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Study: Majority Of Arizona Charter School Owners Awarding Contracts To Family Businesses

It’s not illegal, but financial analysts have found that charter schools that use taxpayer dollars for “related-party transactions” are acting unfairly.

Because charter schools receive more than $1 billion in taxpayer dollars under free-market principles, the Grand Canyon Institute set out to see how economic freedom works for Arizona’s more than 500 charter schools.

Dave Wells led the research team, which scoured four years of financials from the IRS, Department of Education, and the State Charter School Board. 

“Three out of four charter holders are engaged in financial irregularities that would not be tolerated in district schools,” he said.  And, in some cases he said, “would be downright illegal.”

By “irregularities,” he said he found most charter-school owners were reportedly buying services or goods from businesses they own — or a close family relative owned.

In one case, a charter school paid $12 million dollars for a management learning software system. They compared that to public schools and found, in Mesa Unified School District, they were spending less than a million dollars for the same learning software.

“Somebody should be asking whether that’s an appropriate expense or not,” he demanded.

Appropriate or not, it is legal under state statues, and Eileen Sigmund with the Arizona Charter Schools Association said the report ignores what matters most.

“Student success,” she said passionately, before adding, “That is absolutely no coincidence because for the last three years, Arizona charter students, in all racial and ethnic groups, are outperforming their peers.”

Wells reminded that the study was not focused on the academic achievements of charter school students, but since she brought it up he pointed out that many of those high performing schools did not fall in the 77 percent of charter schools that appear to be abusing the open-market system.

Holliday Moore is a native Arizonan and veteran journalist who joined KJZZ’s news team in January 2017.Moore graduated from Arizona State University after double majoring in mass communications and marketing/management. She spent her first two decades reporting for television news, beginning in small markets and working up to congressional correspondent in Washington, D.C., for a political news service.Family commitments in Arizona brought her back to the Southwest, where she covered legislative and court beats for Albuquerque’s KRQE-TV and the infamous Four Corner Manhunt as KREZ-TV’s managing editor.Back home in Phoenix, she developed ABC15’s “Democracy Project,” now instituted at all Scripps’ news stations nationwide. Her work garnered “Best Practices” recognition by the Poynter Institute and the prestigious Walter Cronkite Award for Excellence in Television Political Journalism.Her television reports, from sports to cultural issues, earned her multiple Emmy and Associated Press nominations, including a Rocky Mountain Emmy for her Hopi Partition Land Act coverage.As she started a family, Moore started her own media production agency, producing magazine-style travel stories for the Emmy-winning Arizona Highways Television show while working part time for a Valley radio station. She is convinced radio is where visual, sound, and print are merging through deeper storytelling. In her relatively short time with radio network affiliates, she has won four Edward R. Murrow Awards and multiple nominations from other professional news societies.Moore now teaches advanced broadcast writing to the next generation of reporters at ASU’s Walter Cronkite School of Journalism and Mass Communication, where a high percentage have gone on to receive national awards for their work in her class. She enjoys being back home near childhood friends and sharing the beautiful Arizona desert with her husband and young son.