IF THE EMMA L. HARRISON CHARTER SCHOOL in Waco were given a grade for appearance, it would have to be an F. In September the lawn was overgrown with weeds, windows were broken, and the floors were dirty. That was just on the surface, but unfortunately appearances here were not deceiving. Teachers hadn’t been paid, the utilities were in danger of being shut off, and the school was so shorthanded that its operations manager, Mac Florence, was serving students their lunch.

Not long ago, Harrison had a bright future ahead of it, one of forty new charter schools that opened in Texas in the fall of 1998. Run by local community leaders, the school aimed to educate at-risk children from kindergarten through the eighth grade who lived in mostly poor East Waco. But in July it became the first operating charter school in Texas to have its charter revoked by the State Board of Education. Officials appealed the ruling, but last September the board denied their motion to rehear the case.

So how did disaster strike in such a short time? Early on Harrison was devastated by the loss of an operating partner that would have provided substantial capital and other resources. But what ultimately did the school in was poor management by the staff, who mishandled funds and overstated enrollments. Such missteps show the danger that charter schools face as they become a more common form of alternative education.

The charter school movement in Texas was spearheaded in 1995 by Governor George W. Bush, who wanted to provide parents with an alternative to low-performing or substandard public schools. Financed with state tax dollars, charter schools can be managed by parents, teachers, universities, nonprofit groups, and even for-profit companies. And though they must be run according to state academic standards, they are not bound by the decisions of local school boards. Seventeen charter schools opened in 1996; currently 145 are in operation across the state. More could be on the way in 2001 if the Legislature approves an increase, and that’s a possibility: James E. Nelson, whom Bush recently appointed as the state’s new commissioner of public education, has suggested that he wants to see more charter schools in Texas. “I know there have been problems with a very small number of the charter schools,” he told the Houston Chronicle in August. “You need to give parents choices.”

Problems like those faced by Harrison, however, could make some lawmakers reluctant to approve more charter schools. The Rameses School in San Antonio may become the next campus to have its charter revoked; it has been charged with inflating attendance records to bring in more state money. At least three others—the Houston Can! Academy, the Renaissance School in Arlington, and the Impact Charter School in Houston—are under investigation for violations that include possible financial mismanagement or, in some cases, possible fraud. And four schools operated by Life’s Beautiful Education Centers in Houston, Dallas, Carrollton, and Denton have returned their charters to the state after questions were raised about their finances.

So far, most of the problems have been at the operating level; curriculum has not been an issue. Indeed, of the twenty schools to receive accountability ratings last year, two, Houston’s Kipp Academy and Project YES!, were awarded exemplary ratings; only four were rated low-performing. To ensure the success of as many schools as possible, the Texas Education Agency (TEA) has beefed up its charter-awarding process and offers seminars to new administrators on how to run an effective school. “Nothing is more important than preparation,” says Brooks Flemister, a senior director of the TEA’s charter school division, which itself is being bolstered with more staff.

However, it may be too late for Harrison, which ran into problems shortly after it won its charter in March 1998. SABIS Educational Systems, a Minnesota-based company, was originally going to finance and operate the campus, which was named after the first African American to sit on Waco’s school board. But local organizers couldn’t obtain a facility large enough to house the 650 students it had originally budgeted, so in May 1998 SABIS pulled out, taking its $556,000 in backing with it. The school’s chief executive officer, Ida Pinkard, a retired postmaster of nearby Salado, decided to press on. Borrowing almost $100,000 from banks and local organizations and hiring a consultant, she opened Harrison as scheduled on August 24 in an abandoned elementary school with fewer than 200 students. A few weeks later, the school received its first monthly check from the state for $126,000, but Pinkard says that most of that money went to repay Harrison’s loans.

In December 1998 auditors from the TEA came to the school on a routine technical assistance visit. They found a number of problems, most notably the absence of a ledger that showed how much money was in the school’s bank account. “They didn’t know what money had gone out and what money had come in,” says Lori Lee, one of the auditors. The TEA recommended that the school get its books in order; Harrison officials said they were working on it.

But after the Christmas break, the TEA got a call from a manager at a check-cashing business in Waco who reported that the school was bouncing payroll checks. TEA auditors returned and discovered that the school still wasn’t keeping up with its accounting, that its profit-and-loss statement showed revenues of $408,452 and expenses of $685,464, and that teachers, vendors, the Teacher Retirement System, and the Internal Revenue Service had not been paid. Indeed, the school’s situation was desperate: With $2,164.49 in outstanding checks, it had only $338.66 in the bank. “At that point, we realized there were serious financial problems,” Lee says. Despite urgings by the auditors, the school didn’t get its finances in order. So in March, the TEA went back once again, this time to conduct an investigative audit. And once again they found a mess: unexplained invoices, insufficient or incorrect record keeping for school attendance, missed payrolls, and incomplete tax forms in employee files. In addition, two other organizations were sharing office space at the school—the East Waco Community Center  and the Heart of Texas Black Chamber of Commerce—both headed by Pinkard.

The TEA also sent in Bob Browning, a professor of school administration at Stephen F. Austin State University, to oversee operations. After spending several weeks meeting with teachers and administrators, he recommended that the TEA consider revoking the school’s charter and estimated that the school was $400,000 in the red. “It did not take a brain surgeon to determine that this is not the type of quality that we should impose on children who can’t help themselves,” he says. Based on Browning’s assessment and the TEA audits, the State Board of Education voted to revoke the school’s license in July. School organizers called for a motion to rehear, which was scheduled for early September.

Then, on July 4, bad news surfaced about Pinkard. The Waco Tribune-Herald reported that she had a history of financial problems, including owing $12,000 to a former landlord, not paying $5,467 in property taxes, and failing to pay employment-related taxes on a business she had owned in Gholson in the late seventies. She also had filed for Chapter 7 bankruptcy protection in late 1992. Despite the news, Pinkard stuck to her guns, opening the school in August after the summer break. Harrison’s public relations representative, A’Drana Gooden-El-Amin, said the school had just under 100 students, but another source placed enrollment at around 25.

The opening was fruitless: On September 9 a committee of the State Board of Education denied the school’s motion to rehear the matter 15—0, a decision that was met with outrage by school supporters. The next day, the full board upheld the ruling. “It was basically what we expected,” Pinkard says. “They haven’t been fair during this whole issue.” School organizers continued to fight, but on September 14 the Texas Rangers executed a search warrant at the school, taking records and financial statements. At that point Pinkard decided that Harrison could not remain open; shortly afterward, it closed its doors. Pinkard has now filed a complaint against the TEA in federal court, asking that the charter not be revoked and that the TEA cover all expenses of the school—as well as $250 million in damages. She believes that the school can succeed and insists that it will reopen. “The bottom line is the children,” Pinkard says. “They need a place to go.” The question now is if Harrison would be a better place than the alternative.

Claire Poole wrote about Houston minister Kirbyjon Caldwell in the February 1999 issue of Texas Monthly.