The best way to fix a troubled charter school isn’t to go after the school, lawmakers and policymakers say — start with the authorizer.

A Chalkbeat investigation revealed that the school district charged with overseeing Indiana Virtual School has taken a hands-off approach that seems to meet the low expectations for authorizers in Indiana’s charter law, but the approach isn’t paying off when it comes to meeting the needs of the school’s students.

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In the Hoosier state, authorizers — which can include universities, mayors, or school districts — can only be punished for their school’s bad academic performance, not other kinds of missteps. Even then, there’s no guarantee that a school would close or that an authorizer would be stripped of its privileges to oversee schools. Many states have grappled with how to approve the best authorizers who will operate good schools, and even though Indiana’s policy has been held up as a national model, it has gaps.

“You have authorizers that aren’t behaving appropriately, whether it be malicious or not,” said James Betley, executive director of the Indiana Charter School Board, one of the state’s charter authorizers. “Currently, consequences only come in when a school performs badly because our laws don’t contemplate legal violations.”

Control has been at the crux the debate — how much should an authorizer get involved in the daily affairs of charter schools, and how much should the state intervene if an authorizer veers off course? In an atmosphere where free market politics encourage experimentation, authorizers are given broad reign.

But in Indiana, authorizers are often paid by the schools they oversee, and there’s not much incentive to close them. David Harris, founder and CEO of The Mind Trust, said authorizers not only shouldn’t get authorizing fees from schools, but they also need to be heavily screened upfront to make sure they can do the work — especially if they are going to authorize virtual schools, which tend to have poor track records for student learning.

“The authorizer needs to assess whether it has the capacity to effectively oversee a school,” Harris said. “And if they can’t make the case that they do that well, then they shouldn’t authorize the school in the first place.”

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Oversight of Indiana Virtual School by the small Daleville Community School District has been fairly hands-off by the district’s own admission, and the district was on-track to earn at least $750,000 in fees last year. Over its six-year lifespan, the F-rated school has enrolled thousands of students but failed to graduate most of them or hire more than several dozen teachers. But it continues to bring in millions of state dollars. Daleville this summer began piloting a new evaluation tool that it thinks can help improve Indiana Virtual.

Since 2011, a for-profit company headed by Indiana Virtual’s founder, Thomas Stoughton, has charged the school millions of dollars in management services and rent, an agreement Daleville said it was unaware of. Stoughton has also led the school’s growth. In September, he opened a second statewide virtual school, also chartered by Daleville.

The variety of issues at Indiana Virtual School underscore a wider need to re-examine how the state holds charter school authorizers accountable for their schools.

“There’s a need to have virtual and online platforms available for certain students,” said state board member Tony Walker. “That being said, there are some problems I think with our model that I think are highlighted by this situation … there was a failure of the authorizer to keep proper monitoring and accountability.”

Ultimately, as Indiana lawmakers prepare to begin the 2018 legislative session in January, they can change the law, but it’s hard to say if they will. And though the State Board of Education has the authority to change education policy, it’s unclear how they could affect existing laws or policy around authorizing. At the very least, someone should be paying attention, said Mike Petrilli, executive director of the Fordham Foundation, a conservative think tank that supports access to charter schools.

“There’s no doubt that many of these online schools are disasters,” Petrilli said. “We have now seen in many states both terrible outcomes, but also financial scandals. And so there’s no doubt that policymakers have to figure out a better approach to regulating these entities.”

There are a number of steps Indiana could take to close gaps that allow chronically underperforming schools or subpar authorizers to continue. Here are some options:

Re-evaluate current authorizers to make sure they are up to the state’s standards.

In addition to other authorizing changes made in 2011 and 2013, Indiana created stricter requirements to weed out unfit authorizers in 2015. The move was widely praised — that year and in 2016, the state’s policies earned a top ranking from the National Association of Charter School Authorizers.

But when the law changed, existing authorizers, including Daleville, were grandfathered in and didn’t have to go through the new, more rigorous screening through the Indiana State Board of Education. School districts that applied were automatically approved and didn’t need to complete the rest of the screening.

There’s no definitive consensus about what good authorizing looks like, partially because charter advocates have long lobbied for fewer restrictions. So although Indiana requires that all nine of its authorizers adopt best practices, such as those developed by the National Association of Charter School Authorizers, state charter law lays out no way to enforce it. (Compared to the association’s general guidelines, those on virtual charter schools are much more stringent.)

State Board spokesman Josh Gillespie said only the Nineveh-Hensley-Jackson United school district has applied to be an authorizer since the rule change, a 1,828-student district about 30 miles south of Indianapolis. The district doesn’t appear to charter any schools at this time.

If the state wanted to send a message that it valued high quality authorizers, it could walk back the grandfathering provision.

Stop allowing authorizers to get paid by the schools they oversee.

Under current law, charter authorizers can collect up 3 percent of a school’s state funding as payment for monitoring.

Authorizers should have the ability to get financial support for their work, sources told Chalkbeat, but that support shouldn’t come from schools themselves. Tony Walker, a member of the Indiana State Board of Education representing Northwest Indiana, said he worries about the fees in particular when it comes to school district authorizers that might already be struggling financially compared to larger state organizations and universities.

“There are inherent conflicts that arise when (a district) is getting chartering fees from the school and they desperately need the money,” Walker said. “I don’t think they have the same resources that Ball State and the (Indiana Charter School Board) have in terms of monitoring and providing support.”

One alternative is that the state could budget to support all authorizers directly. If the money isn’t tied to school enrollment, it could help reduce the incentive to accrue students beyond what a school can actually support.

“The fee is a bad idea,” Harris said. “It creates an incentive to charter schools that shouldn’t be chartered because the authorizer generates revenue from that.”

Keep authorizers and virtual charter operators from opening additional schools or enrolling students if current ones have been consistently low-performing.

Restricting how virtual schools gain students and replicate could make sense even in a state that has long supported online education.

Currently, public charter schools need four years of F grades before the state board can cap enrollment, reduce authorizer fees or close the school.

But there’s already precedent set in Indiana law for how this system could improve to address troubled schools more quickly and automatically. Lawmakers could take a cue from the state’s voucher program.

If a private school gets a D or F grade from the state for two consecutive years, it is no longer eligible to receive vouchers for new students. Last year the law was tweaked to allow schools to appeal that decision, but the state board can still deny such a request.

Indiana Virtual School, Hoosier Academies and Indiana Connections Academy — all statewide, full-time online charter schools with consecutive years of F grades — have quietly opened new schools within the past year or so.

Sen. Dennis Kruse, chairman of the Senate Education Committee, said it doesn’t make sense to allow low-performing schools to open new schools.

“I think virtual schools should succeed or not be opened,” Kruse said. “So if they can’t get their act together, I think they ought to decide to just close down their schools … If they’re failing with what they’re doing now, why should we allow them to open up more failing schools?”