What is the EAA? Part 2, management and finances

The Education Achievement Authority (EAA) is a state takeover district currently running 15 Detroit schools.  As we discussed, the EAA has been controversial, it's instructional methods focus on use of a one-size-fits-all computer program in place of teacher autonomy, and it's results have been difficult to measure at best.  What is the EAA? Part 1, methods and results, Okemos Parents for Schools, December 11, 2013. The EAA has also faced management and financial challenges despite having access to revenues not available to public schools.  While the state is dissolving public schools with financial difficulties, the EAA has been propped up with special deals. 


by Detroit Free Press

The Chancellor of the EAA, John Covington, came to the EAA after heading up a public school district in Kansas City. One Michigan blogger wrote that Covington "faked a conflict with his former employer to get out of his contract" in Kansas City and "could make as much as $1.4 million in four years" at the EAA.  New Education Achievement Authority leader’s former school district loses its accreditation, Eclectablog, September 21, 2011.  Covington's tenure in Kansas City was a rocky one.  Covington oversaw closure of nearly half the schools in the Kansas City district.  Board strips Kansas City schools' accreditation, MSNBCNews.com, September 20, 2011.  As he was leaving, the district he oversaw was flailing on almost all measures of performance, "the district met only three of the 14 standards in the state's annual performance report, down from four in 2010."  Id. Less than a month after Covington left, the Missouri state board of education voted to strip the schools of its accreditation.  Id.  Recently, the EAA board "voted to hire Interactive Learning Systems LLC of Columbia, S.C., as an 'executive coach' for" Covington.  EAA collapsing, The Michigan Citizen, December 12, 2013.

Over the past year our state government has been extremely strict with public schools which have financial difficulties.  After K-12 funding was slashed in the beginning of the Snyder administration, many districts felt the financial squeeze.  Saginaw Buena Vista had trouble making its payroll and was ultimately dissolved.  Buena Vista School District is no more; students to attend Saginaw, Bridgeport-Spaulding, Frankenmuth schools, MLive.com, July 31, 2013.  Next the Inkster Public School district was dissolved.  Inkster schools first to be dissolved; students split across 4 districts, MLive.com, July 26, 2013.  Pontiac Public Schools were on the verge of being dissolved, but ended up entering into a consent agreement with the state.  In all, 50 school districts ended the year with deficits, but haven't been given special funds by the state.  50 Michigan school districts ended 2012-2013 fiscal year in deficit, MLive.com, December 12, 2013.

Conversely, from its inception the EAA has had access to multiple unconventional revenue sources, most not available to public districts.  The EAA took over buildings paid for by the public school districts they were taken from.  The EAA funneled $12 million in loans from the state through the Detroit Public School district which is itself experiencing financial difficulties.  Snyder transformation manager defends financing, mission of Education Achievement Authority, Crains, May 22, 2013. The EAA Board did not approve this massive borrowing, and in fact was not even notified.  Id. The state also outright spent $10 million on improvements to EAA schools.  Id. The EAA also has a special charitable foundation soliciting funds to run the school.  Id. The EAA won't disclose who its private donors are, or how much they give.  The EAA also requested another $2 million loan from the state.  Education Achievement Authority requests $2M advance to fix online glitches, Detroit Free Press, January 11, 2013.  Initially, the EAA claimed this was for technology upgrades, but "Emails also reveal that when DPS called in part of the loan, the EAA couldn’t pay and had to ask for an advance on state aid, which it received."  FOIA documents reveal financial troubles, loans for Education Achievement Authority, Michigan Radio, April 26, 2013.  No public school in the state has been given aid of this kind.  The EAA also pays teachers lower wages and does not contribute to the Michigan Public School Employees Retirement System for current employees, and does not have any legacy costs.

Nonetheless, the EAA has continued to struggle financially, and it's prospects are dim going forward.  The EAA, like public schools in Michigan, receives the core of its funding on a per pupil basis from the state.  However, students are fleeing the EAA in droves.

Michigan’s Education Achievement Authority has lost nearly a quarter of its students in the past year, a dramatic dip in its second year of operating 15 low-performing schools in Detroit.

The EAA, a statewide district formed by Gov. Rick Snyder in 2011 to take over failing schools, enrolled 7,589 students in K-12 at its 15 schools — 2,369 fewer than last fall, when it had 9,958 students across 12 direct-run schools and three charter schools. That’s a drop of 23.6 percent.

. . .

The state gives the EAA $7,246 for each student, which means the district is expected to get about $17 million less in state aid than it did a year ago.

In June, the district adopted a $92.3 million budget for 2013-14, based on a projected enrollment of 8,919 — 1,330 more students than it enrolled this fall, according to the state. The EAA said it had 9,521 students at the end of the past school year.

The loss of students raises questions about the EAA’s future. The district was designed to take over dozens of failing schools statewide but has not gone outside the buildings it took over from Detroit Public Schools. Several lawmakers have concerns about the EAA, how it educates children and what they call a lack of transparency with public tax dollars. [Michigan's EAA sees 24% drop in students, Detroit News, November 23, 2013.]

As students leave, revenue leaves as well.  Contrastingly, the Detroit Public School district is seeing students surging into the district.  DPS enrollment surges after years of decline, Detroit News, November 1, 2013.

Our next post will cover the statewide opposition to the EAA.