the state department of education’s application contains extensive application requirements for schools contracting with ESPs, including conflict of interest requirements.

6

District of Columbia

While these requirements aren’t in law, DC PCSB’s charter application requires performance data for all current and past schools operated by the ESP, including documentation of academic achievement and (if applicable) school management success and explanation and evidence of the ESP’s capacity for successful growth while maintaining quality in existing schools.

The law requires that a charter school submit in its application a description of any major contracts planned with a value equal to or exceeding $10,000. In practice, as part of the application process, DC PCSB has collected draft agreements for these major contracts. Because ESPs are considered a part of a charter school’s governance structure, any proposed ESP – either at application or during the life of a charter – must be approved by DC PCSB. Also, as part of its governance oversight, DC PCSB requires that each school’s board consist of a majority of disinterested trustees, i.e. trustees not associated with any ESP.

The law also requires that under certain conditions such school management organizations must, if requested by the charter school, provide books, records, papers, and documents related to the services the organization provided to the school (with such information also available to the school’s authorizer). Such information must be provided if requested, and if the school management organization receives from the school an annual fee equal to or exceeds 20% of the school’s annual revenue, or if the amount received will exceed 25% of the organization’s annual revenue.

The Non-Profit Corporation statute provides requirements for conflicting of interest contracts. In addition, the charter law specifically address conflicts of interest related to school management organizations and the charter school board.

4

Florida

Florida law permits charter schools to contract with education service providers.

State board regulations require the use of a model charter application form, which requires details on any proposed ESP agreements, including services, performance evaluation measures, fee structure, renewal and termination provisions, and how the relationship with the ESP will further the school’s mission. Regulations also require the application to detail why the ESP was selected, what due diligence efforts were conducted to inform the selection, a summary of the ESP’s history, the background and experience of senior management, and student and financial performance data from other schools using this ESP.

The state’s model charter contract form requires the inclusion of any ESP agreement and provides that any changes to the ESP agreement require charter contract modification and approval.

Regulations require the application to explain how the charter school’s governing board will ensure an “arm’s length,” performance-based relationship between the governing board and the ESP. In addition, state law provides that an employee of the charter school, or his or her spouse, or an employee of a charter management organization, or his or her spouse, may not be a member of the governing board of the charter school.

The state’s model application (which was adopted as a rule by the state board of education and therefore has the force of law) requires an applicant to describe the oversight and evaluation methods that the board will use to oversee the ESP and requires an authorizer to use evaluation criteria that includes a description of how the school’s governing board has a clear plan for holding the ESP accountable for negotiated performance.

The model application also must include a description of the spending decisions the management organization can make without obtaining governing board approval, what reports the ESP must submit to the board on financial performance, and on what schedule, and how the governing board will provide financial oversight.

The Florida statute requires all employees and contractors to undergo background screening.

8

Georgia

Georgia law explicitly allows charter schools to contract with educational services providers.

Within the application, it requires applicants to submit any intended contracts for the provision of educational management services and a disclosure of any potential conflicts of interest.

According to regulation, for start-up charter schools, teachers and other instructional staff and faculty must be employees of the Governing Board and may not be employed by an Educational Service Provider or other entity affiliated with an Educational Service Provider. The individual with the highest authority in school administration may be employed by an Educational Service Provider only if the Governing Board retains the authority to select and dismiss that individual from service at the charter school. For start-up and conversion charter schools, non-instructional staff, such as the Chief Financial Officer, business manager, bookkeeper, or maintenance personnel, may be employed by entities other than the Governing Board; however, the Governing Board shall remain responsible and accountable for all operations, compliance, and performance of any and all selected contractors.

The law does not explicitly prohibit ESP employees from serving on charter governing boards and does not explicitly require potential conflicts to be outlined. In practice, the Commission petition requires applicants to disclose conflicts, but the law does not require it.

Regulation requires a charter school’s procedures to ensure compliance with the requirement that the school shall not allow any faculty, staff, or governing board member contact with students without having annual documentation of a successful background check as well as the charter school’s policies and procedures that establish the requirement that faculty, staff, and governing board members must immediately disclose to the school the occurrence of any arrests or other such occurrences which would have resulted in an unsuccessful background check if they had occurred prior to the background check. Each school employee must have a clearance certificate from the Georgia Professional Standards Commission (GaPSC).

4

Hawaii

Hawaii law includes a small number of the model law’s provisions for educational service providers.

The law allows all types of educational service providers to operate schools.

The law requires the charter application to detail a governance structure that incorporates a conflict of interest policy, but does not require that existing and potential conflicts of interest between the two entities be disclosed and explained in the charter application. The law also provides that no person may serve on the governing board of a charter school if the person is an employee or former employee of any vendor or contractor providing goods or services to any charter school under the jurisdiction of that governing board unless the person is a vendor or contractor and at least one year has passed since the conclusion of the vendor or contractor’s service to a charter school under the jurisdiction of that governing board or the person’s serving on the governing board shall not cause more than one-third of the voting members of the governing board to be made up of vendors or contractors who are providing goods or services to any charter school that is under the jurisdiction of that governing board. The law also provides that no vendor or contractor providing goods or services to a charter school may serve as the chair of the governing board of that charter school unless at least one year has elapsed since the conclusion of the vendor’s or contractor’s service to the school, provided that an authorizer may grant an exemption from this requirement.

The law requires that anyone working in close proximity to children in a charter school must be fingerprinted, but it does not explicitly state that employees of education service providers or contractors are included.

2

Idaho

Idaho law allows a charter school board to legally contract with for-profit entities “for the provision of products or services that aid in the operation of the school.”

The law requires that prior to approval of the charter petition indicating the school board’s intention to contract with an educational services provider, authorized chartering entities shall conduct a thorough evaluation of the academic, financial and organizational outcomes of other schools that have contracted with the educational services provider and evidence of the educational services provider’s capacity to successfully grow the charter school while maintaining quality management and instruction in existing schools.

The law prevents many (but not all) conflicts of interest by prohibiting any member of a charter school board of directors from benefiting financially, whether directly or indirectly, from a contractual relationship with the school. Idaho law prohibits charter school board members, as public officers, from having an interest in any contract entered into by the board. The law generally prohibits charter school contracts from being awarded to spouses of charter school board members. The law requires that ESPs, whether for-profit or nonprofit, shall be third-party entities separate from the charter schools with which they contract. No more than one-third (1/3) of the charter school’s board membership may be comprised of nonprofit educational services provider representatives. Nonprofit educational services provider representatives may not be employees of the charter school or the educational services provider and may not hold office as president or treasurer on the charter school’s board. For-profit educational services providers may not have representatives on the charter school’s board of directors.

4

Illinois

Illinois law contains a small number of the model law’s provisions regarding educational service providers. Under Illinois law, a charter school may negotiate and contract with a for profit or nonprofit private entity for the use of a school building and grounds or any other real property or facilities that the charter school desires to use or convert for use as a charter school site, the operation and maintenance thereof, and the provision of any service, activity, or undertaking that the charter school is required to perform in order to carry out the terms of its charter.

The law provides that all authorizers shall ensure that any charter school established on or after January 1, 2015 has a governing body that is separate and distinct from the governing body of any CMO or EMO, and must deal with any conflict of interest issues. In reviewing charter applications and charter renewal applications, authorizers shall review the governance model proposed by the applicant to ensure that there are no conflicts of interest. The law also provides that no charter school may employ a staff person who is simultaneously employed by an EMO or CMO.

Charter schools are required to abide by the portions of the school code that deal with criminal history record checks and fingerprinting requirements. While the section of pertinent code does not call out charter schools or ESPs, it is inferred that employees of ESPs are also required to abide by these procedures.

2

Indiana

Indiana law notes that if a proposed charter school intends to contract with an education service provider for substantial educational services, management services, or both educational services and management services, the applicant must provide: (1) Evidence of the education service provider's success in serving student populations similar to the targeted populations, including demonstrated academic achievement as well as successful management of nonacademic school functions, if applicable. (2) A term sheet setting forth the: (A) proposed duration of the service contract; (B) roles and responsibilities of the organizer, the school staff, and the education service provider; (C) performance evaluation measures and timelines; (D) compensation structure, including clear identification of all fees to be paid to the education service provider; (E) methods of contract oversight and enforcement; (F) investment disclosure; and (G) conditions for renewal and termination of the contract. (3) A disclosure statement to explain any existing or potential conflicts of interest between the organizer and the proposed education service provider or any affiliated business entities. (4) Assurance that the organizer will be structurally independent of the education service provider and shall set and approve school policies.

The law states that individuals who work at a charter school are employees of the charter school or of an entity with which the charter school has contracted to provide services are not exempted from criminal history record checks and fingerprinting requirements.

4

Iowa

Iowa law includes a small number of the model law’s provisions for educational service providers. Iowa law indicates that a charter school may enter into contracts.

2

Kansas

Kansas law includes a small number of the model law’s provisions for educational service providers. Kansas law states that an “educational services contractor” may petition to establish a charter school. This means that such a provider could receive a direct charter contract with the local school board (not the charter school’s board).

2

Louisiana

State board rule requires schools that plan to contract with an educational service provider (ESP) to include the details of such contracts in their charter applications. Such details must include performance data for current or past schools operated by the ESP, evidence of the ESP’s capacity for successful growth, the material terms of the performance contract, and any existing or potential conflicts of interest. They also require charter school boards to operate legally and fiscally independent of any ESP.

4

Maine

Maine statute allows charter school governing boards for virtual charter schools to enter into contracts with educational service providers for education design, implementation, or comprehensive management of the virtual charter school program. However, it only allows charter school governing boards for brick and mortar charter schools to enter into contracts with educational service providers for a limited scope of education or management services.

Maine law requires the charter application to contain details regarding past performance data of any service provider and significant details regarding the terms of the proposed contract with the service provider.

The law also requires the application to contain details about any potential conflict of interests between the charter school governing board and the service provider and a statement of assurance that the two entities are legally and operationally independent of each other.

Maine rules require a charter school’s governing board, leaders, and managers to be legally and operationally independent from any education service provider. In determining whether boards, leaders, and managers are independent of the service provider, the rules require an authorizer to consider all factors, including but not limited to: whether the charter school’s governing board is selected by, or includes members who are employees of, the education service provider; whether the charter school has an independent attorney, accountant, and audit firm that works for the charter school and not the education service provider; whether the contract between the charter school and the education service provider was negotiated at “arms length,” clearly describes each party’s rights and responsibilities, and specifies reasonable and feasible terms under which either party may terminate the contract; whether the fee to be paid by the charter school to the education service provider is reasonable for the type of services provided; and whether any other agreements (e.g., loans or leases between the charter school and the education service provider) are fair and reasonable, documented appropriately, align with market rates, and include terms that will not change if the contract is terminated.

The law provides that a charter school must ensure that the persons who operate the virtual charter school on a day-to-day basis comply with and carry out all applicable requirements, statutes, regulations, rules and policies of the school.

4

Maryland

Maryland law does not include any of the model law’s provisions for educational service providers. However, in practice, the state allows non-profit educational service providers to operate all or parts of charter schools.

0

Massachusetts

Massachusetts law allows all types of educational service providers, requires contracts between boards and providers, and has provisions regarding conflicts of interest.

The law requires applications submitted by proven providers (i.e., successful charter operators) to demonstrate the performance of their successful schools they propose to replicate, including academic and operational performance, and board capacity to operate additional schools.

The law provides that a charter school has to ensure that any adult that comes in contact with students, where they are an employee of the school or not, has a background check.

6

Michigan

Michigan’s statutes grant the board of a charter school the ability to enter into binding legal agreements with persons or entities as necessary for the operation, management, financing, and maintenance of the charter schools.

The law requires authorizers to review – and allows them to disapprove – any agreement between a charter school and an educational management company before such an agreement is final and valid. The law provides that disapproval may only occur if the agreement is contrary to the contract or applicable law.

Statutes prohibit specifically identified family relations between members of the board of directors and officers and members of any educational management company involved in the operation of the school (with such provisions detailed in charter contract). However, it does not require existing and potential conflicts of interest between the two entities be disclosed and explained in the charter application.

The law requires authorizers to ensure that charter school governing boards operate independently of any educational management organization.

The law requires that management agreements must require the ESP to provide the charter school board at least annually all of the same information that a school district is required to disclose under law, with such information being made available to the public via the school’s website.

The law requires all teachers and administrators working at a charter school comply with the criminal background and records checks.

6

Minnesota

Minnesota law specifies that charter schools may contract with outside entities to manage all or some aspects of the school.

The state department authorizer application and approval process requires all authorizers to have evaluation criteria for any educational service provider arrangements, but it does not specify the specific criteria.

The law requires the charter contract to include the terms of the school operations, including any educational service provider arrangements.

Minnesota law requires charter schools’ annual audits to include a copy of all charter school agreements for corporate management services and include detail the terms of the agreement, including the services provided and the annual costs for those services.

The law prohibits an individual from serving as a member of the charter school board of directors if the individual, an immediate family member, or the individual's partner is a full or part owner or a principal with a for-profit or nonprofit entity or independent contractor with whom the charter school contracts, directly or indirectly, for professional services, goods, or facilities. The law prohibits an individual from serving as a board member if an immediate family member is an employee of the school. The law provides that a violation of this prohibition renders a contract voidable at the option of the commissioner or the charter school board of directors and that a member of a charter school board of directors who violates this prohibition is individually liable to the charter school for any damage caused by the violation. The law prohibits authorizers from serving on the boards of their schools.

The law provides that contractors providing facilities, goods, or services to a charter school cannot serve on the board of directors of the charter school.

According to the law, all teachers employed or contracted to work within charter schools must be certified, with background checks being a required aspect of that.

6

Mississippi

The law provides that an educational service provider (ESP) that provides comprehensive management for a charter school must be a nonprofit education organization.

For those schools proposing to use such ESPs, state law requires them to include in their charter application evidence of the ESP’s success in serving student populations similar to their targeted population and evidence of past performance and their capacity for growth.

Within their application, statute requires them to provide a term sheet setting forth the proposed duration of the service contract, including things like the roles and responsibilities of the school board and the service provider, the scope of services, the performance evaluation measures and timelines, the compensation structure, the methods of contract oversight and performance, and the conditions for renewal and termination of the contract.

Statute provides that school governing boards operate as entities completely independent of any educational service provider.

Statute also requires applications to disclose and explain any existing or potential conflicts of interest between the charter school board and the proposed service provider.

4

Missouri

Missouri law allows contracting with all types of educational service providers.

In the case of a proposed charter school that intends to contract with an education service provider for substantial educational services or management services, the law requires the charter school applicant to:

• Provide evidence of the education service provider's success in serving student populations similar to the targeted population, including demonstrated academic achievement as well as successful management of nonacademic school functions, if applicable;
• Provide a term sheet setting forth the proposed duration of the service contract; roles and responsibilities of the governing board, the school staff, and the service provider; scope of services and resources to be provided by the service provider; performance evaluation measures and time lines; compensation structure, including clear identification of all fees to be paid to the service provider; methods of contract oversight and enforcement; investment disclosure; and conditions for renewal and termination of the contract;
• Disclose any known conflicts of interest between the school governing board and proposed service provider or any affiliated business entities;
• Disclose and explain any termination or nonrenewal of contracts for equivalent services for any other charter school in the United States within the past five years;
• Ensure that the legal counsel for the charter school shall report directly to the charter school's governing board; and
• Provide a process to ensure that the expenditures that the educational service provider intends to bill to the charter school shall receive prior approval of the governing board or its designee.

Missouri law states that charter school governing board members may not have any substantial interest in any entity employed by, or contracting with, the board. It also states that board members cannot be employees of a company that provides substantial services to the charter school and it requires them to meet financial disclosure requirements.

Missouri law states that charter schools are not exempt from criminal background checks and that all such checks are required for teachers and others coming in contact with students.

6

Nevada

Nevada laws and regulations allow charters to contract with educational service providers, require that certain information be provided in the charter application, require a performance contract between the charter and the provider, require the contract to be approved by the authorizer, require the charter to operate independently of the provider, and require conflicts of interest to be disclosed.

While the law does not require that an ESP annually provide information to its charter school governing board on how that ESP spends public funding, there are several provisions that prevent an ESP from being able to hide expenditures from a governing board or authorizer.

4

New Hampshire

New Hampshire law allows charter schools to contract with outside entities to manage the school and requires them to include the terms of any such outside contract within an addendum in the school’s charter contract, with such terms reviewed and approved by the authorizer.

Statute also specifically requires any conflict of interest between a board of trustee member and any for-profit entity in which a contract is being sought for services to be made public and requires that board member to recuse himself from any issues related to that entity. If not, the law gives the state commissioner of education the authority to void the contact and provides that the board member can be held personally liable to the charter school for any damages caused by such contract.

4

New Jersey

New Jersey’s law includes a small number of the model law’s provisions for transparency regarding educational service providers. New Jersey law specifically allows a charter school to be established by a private entity in conjunction with teachers and parents, but the law limits the role of such private entities by providing that the school’s name may not include the name of the private entity, members of the private entity cannot constitute a majority of the board, and the private entity may not realize a net profit from its operation of the school.

2

New Mexico

New Mexico law includes a small number of the model law’s provisions for educational service providers.

State law prohibits a charter school governing body from contracting with a for-profit entity for the management of the charter school.

If a charter school contracts with a third-party provider, the law requires the charter contract to include the criteria and procedures for the authorizer to review the provider's contract and the charter school's financial independence from the provider. However, it doesn’t require contracts between schools and providers, doesn’t require authorizers to approve these contracts, and doesn’t require that governing boards operate completely independent of a provider.

The law provides that a person shall not serve as a member of a governing body of a charter school if the person or an immediate family member of the person is an owner, agent of, contractor with or otherwise has a financial interest in a for-profit or nonprofit entity with which the charter school contracts directly for professional services, goods or facilities. It doesn’t require existing and potential conflicts of interest between the two entities to be disclosed and explained in the charter application, though.

2

New York

For any school that was or will be approved under the first 200 charters created by statute, New York law allows all types of educational service providers to operate all or parts of charter schools. But for any schools approved using one of the subsequent 260 charters available, the law does not allow for-profit entities to apply for a charter or to manage any schools.

New York law requires applicants seeking to partner with for-profit providers to specify the extent of their participation in the management and operation of the school within the charter application, but does not require that performance record of any provider and an explanation of the provider’s capacity for growth be included and that the material terms of the contract be approved.

Statute states that the charter school board shall have final authority for policy and operational decisions of the schools and may only delegate decision-making authority to officers and employees of the school in accordance with the provisions of the charter.

Statute requires strict conflict of interest provisions, including a prohibition on hiring for-profit entities in which board members or employees have a substantial interest. It also requires that a code of conduct policy be included in charter applications and that the proposed founding board members submit disclosure documents and handle conflicts in accordance with the approved code.

The law requires criminal background checks for all staff working in a charter school, including those from ESPs.

4

North Carolina

North Carolina law is generally silent regarding these arrangements, but the state attorney general has ruled that all types of educational service providers may operate all or parts of charter schools.

North Carolina law requires the board of directors of a charter school to adopt a conflict of interest and anti-nepotism policy that includes, at a minimum, the following:

* The requirements of Chapter 55A of the General Statutes related to conflicts of interest;
* A requirement that before any immediate family, as defined in state law, of any member of the board of directors or a charter school employee with supervisory authority shall be employed or engaged as an employee, independent contractor, or otherwise by the board of directors in any capacity, such proposed employment or engagement shall be (i) disclosed to the board of directors and (ii) approved by the board of directors in a duly called open‑session meeting. The burden of disclosure of such a conflict of interest shall be on the applicable board member or employee with supervisory authority. If the requirements of this subsection are complied with, the charter school may employ immediate family of any member of the board of directors or a charter school employee with supervisory authority.
* A requirement that a person shall not be disqualified from serving as a member of a charter school's board of directors because of the existence of a conflict of interest, so long as the person's actions comply with the school's conflict of interest policy established as provided in this subsection and applicable law.

The law requires that similar criminal history record checks and fingerprinting requirements applicable to other public schools shall also be mandatory for on-site employees of ESPs who regularly come into contact with students.

Although this information is not counted within this analysis (since these provisions are not codified in state law or state board policy), the application requires student performance, governance performance, and financial data from other schools managed by the management company and requires that the applicant must demonstrate how the management company is a good fit for the targeted student population. It requires that the proposed management agreement must be provided with the application (and approved by the authorizer), with such agreement including at least the measureable objectives whereby the charter school board can evaluate annually the performance of the management company, and if necessary, terminate the contract without significant obstacles.

The application must also discuss how the charter school board will govern the school independently of the management company and include a description of the relationship that exists between the charter school employees and the management organization. Elsewhere in the application, the applicant must describe the board’s ethical standards and procedures for identifying and addressing conflicts of interest, including the identification of any existing relationships that could pose actual or perceived conflicts if the application was approved and steps that the board will take to avoid any actual conflicts and to mitigate perceived conflicts.

Furthermore, the state board’s charter contract contains the following provisions: no member of the governing board shall be an employee of a company that provides substantial services to the charter school; the members of the nonprofit board of directors affirm that they will adhere to a duly adopted conflict of interest policy, including provisions related to nepotism; the nonprofit shall have ultimate responsibility for employment, management, dismissal and discipline of its employees and in no event shall the governing board delegate or assign its responsibility for fulfilling terms of this charter; the nonprofit shall not enter into or terminate an agreement for comprehensive management services without the prior, explicit approval of the state board; the nonprofit shall comply with all state board requests regarding the management agreement that are reasonably related to compliance with all provisions of this charter agreement and the charter school statute.

4

Ohio

Ohio law allows charter schools to contract with all types of educational service providers.

It requires all virtual charter schools, including those contracting with an educational service provider, to be approved by an authorizer and the state superintendent of public instruction. In making a decision about whether to approve a virtual charter school application, it requires the state superintendent to consider rules prescribed by the state board of education. Among other things, it requires these rules to include the educational service provider’s previous record for student performance. However, there aren’t similar requirements for brick-and-mortar schools.

State law requires school governing boards to operate independently of any educational service provider and requires existing and potential conflicts of interest between the two entities to be reported. It also prohibits charter school governing board members from being employed by an authorizer or operator.

It also requires that starting in 2016, all contracts between charter boards and management companies are collected by the state department and posted on the department’s website.

The law requires that management companies that receive more than 20% of a charter school’s revenue must provide a very detailed accounting including the nature and costs of goods and services it provides to the school.

The law requires criminal records checks of all private contract employees providing essential school services in a school.

6

Oklahoma

Oklahoma law allows all types of educational service providers and contains additional application elements specific to educational service providers that non-school district authorizers must use.

Oklahoma law provides that charter school boards have the same statutory conflict of interest requirements as noncharter school boards, which prevent school board members from being affiliated with an ESP.

Oklahoma law provides that all employees of charter schools, including employees of an ESP, must have a criminal history records check.

4

Oregon

Oregon law provides that if a charter school chooses to contract with a for-profit management organization, the school must maintain a right of control over the contractor and provide procedural safeguards to affected members of the public in relation to those aspects of the school’s operations that constitute the governmental function of providing a public education. The law does not contain similar requirements for schools that contract with non-profit providers.

As part of the criteria that local school boards must use to evaluate a proposal, the law requires them to examine the prior history, if any, of the applicant in operating a charter school or in providing educational services.

For charter schools approved by higher education institutions or for virtual charter schools that contract with a third party entity, the law includes conflict-of-interest provisions.

For virtual charter schools, the law prohibits any third party entity employees from serving on the school board and requires that school boards have access to ESP records and expenditures (including any profit margins) and prohibits any ESP employee from serving as a teacher in the charter school (and thus all teachers in a charter school are employees of that school and subject to criminal background requirements).

The aforementioned provisions do not apply to the rest of Oregon’s charter schools that may contract with an ESP.

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Pennsylvania

Pennsylvania law includes a small number of provisions regarding educational service providers. While there are no explicit statutes requiring that authorizers review and approve educational service provider arrangements and that charter school boards be independent of educational service providers, charter school governing boards contract with educational service providers in practice and case law exists which requires a fully executed management agreement to be submitted with an application if the charter school is going to use a management company.

The law's only conflict of interest provision states that an administrator in a school cannot receive compensation from a company that provides management or other services to another charter school. In addition, statute makes it clear that any administrator and trustee are public officials and subject to ethics standards and financial disclosure.

State board polices regarding cyber charter schools state that the boards of such schools may contract with an ESP, but must maintain ultimate control of the cyber charter school.

Pennsylvania law requires that all applicants for employment in public and private schools, employees of independent contractors seeking business with public and private schools, and student teacher candidates undergo background checks if they will have direct contact with students.

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Rhode Island

Rhode Island law allows charter boards to contract directly with third parties for the purchase of books, instructional materials, and any other goods and services which are not being provided by the sending school districts. Statute also requires that information be placed in charter applications regarding any support services the school plans to obtain directly from third parties and under what terms and conditions those services are to be provided, to the extent known. Rhode Island law prohibits charter schools from contracting with for-profit management organizations.

Regulations require the following within charter applications: evidence of the educational service provider’s success in serving students; terms of the service contract including the roles and responsibilities of the governing board, school staff, and the service provider; performance evaluation and enforcement measures; compensation structure and fees; methods of contract oversight; and conditions for renewal.

Regulations state that no charter school board can enter into a contract that would have the effect of reducing the board’s ultimate responsibility for the operation of the school.

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South Carolina

South Carolina law includes a small number of the model law’s provisions regarding educational service providers. South Carolina law allows a charter school board to contract for services, but does not include any of the model law’s other provisions for transparency regarding educational service providers.

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Tennessee

Tennessee law includes a small number of the model law’s provisions for educational service providers.

Tennessee law allows a charter school governing board to enter into contracts, but statute contains no provisions regarding the details of any ESP arrangements. In addition, statute specifically prohibits charter governing boards from contracting for the management or operation of the charter school with a for-profit entity.

The law provides that a chartering authority may take into consideration the past and current performance, or lack thereof, of any charter school operated by the sponsor.

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Texas

Texas law allows all types of educational service providers – or “management services companies”- to operate all or parts of charter schools.

Texas law provides that the state commissioner of education may grant a charter for an open-enrollment charter school to an applicant that is: an eligible entity that proposes to operate the charter school program of a charter operator that operates one or more charter schools in another state and with which the eligible entity is affiliated and, as determined by the commissioner in accordance with commissioner rule, has performed at a level of performance comparable to performance under the highest or second highest performance rating category under state law; or an entity that has operated one or more charter schools established under state law and, as determined by the commissioner in accordance with commissioner rule, has performed in the highest or second highest performance rating category under state law.

Texas law requires a performance contract between the independent charter school board and the service provider. The law notes that the commissioner may audit the records of a management company regarding matters directly related to the management or operation of an open-enrollment charter school, including any financial and administrative records. The law requires any management company to maintain all records related to the management services separately from any other records of the management company. Texas law requires that management services contracts between a charter school and a management services company must be pre-approved by the Texas Education Agency.

The law provides that school governing boards operate as entities completely independent of an educational service provider.

The law also includes conflict of interest provisions, requires that potential conflicts are disclosed and explained in the application, and applies ongoing disclosure requirements. State law prohibits charter schools from accepting loans from management services companies and prohibits a person with a substantial interest in a management company from serving on a charter school board. The law provides that records of an open-enrollment charter school and records of a charter holder that relate to an open-enrollment charter school are government records for all purposes under state law.

The law notes that a person may not be serve as a teacher, librarian, educational aide, administrator, or school counselor for an open-enrollment charter school unless the person has been approved by the agency following a review of the person’s national criminal history record information.

All of the above provisions are applicable to open-enrollment charter schools, but not district-authorized charter schools.

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Utah

The law permits charter schools to contract with all types of educational service providers. However, there are no statutory provisions guiding any charter application requirements for educational service providers, performance contracts between the school and service provider, authorizer approval of contracts, and school governing boards operating completely independent of any educational service provider.

Although the law does not directly address potential conflicts of interest between a charter school board and service provider, it does prohibit a charter school officer or relative of a charter school officer from having a financial interest in a contract or other transaction involving the charter school, except for a reasonable contract of employment. This prohibition addresses some but not all conflicts of interest that might arise in the context of service contracts.

Utah law requires criminal background checks on all contract employees who are employees of a staffing service or other entity who work at a public or private school under a contract.

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Virginia

Virginia law includes a small number of the model law’s provisions for educational service providers.

Virginia law allows a charter school to contract with any third party for the provision of any service activity or undertaking which the school is required to perform in order to carry out the educational program described in its charter.

The law provides that the charter application must provide disclosure of any ownership or financial interest in the charter school, by the charter applicant and the governing body, administrators, and other personnel of the proposed charter school, and a requirement that the successful applicant and the governing body, administrators, and other personnel of the charter school shall have a continuing duty to disclose such interests during the term of any charter.

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Washington

Washington statute allows for educational service providers (ESPs) to provide substantial educational services, management services, or both, but specifically states that these must be non-profit entities.

For those schools proposing to use such ESPs, state law requires them to include in their charter application evidence of the ESP’s success in serving student populations similar to their targeted population and evidence of past performance and their capacity for growth.

Within their application, statute requires them to provide a term sheet setting forth the proposed duration of the service contract, including things like the roles and responsibilities of the school board and the service provider, the scope of services, the performance evaluation measures and timelines, the compensation structure, the methods of contract oversight and performance, and the conditions for renewal and termination of the contract.

Statute provides that school governing boards operate as entities completely independent of any educational service provider. Statute also requires applications to disclose and explain any existing or potential conflicts of interest between the charter school board and the proposed service provider, but it does not specifically prohibit individuals compensated by an ESP from serving on the board, now provide governing boards with access to ESP records and funding reports. The law also requires all schools to comply with employee record check requirements, but does not address employees of ESPs that may be working in the school.

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Wisconsin

Wisconsin law includes a small number of the model law’s provisions for educational service providers.

Wisconsin law does not directly address educational service providers, but allows a contract with an individual or group to operate a charter school. The law also provides that if the City of Milwaukee contracts with an individual or group operating for profit to operate a school as a charter school, the charter school is an instrumentality of Milwaukee Public Schools (MPS) and the MPS board must employ all personnel for the charter school.

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Wyoming

Wyoming law includes a small number of the model law’s provisions for educational service providers.

Wyoming law permits charter schools to contract with any third party for services. The law does not explicitly state the need for a clear, substantive performance contract, but states that no charter school shall enter into a contract with an independent management company without the prior written consent of the district board and that the school district shall be a third-party beneficiary to any management contract approved by the district board.

Wyoming regulations state that charter school contracts for services and property are subject to the same procedures and restrictions that apply to all public schools and school districts and the same competitive bidding laws that apply to districts.

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