In Miami-Dade and Broward, about two in three charter schools are run by management companies, which charge fees ranging from 5 to 18 percent of a schools income. These fees can exceed $1 million a year at a large charter school.
Some management companies handle only school finances, while others control the budget, hiring and the curriculum.
In some cases, the managers effectively take over the schools, using financial leverage to render the schools governing boards irrelevant, said Pam Hackett, a retired legislative aide who has served on the boards of five Broward County charter schools.
They push the little guy into a corner where they cant afford to do anything but acquiesce or go out of business, Hackett said.
Two years ago, Hackett sparred with the Leona Group, a Michigan-based management company, after the company removed a popular principal from two affiliated Hollywood charter schools on whose board she serves Sunshine Elementary and Paragon Academy of Technology. When the board tried to rehire the principal, the management company objected, saying it alone had that power.
They basically told us: According to the contract, we can do whatever we want, Hackett said.
The board had other complaints with Leona: The management company refused to provide school records, including contracts and spending documents, and failed to follow the schools education plan, school officials said. The board canceled Leonas contract in July 2009.
When school officials later tried to access the schools bank accounts, Leona refused to give up the money and its lawyer accused them of attempting to steal it, court records show.
Leona is committed to criminally prosecuting those individuals responsible for their attempted theft from the account, attorney Jeffrey Wood wrote in a letter to the schools attorney. The dispute is now in litigation.
Leona executives did not return phone calls seeking comment.
Hackett says the schools now operate without any for-profit managers; instead, the principals make all financial and educational decisions. Overall, its cheaper and more efficient and more accountable, she said.
Many charter schools depend on management companies not just for expertise, but for cash. Schools often borrow money from the managers, creating an uneasy arrangement that can stifle a governing boards independent oversight.
The Leona Group, for example, gave more than $360,000 to four Broward charter schools money described as gifts in the schools financial reports. But in court papers, the management company said the payments were really loans disguised as gifts to make the schools appear financially sound.
The funds were referred to as a one-time gift so that the schools would not have to show the funds on their balance sheets, the management companys lawyers wrote. The schools insist the payments were gifts, not loans.
It is not uncommon for management companies to give or lend money to schools to get them up and running, said Jonathan Hage, president of Charter Schools USA of Fort Lauderdale, one of the regions largest charter school operators.
Most charter schools lose money in the first year or two as they try to expand enrollment while paying rent, construction costs and other start-up expenses, he said. In addition, new charter schools often find it difficult to get financing from banks.