A state legislator from Gary questions whether Ball State University has fully used the money it receives to support charter schools for the funds' intended purpose.
But university officials argue funds derived for and by the charter schools go right back into the operations of those facilities, with plenty of state oversight.
Ball State University authorizes 41 charters in the state, including a dozen in Lake and Porter counties.
It received nearly $3 million in administrative fees from those charter schools in the 2011-12 school year. It spent about $2 million that year.
In 2011-12, the Office of Charter Schools at Ball State received $2.9 million, or 3 percent from the 41 charter schools. Of that amount, the dozen charter schools in Lake and Porter counties accounted for $1.4 million.
Indiana law allows the authorizer to receive up to 3 percent of the tuition support that charter schools receive from the state. The law also says the authorizer shall use its funding exclusively for the purpose of fulfilling authorizing obligations.
Indiana Rep. Vernon Smith, D-Gary, questions whether Ball State has the money to support other university programs outside the charters.
"They make millions of dollars," he said. "They say all of the money goes toward the administration of those charter schools. I believe they are subsidizing something else within Ball State University. They claim it's about the children, but some of those charter schools have not been successful. They have been around for years and should have been closed."
Ball State University spokeswoman Joan Todd said the university gets no financial benefit from authorizing charter schools.
"The Office of Charter Schools does reimburse Ball State for financial, legal support services, office space and other miscellaneous items connected with running an enterprise," she said.
The amount of reimbursement to Ball State was not available Friday.
"These benefits would not be available to OCS — or would be much more expensive for OCS to obtain — if they were not provided by the university."
Since the original charter school legislation was adopted in 2001, the Indiana General Assembly has passed legislation in subsequent years to increase scrutiny on authorizers and the oversight provided to charter schools, Todd said.
The Office of Charter Schools has been required to routinely engage with school leaders and boards all year. This type of engagement requires more manpower and other significant resources, Todd said.
"The OCS is focused on authorizing quality schools and helping existing schools to move from good charter schools to high-quality charter schools," she said. "The 3 percent fee allows OCS to be the kind of partner our schools need."
The Office of Charter Schools has seven full-time employees and one part-time employee.
It provides expertise to charter schools, including board training for all schools at a cost of $10,000 per school. It also holds schools accountable in the areas of educational quality, fiscal stewardship, compliance and governance, Todd said.
The Office of Charter Schools reimburses experts, who are not university employees, who take time away from their normal activities to review charter school proposals and participate in appeal hearings, Todd said.
Charter schools are public schools operating under a performance contract known as a charter. The charter gives the school more independence than a traditional public school.
In exchange for increased freedom, charter schools are held accountable for results. If a school fails to maintain standards or meet the obligations of its charter, the charter may be revoked and the school closed.
Since it began authorizing schools, the Office of Charter Schools at Ball State previously had closed only one school — Urban Brightest in Fort Wayne — in 2004.
But the Office of Charter Schools strengthened its accountability framework during the last couple of years, focusing on assessing charter schools in the areas of academics, finance and governance.
In January, the office notified seven schools across the state that their charters would not be renewed following several consecutive years of poor academic performance. Two of those charter schools were in Gary: LEAD College Preparatory School and Charter School of the Dunes.
LEAD College Prep closed in June after losing an appeal of the closure. Charter School of the Dunes withdrew its appeal and found a new authorizer in Calumet College of St. Joseph.
A third charter, West Gary Lighthouse Charter School, withdrew its application for renewal and closed. The three Lighthouse Academies in Northwest Indiana have restructured and are set to reopen in the fall.
Rep. Smith said he wants to see the charter schools succeed because they are responsible for educating many African-American children.
"Charter schools have been touted as the greatest thing since apple pie," Smith said. "But with the exception of Thea Bowman in Gary, they haven't all been successful.
"And in 10 years, we should have seen success. I know that urban schools are not up to par, but charters were supposed to be the cure-all. We continue to experiment and split the dollars, which causes urban schools to struggle even more."