What is a Community/Charter School?
Ohio Community Schools (often called charter schools) are public schools that operate independently from traditional public district schools. Community/Charter schools are non-religious, nonprofit, tuition-free schools.
How Charter Schools are Created: Authorizers, Processes, etc.
“Charter Schools” in Ohio are referred to as “community schools” in the law. Ohio Revised Code Chapter 3314 creates community schools and sets out the law that governs community schools. Ohio statutes do not use the term “charter school” as most other states do. For purposes of these materials “charter school” and “community school” will be used interchangeably.
A community school is a public school. The entity is a not for profit corporation.
There are two types of community schools in Ohio: a conversion and a start-up. Most community schools in Ohio are start-ups, with approximately 80% start-ups and 20% conversions.
Conversions are created by converting all or part of a traditional public school or a building operated by an educational service center (“ESC”) to a community school. Conversions can be opened anywhere in the state.
Anyone may propose a conversion by submitting a proposal to the board of the district school or to the board of the ESC. If the board wishes to consider the idea, the board enters into a preliminary agreement with the proposing person or group. A board of directors/governing authority of the proposed school is formed and the two boards negotiate a conversion school sponsor contract. (Beginning July 1, 2017, ESC’s must have approval from the department of education to serve as sponsors.)
A start-up is created by a person or group submitting an application to a sponsor (called “authorizers” in other states and used interchangeably throughout these materials). Start-ups can only be created in certain areas of the state: the Ohio charter school pilot project area – Lucas County; challenged school districts (districts that performed poorly academically in performance index and value-added scores); the big 8 school districts (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo, and Youngstown); districts ranked in the bottom five percent in performance index scores.
- The Ohio Department of Education
- The board of education of the local school district where the school will be located;
- Joint vocational school districts
- The board of education of any other city, local or exempted village school district with territory in the county where the majority of that local school district is located
- The board of an educational service center if approved by the department of education
- The board of trustees of the thirteen state universities as long as the mission of the proposed school is demonstration of teaching practices included in the university’s teacher preparation program
- A tax-exempt entity that has operated for at least five years, has assets of at least $500,000 and a record of financial responsibility; and has been determined by the State Board of Education and the Ohio Department of Education to be an education-oriented entity with a demonstrated record of successful implementation of education programs
In response to a proposal (often called an application), a sponsor can enter into a preliminary agreement with the proposing group. The preliminary agreement is filed with the superintendent of public instruction. Plans for the school continue to be developed, including establishing a governing authority (also referred to as “Board of Directors” or “Board,” used interchangeably throughout these materials) and negotiating the sponsor contract. The sponsor contract must be adopted by the school’s governing board by March 15th, and the final sponsor contract must be signed by May 15th prior to the start of the school year.
Roles and Responsibilities of Charter School Boards
The Board of Directors of an Ohio Community School oversees the operations of the School to ensure compliance with applicable laws and Sponsor Contract requirements and in accordance with the mission and purpose of the School. Often the Board of Directors will contract with a management company: an Educational Management Organization “EMO” or a Charter Management Organization “CMO” to run the day-to-day operations of the school. CMOs are non-profit organizations that manage two or more charter schools; whereas, EMOs tend to be for-profit entities. The term “management company” is often used in general and Ohio law refers to both as “operators.” Regardless of whether a Charter School Board contracts with either an EMO or a CMO or decides to manage the school itself (often referred to as “Mom and Pops”), the responsibility for the school’s success ultimately lies with the Board.
Board member obligations derive from four main sources: 1) general corporate and non-profit board duties; 2) federal, state and local laws; 3) duties required under the charter/sponsor contract; and 4) duties pursuant to board policies.
Members of the Board of Directors of an Ohio community school, have the same general responsibilities as the directors of any Ohio non-profit corporation. Directors must perform all duties:
- Duty of Care
- Duty of Loyalty
- Duty of Compliance
- Duty to Maintain Accounts
The Duty of Care requires board members to act in good faith, in a manner they reasonably believe is in the best interest of the school, and with the same care that they would exercise in handling their own affairs. Community school board members should actively participate in governing the school and staying informed. The duty of care can be met by attending board meetings, reviewing meeting materials, asking questions, refraining from “rubber stamping,” and overseeing and evaluating administration/management.
The Duty of Loyalty requires that the interests of the school take precedence over personal (family and business) interests. Conflicts of Interest are extremely important for board members to avoid.
Over the years, increasing restrictions have been imposed on who can serve on a community school board. Currently the following individuals are prohibited from serving on a board:
- An individual who owes the state money or is in a dispute over owing the state money concerning the operation of a community school that has closed;
- An individual who has pled guilty to or been convicted of “theft in office”;
- An individual who has a disqualifying offense as listed in ORC 3319.39, which governs the criminal background checks for individuals with care, custody, and control of children;
- An individual employed by the school district of ESC that is sponsoring the school;
- An individual who is currently serving on any school district board of education
Additional limitations apply to community school board members. For example, individuals are limited to serving on five start-up community schools at one time. For one year after an individual serves on a community school board, he or she is prohibited from being employed or having an immediate relative be an employee or consultant of any sponsor or operator.
In addition to the general non-profit responsibilities, because community schools are public entities, community school board members are public officials and have the same ethical obligations of other Ohio public officials.
The Duty of Compliance broadly requires that board members remain faithful to the vision and mission of the school and comply with all laws, contracts, and policies.
The Duty to Manage Finances for community school board members is extremely important as the funds of the school are public funds and misuse of the money is often the story in the news regarding charter school officials. Community School Board Members can be held strictly liable to the state for the loss of public funds. Cordray v. Internatl. Preparatory School, 128 Ohio St.3d 50, 2010-Ohio-6136. (Strict liability means liability that does not depend on actual negligence or intent to harm; once the tort itself is proven, the liability attaches.)
Ohio community schools are required to appoint a designated fiscal officer (ORC 3314.011). The fiscal officer must be licensed in accordance with ORC 3301.074, the same licensure requirements of a traditional public district school. The fiscal officer must also have a bond conditioned for the faithful performance of all his/her official duties delivered to the board.
Unless waived by the board and approved by the community school’s sponsor, the fiscal officer must be employed or contracted directly with the board, not the EMO.
Though the designated fiscal officer usually handles a bulk of the accounting and financial duties, the board still bears the ultimate responsibility for the oversight of the finances. Thus boards should develop clear financial policies and procedures; develop budgets with clear direction to serve as a blueprint for spending; remain informed about expenditures staying mindful of the budget; and ensure maintenance of the financial records.
Governmental Immunity: Educators, Boards and Management Organizations
Ohio Community schools are entitled to sovereign immunity as ORC 2744.01(F) explicitly includes community schools as a “political subdivisions” entitled to sovereign immunity. (Though, notably, Ohio has largely abolished sovereign immunity. ORC 2744 provides limited protection from suit for political subdivisions and their employees in personal injury claims. Even this narrow protection has exceptions and allows political subdivisions and their employees to be sued for personal injury when, for example, a student was injured due to a teacher’s negligent determination of the necessary level of supervision of the student in his or her care.)
Operators and operator employees are not, however, entitled to sovereign immunity. In Cunningham v. Star Academy of Toledo, the Sixth District held that management companies and their employees are not covered by Ohio’s Sovereign Immunity Law. The Sixth District’s opinion centered on what is and is not a political subdivision and determined that community school management companies are not political subdivisions and, therefore, are not entitled to immunity. The Court held that the definition of a public subdivision does not include private, for-profit corporations that contract with a political subdivision. In Cunningham, the management company was a private, for-profit corporation that performed services for a community school. As a result, it was not a political subdivision and was not entitled to immunity under ORC 2744.
Public Accountability and Transparency: Public Funds, Public Records and Open Meetings
Ohio’s Sunshine Laws require openness and visibility in the actions of public bodies allowing the “sun to shine” on the happenings of public matters.
Sunshine laws apply to community school boards, as they are public entities.
Open Meetings Act – Ohio Revised Code 121.22
The Open Meetings Act requires public bodies to hold deliberations and conduct business in open meetings where a quorum is present.
- Public notice of meeting place and times must be provided
- Accurate minutes of meetings must be kept
- Presence of board members is required.
- A board member must be present in person in order to vote or be considered for quorum.
- Upon proper procedure, Boards can adjourn into executive session to discuss matters privately only under specific circumstances:
- personnel issues
- purchase of property
- consult with legal counsel regarding litigation
- collective bargaining
- security/emergency arrangements
- other select matters that by law require confidentiality
- Penalties for Violation: fines, injunction, attorney fees, action invalidated, etc.
Public Records Act – Ohio Revised Code 149.43
In Ohio, a public record is defined broadly as a record kept by a public office.
The Act gives people the right to inspect and receive copies of public records at reasonable times during regular business hours. The Act also disallows release of certain protected records.
- The only reference to the word “charter” in Ohio law related to schools is used when discussing non-public chartered and non-chartered schools. A chartered nonpublic school is a private school which has been granted a charter by the state Board of Education and complies with the Operating Standards for Ohio’s Schools (Ohio Administrative Code 3301-35-12). Chartered nonpublic schools are tuition-based as they do not receive state or local tax money to support them. Chartered nonpublic schools can receive state and local funds for the some administrative costs, auxiliary services and transportation. Non-chartered non-public schools choose not to be chartered by the state due to religious beliefs. Non-chartered non-public schools receive no state or local funds.
University of Akron; Bowling Green; Central State; University of Cincinnati; Cleveland State; Kent State; Miami University; Ohio State; Ohio University; Shawnee State; University of Toledo; Wright State; and Youngstown State.