Okay, when Rob Kremer speaks on this whole Connections Academy (CA) ordeal, I listen. He writes well, gets to the point, and is clear. Plus, he is just a nice guy. Here is his response to one of our Oregon Connections Academy (ORCA) parents who asked him to spell out the funding smokescreen that some representatives are making. I know his response is long but hey, it had my attention the whole time and truly spells out the money flow of ORCA compared to regular public schools, as well as the difference in education quality.
"Senator Johnson:
I spoke with Paula Foster today about your recent phone conversation with her about SB 767. Thank you very much for taking the time to call her.
Paula relayed to me the questions and concerns that you have surrounding virtual charter schools in general and Oregon Connections Academy (ORCA) in particular, because she thought I might be able to provide some answers and information that might address your concerns. I have worked with Connections Academy as a consultant since it got started in 2005, and I have worked on behalf of charter schools in Oregon since 1997.
Paula said that your number one concern was about the financial transparency and accountability of virtual schools, especially given the state's budget struggles. I'll separate my comments on this into two general categories: 1) Financial reporting requirements - Do we know where the public funds go?; and 2) Are we getting good value for the public funds spent on virtual school students compared to other types of public schooling?
1) Financial Reporting and accountability
Virtual charters have very rigorous financial reporting requirements. Prior to the start of each school year, a budget for the coming year is prepared, approved by the ORCA board, and submitted to the Scio School District. The budget gives clear detail where all the funds will go - teacher compensation, other staff, curriculum materials sent to homes, technology, and the management fee paid to the service provider, etc.
Also, as a charter school, ORCA must provide monthly financial reports to its sponsor as specified in the charter contract. For ORCA, the monthly reports include balance sheet, income statement, detail of every financial transaction, reports on student count and calculation of ADMw, accounts payable and receivable.
In addition, ORCA has an annual outside financial audit conducted by a municipal audit firm. The audit is public information (I'd be happy to provide you with the most current one.)
Finally, ORCA has an annual evaluation conducted by an outside evaluator. Last year it was conducted by the Portland State University Center for Student Success. This evaluation looks at lots of issues other than financial, but it is very
rigorous, and includes a site visit by a team of professional education evaluators.
Given all these reporting requirements and evaluations, I don't think it is an overstatement to say that there is more detailed and comprehensive publicly available information about ORCA than for any public school in the state. No other type of public school to my knowledge has both an annual audit and an annual outside evaluation.
Nevertheless, one recurring comment from the State Board of Education and from the Senate Education Committee has been complimenting ORCA on providing additional detail on its operations whenever asked. And if you would like to see anything not listed above, I am sure they would be more than happy to provide it.
2) Is ORCA delivering good value to the taxpayer?
It is roundly acknowledged that ORCA's students are doing very well academically. There is almost no dispute on this - the State Board of Education and the Senate Education Committee both complimented ORCA for its results.
The question of the level of funding, however, has been raised. It is absolutely fair to ask the questions: Is it a lot less expensive to teach students in a virtual environment? And is the funding that ORCA receives (90-95% of ADM) generating a windfall for the for-profit service provider?
First, I want to point out that ORCA's funding level of 90-95% comes to about $5,800 per student in all-funds spending. Brick and mortar schools in Oregon spend far more than this - the average all-funds spending in Oregon is in excess of $10,000 per student. I have pasted below a table with the per-student spending figures for three school districts in your Senate district. These districts all happen to be a little below the state average in per-student spending, but they are still well above what is spent by ORCA.
So ORCA is delivering a product that is indisputably succeeding academically, and doing it for a total cost per student of roughly 60% of the statewide average cost.
The reason for the cost difference is not too hard to discern: virtual schools don't have debt service associated with facilities costs, nor do they have transportation costs. The student/teacher ratio in virtuals is higher, of course (roughly double) but virtuals tend also to not have as many non-teaching professionals on staff. The cost savings from the higher student/teacher ratio is offset to a large degree by larger expenditure on curriculum materials and technology associated costs.
So ORCA, like other virtuals, spend considerably less per-student than "brick and mortar" public schools. Yes, they are funded at almost full ADM, but as you know, ADM constitutes only about 60% of the total revenues to Oregon school districts. Virtuals must survive solely on their ADM funds.
That said, another question that has come up repeatedly in hearings is whether the for-profit service providers that partner with virtual charter schools are enjoying a "windfall" at the expense of the Oregon taxpayer. Some people have objected to public funds going to for profit corporations to pay for their educational services.
In reality, the public funds that go to the for-profit service providers who partner with virtual schools is no different than funds school districts spend on curriculum, technology, school construction, materials and supplies of all sorts, and various types of outside consultants. In all my years dealing with education issues, I have never once heard anyone ask whether any of these for-profit companies were receiving a "windfall" because of the business they did with school districts.
In the case of ORCA, the payments to the for-profit Connections Academy LLC is for specific supplies and services that are negotiated at an arm's length. Each enrolled student receives several boxes worth of curriculum materials each year – texts, hands on activities, science experiment materials, etc. These are purchased from Connections Academy LLC, just as any school district would purchase its curriculum from a for-profit textbook provider like Harcourt Brace.
Similarly, ORCA buys its computer systems from Connections. Recently, one of the ORCA board members who works in computer supply put the ORCA technology purchase out for a cost comparison, and found that what Connections Academy LLC was charging was quite a bit better than available through regular supply channels.
In 2006, a study was commissioned by the Bellsouth Foundation looking at the cost of virtual schooling. It found that the per-student cost for a full time virtual school depended on the quality of the program (not surprising) but that the cost range was about $7,500 per student for a high quality program, down to about $3,650 for a lower quality program. Here is a link to the study: http://www.inacol. org/resources/ docs/Costs& Funding.pdf
I realize this has been a long response to your concerns, but I wanted to be comprehensive. I'd be happy to talk with you personally about any of the information I have provided. In summary, I will say that ORCA is probably the most scrutinized, most accountable and most efficient education delivery model in the state of Oregon.
Thank you for your time, and your thoughtful consideration.
Rob Kremer
Below is the cost comparison between the Columbia County districts and ORCA. Capital projects funds were not included in the comparison, but debt service was included. To include them both would be double counting.
Per-Student Spending Comparison
Ranier, Scappoose and St. Helens School Districts
Rainier SD 2007-08 Actual Expenditures (From ODE web site)
Fund 100 - General Fund $9,096,432.00
Fund 200 - Special Revenue Fund $1,668,824.00
Fund 300 - Debt Service Funds $339,687.00
Fund 400 - Capital Projects Funds
Fund 700 - Trust and Agency Funds $181,375.00
$11,286,318. 00
October 1 Enrollment, full time students 1170
Spending per student $9,646.43
Scappoose SD 2007-08 Actual Expenditures (From ODE Web site)
Fund 100 - General Fund 15,754,525
Fund 200 - Special Revenue Fund 1,906,377
Fund 300 - Debt Service Funds 547,035
Fund 400 - Capital Projects Funds
Fund 700 - Trust and Agency Funds 54,736
$18,262,673. 00
October 1 Enrollment, full time students 2145
Spending per student $8,514.07
St. Helens SD 2007-08 Actual Expenditures (From ODE Web site)
Fund 100 - General Fund 27,922,463
Fund 200 - Special Revenue Fund 3,775,384
Fund 300 - Debt Service Funds 3,135,136
Fund 400 - Capital Projects Funds
Fund 700 - Trust and Agency Funds $0.00
$34,832,983. 00
October 1 Enrollment, full time students 3527
Spending per student $9,876.09
Cost per-student for ORCA: $5,800.00"
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