ASU Prep schools could lose millions in funding over state Education Department error

The Arizona Department of Education wants schools to repay funding from previous years

Multiple locations of ASU Preparatory Academy could lose millions of dollars in funding after the Arizona Department of Education said that the money was inappropriately allocated to the schools over the last several years. 

The department, under Arizona Superintendent Kathy Hoffman, told the schools last month that they are ineligible to receive "small school weight funding," or funding reserved for schools with fewer than 600 students, after channeling that funding into ASU Prep under former superintendents. 

The ASU Prep schools, a tuition-free network of charter schools in Arizona, have a cumulative enrollment exceeding 2,100 students.

The designation of small school weight is typically related to the sponsorship of the Arizona State Board of Charter Schools. ASU Prep schools are among the only schools in Arizona to be chartered but not sponsored by the board to receive funding, Arizona Department of Education Spokesperson Stefan Swiat said, pointing out that the situation is "very rare."

"As far as I know, ASU Prep is unique in that it is the only charter holder that is not sponsored by the Charter Board from receiving funding," Swiat said. 

The State Board did not immediately respond to request for comment. 

The Arizona Charter Schools Association, a private group that represents the state’s charter schools, sided with ASU Prep, saying that the network of charter schools is being treated unfairly "through no fault of their own."

"We support ASU Prep and believe there needs to be a resolution that protects the funding for the school’s teachers and students," said Jake Logan, CEO of the Association.

Beatriz Rendón, the CEO of the ASU Preparatory Academies, wrote in a letter sent to the Arizona Department of Education at the end of March that the department was bound by its original decision to fund the schools made under the previous administration. 

"We think ADE’s prior decision was the right decision and should be reaffirmed," Rendón wrote. "But if ADE insists on this new position even though it is wrong and even though it is flatly contrary to the 2015 determination, ADE is equitably estopped from implementing it."

"ADE cannot now change course because ASU Prep was reasonably entitled to and did rely on the 2015 determination," the letter said, demanding that if the department does enforce the changes, it do so by phasing them in over a three-year period instead of implementing them suddenly. 

In the letter, Rendón included a screen capture of an email from 2015 confirming the decision by the department at that time to provide the small school weight funding.

The same email noted that "it is evident that the language is a bit unclear," referring to the characterization of a small weight school.

Rendón also made note of a letter from May 15, 2015 from the Department of Education and the Arizona State Board of Charter Schools that said that charter-holding schools like ASU Prep "appear to be exempt from the reduction and subsequent elimination of Small School Weight."

"It is fundamentally unfair to require the repayment of all of the small school weight monies, over $5 million, that ASU Prep has used to provide a quality education to students across our state and to support the teachers and staff who make that possible," Rendón wrote. "It is also legally impermissible."

Swiat pointed to a 2015 opinion by Attorney General Mark Brnovich as a determinant that ASU Prep is no longer eligible for the funding in question. 

The opinion, released on June 24, 2015, states that the classification of small school weight is dependent upon enrollment numbers, not the number of charters held.

Brnovich also differentiated between schools that hold separate charters and schools that share a charter, saying that the former could qualify as a small weight school if each school had fewer than 600 students, while the latter would not if the total enrollment of all the schools exceeded that number.

On top of losing hundreds of thousands of dollars in funding immediately, the schools are expected to pay back money that they received under the program. 

"State law, 15-915, determines that if there is a miscalculation, the Superintendent shall correct the amount of state aid," Swiat said in a written statement. 

Rendón said the funding loss comes at a critical time for the schools. 

"ASU Prep just started its state testing, and graduation is around the corner," Rendón wrote. "Student outcomes will certainly be affected by any disruption to the current educational environment."

Rendón wrote in the statement that students will be saddled with the consequences of the cuts in funding, negatively impacting their potential for success. 

"ASU Prep's student population is particularly vulnerable," Rendón wrote. "It is largely comprised of students who are eligible for free and reduced lunch. Their families do not have the economic resources to 'make up' for discontinued services by seeking tutors or other extra-school services ... This is not hyperbole." 

The schools appealed the decision, which will lead to an internal settlement conference in the coming weeks, according to Swiat. After that conference, they could receive funds related to their appeal. 

"They will also have a settlement from their appeal which will provide relief from financial hardship," Swiat said. 


Reach the reporters at isaac.windes@asu.edu and vandana.ravikumar@asu.edu or follow @isaacdwindes and @vandana_rav on Twitter.

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