Report finds EMO contract language lacking

The staff evaluation recommends terminating the contracts at most if not all schools, finding that all but 14 failed to meet academic benchmarks.

by Paul Socolar

A report prepared by District staff evaluating the performance of six “education management organizations” (EMOs) that run 41 Philadelphia schools found that the EMO contracts failed to protect against misuse of federal funds or to ensure compliance with government mandates protecting special needs students at those schools.

The staff report, prepared for the School Reform Commission, recommends either that the existing EMO contracts all be allowed to expire on June 30, 2007, or that the contracts end at all but the 14 schools that have met academic performance targets. And it urges that any new contracts be for only two years and include strict compliance mechanisms.

Existing District-EMO contracts, the report said, did not ensure that the schools deliver the required services to special education students and English language learners.The contracts treated the delivery of services for English language learners as if it was optional, despite legal mandates.

The SRC declined to officially release the report on advice of the District's Office of General Counsel, despite numerous requests for its release. Copies were obtained by some news organizations, including the Notebook.

SRC members have said they aim to decide by May about whether to renew contracts with any or all of the District's six EMOs (Edison Schools, Victory Schools, Foundations Inc., Universal Companies, Temple University, and the University of Pennsylvania).

The issue of privatized school management has been a contentious one for the SRC. Of the four members who have been part of the deliberations, two are generally supportive of the use of outside management companies and two members are critical.

The report looks at the District's experience with EMOs through the framework of the 2002 SRC resolution known as “SRC-10,” which assigned outside managers to 46 elementary and middle schools. Edison was put in charge of the most – 20 schools.

Originally paid anywhere from $450 to $881 extra per student for their work, these providers took over a host of core school functions including choosing their curriculum, designing assessment systems, and providing professional development for their teachers. SRC Resolution 10 and subsequent contracts with the managers spelled out a series of indicators and requirements against which the EMOs could be assessed – with an emphasis on test score performance.

The District staff report notes that two earlier studies questioned whether the performance gains at privately managed schools justified the continuation of EMO contracts. “Given the credible research-based findings of these reports, the SRC should consider not renewing EMO contracts,” the report states.

It goes on to say that if new contracts are granted to EMOs for schools that are meeting performance targets, they should “mandate specific annual benchmarks and quarterly reviews and clarify the allocation of responsibility for compliance with all applicable legal requirements for special education and ELL instruction.”

On finances, the report recommends more extensive reporting requirements for EMOs, noting a variety of issues of noncompliance with federal Title I requirements. Title I funds received by EMO schools since 2002 total $108.4 million, on top of $107 million in management fees paid to the EMOs.