A California network of online charter schools that pays tens of millions of public dollars a year to one for-profit company is under pressure from its teachers union to explain exactly how that money is being spent.
The concerns of the teachers, who filed an unfair labor practice charge against their employer California Virtual Academies (CAVA) this month, echo more wide-ranging questions about CAVA’s finances and use of public dollars that have dogged the network for more than a decade.
California Virtual Educators United, a union of about 800 educators, is demanding spending details from CAVA, which includes nine public charter schools authorized by school districts across the state, including in San Diego, Los Angeles and Fresno counties.
The 21-year-old charter network, which served more than 17,300 California students last school year, received $220 million in state and federal school funding in 2021-2022, according to its tax filings.
Tax filings show that at least $70 million of the public funding CAVA schools received went to K12, a for-profit national educational company based in Virginia and CAVA’s single biggest contractor. CAVA schools contract with K12 for much of their products and services, including curriculum, accounting, operational and record-keeping services.
The union, currently bargaining a new contract in which it hopes to win higher wages, has requested price information from CAVA on how much it is paying K12 for various products, such as computers and equipment. The union said it needs that information to better understand CAVA’s budget so it can make informed bargaining proposals.
CAVA has refused to disclose the prices to the union, saying the information is proprietary. The union filed an unfair labor practice charge earlier this month over CAVA’s denial of the request, accusing CAVA of violating a state law that requires public education agencies to provide “necessary and relevant” information if requested by unions during bargaining.
“Businesses can have proprietary information, but public schools can’t,” said Nicole Piper, president of Califiornia Virtual Educators United and a teacher at the CAVA San Diego campus.
April Warren, the head of schools who oversees all nine CAVA campuses, denied the union’s allegation.
“CAVA has complied and will continue to comply with all applicable legal requirements in and out of the negotiations process, especially including responding to any requests for information from the union,” Warren said in an email. “CAVA is determined to allow the legal process to run its course, and is confident it will be exonerated from any allegations.”
The union’s requests touch upon more wide-ranging concerns about CAVA’s finances and the close relationship it shares with K12, concerns that are similar to ones outlined in a lawsuit filed on behalf of the state against CAVA and K12 more than a decade ago.
K12, which is also known as Stride and which advertises online charter school programs in more than 30 states, provides so much of the products and services that CAVA schools use that teachers question whether CAVA schools are truly independent from each other and from K12’s influence.
CAVA and K12 were sued in 2012 by a former teacher on behalf of the state, saying the schools enrolled students via misleading advertising tactics and inflated attendance numbers.
The office of then-Attorney General Kamala Harris also alleged that K12, a for-profit company, effectively controlled the CAVA schools, even though it is illegal in California for charter schools to be for-profit. Harris had also alleged that K12 made “unfavorable contracts” with the schools that forced them into steep financial deficits.
K12 and CAVA denied all wrongdoing. In 2016, the case ended with a settlement with the state that required K12 to, among other things, reform its advertising and attendance-keeping practices, pay $8.5 million and clear all CAVA schools’ accumulated debt, which totaled $160 million.
But the teachers union argues that issues remain with CAVA and K12’s relationship. CAVA schools still incur budget deficits due to its K12 expenses, so K12 issues “invoice credits” to resolve those budget deficits, according to school budget reports.
K12 was the only contractor to which any of the CAVA campuses paid more than $100,000 in the 2021-2022 year, the latest year for which tax filings are available. The title on the CAVA website’s homepage reads: “California Virtual Academies: Powered by K12.”
In an email, Warren said K12 is just one of many vendors that CAVA uses and that CAVA and K12 are not the same entity.
California Virtual Academies pays tens of millions to K12 for several aspects of running the schools, including a support services fee and technology fee, as well as money for computers, printers, instructional materials and curriculum from K12, according to school budget reports.
Piper said K12 ends up taking large portions of the schools’ budgets. For example, a March interim budget report for California Virtual Academies San Diego showed that almost half of the federal and state money the school received in one year was charged to K12.
“California money should stay in California with our students. This is public funding that is designed for students, and if it’s going to Virginia and we don’t know what it’s paying for, that’s a problem,” said Piper, who has taught at CAVA for 12 years.
The union argues that money CAVA schools are sending to K12 could instead be paying teachers better salaries — Piper noted that the starting CAVA teacher gets paid less than a starting teacher at San Diego Unified while working a longer school year. She also argues money could pay for more up-to-date curriculum, computers for students and more classified staff to help ease teachers’ workloads.
Piper said she is concerned that K12 could be charging CAVA high prices because K12 is its exclusive provider for many products and services. For example, Piper said CAVA rents computers from K12 when she thinks buying computers would be more cost-efficient. And CAVA has acknowledged to the union that it has not solicited bids for goods and services it obtains from K12, Piper said.
“CAVA should be getting bids for these items. It should not be a foregone conclusion that we should be partnering with K12,” she said.
