New Zealand: Charter School Corruption

The U.S. is home to the largest number of privately-operated charter schools in the world (about 7,400). While they take different forms and are called different things, charter schools also exist in much smaller numbers in New Zealand, England, United Arab Emirates, Australia, and Canada.

Charter schools are privatized, marketized, corporatized school arrangements buttressed by the ideologies of individualism, consumerism, and competition. Charter school promoters openly, frequently, and publicly embrace “free market” ideology and see no problems with an obsolete “survival of the fittest” outlook; they are comfortable with a win-lose perspective. ((See 5,000 Charter Schools Closed in 30 Years, September 18, 2021.))

Since privatization produces the same problems everywhere, charter schools everywhere are often riddled with fraud, corruption, and scandal—more than what is typical and standard in most sectors and institutions.

One of the most common and persistent forms of corruption in the crisis-prone charter school sector is the misuse and mismanagement of public funds by owners of capital. Charter school owners, operators, and managers regularly “innovate” new ways to funnel public funds into private hands, which is bound to happen when schools operate mainly for financial gain instead of operating to meet social needs.

Every week, the news is full of articles on financial malfeasance and mismanagement in charter schools, especially in the U.S.

New Zealand is no different. A recent audit of two former charter schools by the New Zealand Office of the Auditor General examined “$450,000 in management fees the Combined Establishment Board of South Auckland Middle School and Middle School West Auckland paid to Villa Education Trust in 2018.” Not surprisingly, and as is so often the case with charter schools elsewhere, “The trustees of the Establishment Board were also the trustees of Villa Education Trust, which was the sponsor for the charter schools. This meant that the trustees were effectively wearing two hats.” This is what many charter school researchers have repeatedly identified as “self-dealing” and “shady arrangements” in the charter school sector.

“Such an obvious mishandling of public money that should be spent on benefiting the schools, educators and tamariki is shameful and the Board needs to be held to account,” said Liam Rutherford, president of New Zealand’s largest education union

Accountability in general, and financial accountability in particular, have always been weak in the charter school sector. In the U.S., even the National Association of Charter School Authorizers, a major advocate of privately-operated charter schools, has indicated on numerous occasions that weak accountability characterizes the charter school sector. This goes hand in hand with poor transparency.

A 2021 report by the Network for Public Education (NPE) reminds the public that non-profit and for-profit charter schools, unlike public schools, operate for financial gain. Such schools typically “maximize their profits through self-dealing, excessive fees, real estate transactions, and under-serving students who need the most expensive services”.  In short, charter schools are plagued by many conflicts of interest, unethical practices, and irresponsible behaviors.

Charter schools in New Zealand, also known as “Partnership Schools” or Kura Hourua, were terminated at the end of 2018 because of all the problems associated with them.

Shawgi Tell is author of the book Charter School Report Card. He can be reached at Read other articles by Shawgi.