Illinois Inspector General to Investigate UNO Charter Schools’ Use of Public Money

Wednesday January 23 2013

Despite Weak Finances, the Well-Connected UNO Gets Millions while Regular Schools get Axed

Parent advocates have called upon the Illinois Office of the Inspector General to investigate the financial practices and use of Illinois grant monies used by the UNO Charter School Network and UNO United Neighborhood Organization.

“Our school has never gotten the programs and supplies our children need. Now CPS is planning to close a lot of schools to save money while UNO keeps getting millions of dollars to pull students from our school,” said Rosemary Sierra, local school council president at Pilsen Community Academy. “We thought the state had a budget crisis, but they seem to be able to find millions for the politically-connected people at UNO.

Illinois General Assembly has yet to make a decision on a bill that seeks to provide CPS and UNO with $35 million in state appropriations, this while a list of 193 schools in danger of closing has been release by CPS.

Since 2009, UNO has received nearly $100 million from state legislation and nearly $70 million in tax-exempt bonds for the purchase of land and construction as part of UNO’s rapid expansion program. This expansion has allowed the organizations to meet debt payments and growth commitments to lenders and bondholders. In the process, however, the levels of debt carried by the organizations have skyrocketed from $8 million in 2006 to almost $68 million five years later. An increasing share of the organizations’ revenue, composed almost exclusively of per-student public education funding, has been directed to servicing this debt.

“It is outrageous that UNO is slated to receive the same amount of money as the entire Chicago school district will receive, when UNO runs only 14 schools,” said Julie Woestehoff, PURE executive director. “We call on the Illinois Inspector General to investigate how this politically-connected organization is able to amass such a large amount of taxpayer dollars without accountability to the public. ”

“Certainly UNO should not receive any more money until it is clear to the public that the money is being used properly, for improved education for Chicago children and not UNO’s ambitious real estate portfolio,” Woestehoff said.

If the Illinois General Assembly passes Bill 24 and allocates $35 million to CPS and UNO, the would result in approximately $5, 415 in funding for each UNO student and $2.7 million per school, compared to approximately $89 in funding for each Chicago Public School student and $54, 405 for each school. If UNO fails to secure more buildings and more students, the growing financial burden will likely have an adverse impact on students due to an increasing portion of UNO’s income being diverted to cover debt payments.

UNO Board Chairman Juan Rangel and Chicago Mayor Rahm Emanuel are longtime allies. Rangel recently served as finance chairman of Emanuel’s mayoral campaign, and he and other appointed—not elected—UNO leaders have strung together multiple taxpayer-subsidies and tax-exempt financial transactions.

As Springfield politicians, Mayor Emanuel, and CPS administration contemplate further cuts to Chicago education and the closing of up to 193 “underutilized” CPS schools, the politically connected UNO organizations’ financial practices raise serious concern. Rangel’s annual salary is $266,000.