Learning Curves

There is no guarantee that a revamped application process would ferret out these kind of details, however. The state would have to rely on the applicant's word because TEA would not conduct its own independent background check. The agency simply doesn't have the resources.

During the past legislative session, Education Commissioner Mike Moses told lawmakers that he needed 24 additional full-time employees at TEA to adequately oversee charter schools. The Legislature gave him only six.

Charter school oversight already is taxing TEA's financial audit division, led by Canby. In addition to the half-dozen investigations of charter schools, Canby's auditors visited 51 campuses during the 1998-99 school year to take a cursory look at their books and offer basic accounting tips. Had they not made the visits, the number of charter schools in financial straits would be even higher.

"We accomplished a tremendous amount of damage control giving free consulting advice," Canby says.

One problem Canby's auditors hope to curb is making sure charter schools are reducing their expenses accordingly if enrollment is lower than expected -- the same bug that bit Life's Beautiful. "It is rather shocking to see how a few of the charter schools -- I'm not generalizing here -- seemed oblivious to the reality of what a fewer number of students meant to their budget," Canby says.

Charter school officers should at least have an inkling of the financial challenges they face. TEA gives every new charter holder a thick three-ring binder that doubles as the state's official "charter school handbook." It covers a range of information pertaining to financial management. The books are handed out at a two-day orientation workshop that school officers are invited -- but not required -- to attend.

In Canby's professional opinion, a thick notebook and a two-day training session don't even come close to keeping a charter school financially solvent. Canby thinks state policymakers might want to consider requiring the schools to have someone on the school staff with advanced degrees in school finance.

Outlaw, who is trying to piece together the financial puzzle left by Life's Beautiful, says the state might want to require charter holders to post a bond as a condition of being awarded a school.

"If I was starting a business, I would have to show financial responsibility," he says. "A bank is not going to give me any money unless I can show I can do the job."

Placing more restrictions on people who want to start charter schools is a tricky deal for state policymakers since the concept behind charter schools is to limit regulation.

"The legislative intent was to make it easy to start a charter school," says State Representative Joe Nixon of west Houston. He is on the board of Houston Advantage, a charter school scheduled to open this fall. "Charter schools are not intended to be mini-replicas of public schools," says Nixon. "They also are not designed to set up a new structure of administration and overhead and forms that need to be filled out. What we don't want to see is an application process that is so arduous and full of red tape that it would take years for any charter to be approved."

No process is perfect. Even though the first 20 charter applicants were interviewed by the Board of Education, a bad one slipped through. Cypress Lodge in East Texas never opened, although it gladly accepted checks from the state -- about $240,000 worth. The Texas attorney general has been trying to recover that money for more than two years. The state learned its lesson and now pays a charter school only after it opens.

The motto at YES College Preparatory School, an exemplary charter school just east of downtown Houston, is "Whatever It Takes." It's a message to the school's nearly 400 students. It takes hard work, strict discipline and respect for others to get the full benefit of what school has to offer. It takes braving the rigors of what its founder calls "the hardest school in Houston" in order to survive the rigors of the college experience that lies ahead.

"Whatever It Takes" also is a message to those who operate the charter school.

"I don't want to come across as cocky, but it takes some brains to pull this off," says Christopher Barbic, the school's founder and director. "It takes more than good intentions and a good heart."

For one thing, it takes money.

Unlike other charter schools, YES College Prep raises several hundred thousand dollars a year from foundations, corporations and other sources to assist its well-rounded educational program.

Among other things, the money helps to send students on extensive field trips. Last year, tenth graders visited Boston and New York and toured Harvard, the Massachusetts Institute of Technology, Columbia University and New York University.

Extra funds pay for Saturday cultural enrichment classes, which students are required to attend twice a month. And it pays for extra supplies and food to keep students well-stocked and well-nourished.

YES employs one teacher who spends half of the work day promoting the school and soliciting contributions. The investment has paid off. For example, students now have access to 100 used laptop computers, donated by the Arthur Andersen consulting firm.