We all make mistakes. You know how sometimes you misplace a $20 bill? You are sure you left it on top of your dresser. But it’s not there. It happens.
Don Wiener of the Center for Media and Democracy writes that KIPP can’t identify what happened to $52 million. It’s not on the dresser. Where might it be?
Wiener writes:
Roughly 7% of public school students nationwide now attend charter schools, and while traditional public school enrollment has declined, enrollment in charter schools is increasing every year, according to the Pew Research Center.
The Knowledge is Power Program — known as KIPP — is one of the largest charter school networks in the country, operating 278 K–12 “college-preparatory” schools nationwide. More than half of these schools are concentrated in six locations: Texas, Los Angeles, the District of Columbia, New York City, the San Francisco Bay Area, and Atlanta.
A Center for Media and Democracy (CMD) review of KIPP’s fiscal year 2023 IRS filings reveals that its schools in the U.S. reported more than $52 million in unexplained spending under the category “all other expenses.”
“The lack of transparency in charter schools and their [management organizations] invites profiteering, grift, and fraud,” said Carol Burris, executive director of the Network for Public Education.
Founded in 1994, KIPP has been criticized for high teacher turnover, closing selected schools because of low graduation rates and low test scores, and exaggerating the college graduation rate of its students. KIPP has also been accused of over-reporting its primary and secondary school graduation rates by not counting many of the students who drop out along the way.
KIPP’s lack of transparency in reporting how it spends taxpayer dollars is notable. “Since its revenue from taxpayers is commingled with its revenues from wealthy charter school advocates and the foundations they control, there is no way to sort out how much taxpayer money has directly gone into luxurious trips for KIPP employees,” wrote Lisa Graves, CMD’s former director and current board president, in a 2016 study.
In her review of previously unreleased documents, Graves found that in addition to spending on already notoriously high salaries for school managers, KIPP’s central office was paying for expensive resort vacations and trips to Disney World for staff members, for example.
In 2022, a KIPP official in Washington, D.C., embezzled $2.2 million to buy automobiles and other items for personal use.
Insight into how KIPP schools spend taxpayer money should be readily available from the annual IRS 990 forms that all nonprofits file detailing their revenue and expenses, management, and governance. But in its IRS filings, KIPP consistently lumps together large unidentified expenditures in the single “all other expenses” line item.
Clearly listed expenses fall into ordinary categories such as personnel salary and benefits; student expenses; occupancy expenses; office expenses; and general expenses, such as insurance. Payments to contractors are also listed.
For the 2022–23 academic year, each of the 278 KIPP schools averaged $151,000 in “other” or unitemized expenses. The network’s nonprofit charter management organization (CMO) does not explain how that $52 million was spent.
“These findings do not surprise me at all,” said Burris, who has researched the charter school world for years. “Charter chains like KIPP create related organizations, divide salaries between individual schools and the CMO, and at times will even create for-profit related entities, making it impossible to understand how money is spent.”
Even though audits can help provide more information, they generally “do not include real detail,” Burris added. “This contrasts with public school districts that present detailed budgets and where any expenditure can be viewed with a FOIA [Freedom of Information Act request], no matter how small.”
The 11 charter schools in the Kipp Metro Atlanta Collaborative reported total expenses of $112.7 million. Of that, almost $11 million — approximately $1 million per school — is listed under “all other expenses.”
The IRS requires that each of the “other expenses” be itemized if the total in that category accounts for more than 10% of total expenses. As with many other KIPP schools, the “all other expenses” reported for Atlanta’s charter network fall just shy of the threshold for itemization.
IRS filings for the 2022–23 school year show the KIPP Texas network spent a total of almost $481 million, with almost $6.5 million of that reported as “all other expenses.”
For the same school year, Kipp Social Public Schools in Los Angeles reported almost $4 million in “all other expenses,” with a total of $195 million in overall expenses for its 23 schools.
Given this leeway in IRS reporting, there is no way to confirm whether taxpayer money is being used for extravagant travel or is otherwise spent inappropriately at some KIPP schools.