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12/12/2017 11:21 AM
Pennsylvania House of Representatives
http://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20170&cosponId=23458
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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: March 30, 2017 03:21 PM
From: Representative Mark Longietti
To: All House members
Subject: Financial accountability for contractors that provide management, educational or administrative services to public school entities including school districts, charter and cyber charter schools legislation
 
In the near future, I will be introducing legislation to protect students and taxpayers by requiring adequate transparency and financial accountability for contractors. This would include for-profit management companies that provide management, educational or administrative services to public school entities including school districts, charter and cyber charter schools.

Generally, a private organization or firm that manages public schools, including district and charter public schools, is referred to as an Education Management Organization (EMO) or a Charter Management Organization (CMO). Contracts detail the services these private companies are to provide. Research has revealed that some states do not allow private companies to manage their public school entities and/or contracts are carefully scrutinized by the authorizer or oversight body. This is likely because excessive management company contracts can result in excessive fees, salaries, and inefficient spending.

Currently, Pennsylvania law is deficient on placing limits paid and contracts made with management companies which can result in profit-making with public education dollars. Moreover, management company fees increase a school’s administrative costs and result in less money being available to educate the students.

In addition, unless specifically provided for in statute, it is difficult for authorizers, oversight bodies, and the taxpayers to see how their money is spent by these private companies.

This legislation would require much more disclosure of financial documentation from for-profit and nonprofit management organizations, and would limit the amount of overhead they charge. Management organizations would only be permitted to charge no more than 5% of the tuition charge per student enrolled.

I hope you will join me in co-sponsoring this important piece of legislation.
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Introduced as HB1201