Editorial: A tough lesson in school fraud case

Early this week, the former director of a Minneapolis Native American charter school appeared in court, accused of embezzling $1.3 million from the program.

Joel Pourier allegedly diverted public funds from the Oh Day Aki/Heart of the Earth school for his own personal use between 2003 until 2008. Last year, the school's sponsor, Minneapolis Public Schools (MPS), closed the program when a long overdue audit found financial discrepancies.

So who was asleep at the switch here? And what does this case say about charter school finances generally?

Even before Pourier's tenure, Heart of the Earth had financial, academic and management troubles. Started in the 1970s as an alternative public school, its mission was to offer culturally sensitive schooling to help Indian kids.

Over the years the school board came close to shutting down the program several times, but it kept getting reprieves. The school became a charter program in 1999 but continued to have difficulty with financial and academic reporting.

Pourier was hired as financial director and had some success cleaning up some of those problems, prompting the independent charter board to promote him to director. Because they trusted him, they failed to check Pourier's credentials or question his financial reporting. It turns out he did not earn the degrees he claimed and is not a member of the Indian band that he said provided his personal wealth.

The Minneapolis school board should have been more courageous over the years in demanding accountability. Fearing a damaged relationship with the city's Native American community, board members also failed to follow through.

Fortunately, charter school laws passed this year by the Minnesota Legislature should help. Lawmakers adopted rules that will increase oversight, close loopholes and have clearer guidelines to prevent sloppy management or theft. The law requires training for charter board members, tougher rules against conflicts of interest and stricter guidelines for school sponsors.

But even those changes don't go far enough for some critics. Local think tank Minnesota 2020 issued a report questioning the finances of many charter programs. It concludes that the state should reconsider whether charter schools are worthy of public funding at all. And a St. Paul legislator said he plans to introduce even tougher reform next year, including a two-year moratorium on new charters.

It's important to note that only a handful of charter school failures have involved fraud and that traditional schools have had similar problems. The state Department of Education has given about a third of all charters awards for financial management. And a 2008 legislative auditor's report found that many of the state's then 144 charter programs were in good financial shape, but that a number of them need work on governance and accountability. Many of the recently passed state reforms were based on that report.