N.J. lacks oversight to properly oversee private special education schools

Earlier this month the Star-Ledger released the results of its two- month investigation of the finances of New Jersey’s thriving industry of 170 private special education schools. After carefully reviewing more than 8,000 pages of audit reports and documents, the Ledger concluded that a portion of these publicly-supported schools are rife with “nepotism, high-executive salaries, generous pensions, fancy cars and questionable business deals.”

Under federal and state law,, specifically the Individuals with Disabilities Education Act (I.D.E.A.), children with disabilities are entitled to a free education in a setting that provides all necessary services. So these fancy cars and profligate salaries all come courtesy of New Jersey taxpayers. (The Feds kick in a little bit.) The Ledger paints a picture worthy of everything you love to hate about Jersey: surreptitious backroom deals, partisan favors, and unethical behavior.

Just as alarming, alleges the Ledger, this bilking of the public occurs under the aegis of the NJ Department of Education.

But here’s one detail that the Ledger leaves out. One year ago, the DOE conceded that it has neither the manpower, political capital, nor the legislative support to tighten its oversight.

Of course, all states in the country send some children with special needs to out-of-district schools, both public and private. The national average for out-of-district placements is about 4 percent. That percentage is appropriately low because I.D.E.A. also requires that kids with special needs be educated in the “least restrictive environment,” typically the local public school. But for kids with the most serious disabilities — severe autism, profound developmental delays, those who require full-time nursing care — a private school is often the most appropriate setting.

However, New Jersey is an anomaly because we sent about twice as many kids with disabilities to private schools than any other state in the country, about 8 percent.

This culture of segregation may be discouraged by I.D.E.A. but is endemic to a state with a strong allegiance to local control: 590 school districts and 565 municipalities. Such a fragmented school infrastructure impedes the creation of in-district programming for kids with serious disabilities, so N.J. has an expensive habit of sending them to private schools.

Here’s another way to quantify this habit: 40 percent of the $3.5 billion per year we spend on special education goes to out-of-district schools.

There are some wonderful private schools for kids with disabilities that are worth every penny. And then there are some that are not. The Ledger focuses on one of the latter, Somerset Hills School, a private for-profit school In Warren County that serves about 97 boys, ages 7-14, with behavioral disabilities, including histories of violent behavior, drug use, crime, and suicide attempts.

You want high costs? Annual tuition, all borne by taxpayers, is $118,500 a year. You want nepotism? Three directors and a principal are related. You want exorbitant salaries? According to the Ledger’s easy-to-navigate data base, “two of [these directors] earned the maximum $225,734.” The food vendor for the school, West Hills Food Purveyors, is actually the school’s Executive Director, and he charges five times more per student than schools with similar demographics.

Then the Ledger asks an entirely legitimate question: Where the heck is the NJ DOE? Why can’t it oversee and regulate these schools effectively?

On September 5, 2012, just over a year ago, Gov. Christie’s Education Transformation Team released its third and final report. Chapter 14 addresses the “broad universe of special education” and its “rapidly escalating costs.”

From the Report:

“The demands of an effective review of [tuition] rates” for every private special ed school “strains the capacity of the Department’s finance staff. Finally, this process has led to ill-will among the parties involved. Taxpayers are suspicious that” these private schools are “deliberately and artificially increasing their costs.” The schools, in turn, “are suspicious that they have been targeted for extreme scrutiny and have been given an automatic presumption of dishonesty; and school districts are made party to a payment system over which they have little control and that almost always results in districts ultimately having to pay large amounts…”

In other words, the Task Force, on behalf of the DOE, cries “uncle.” This rat’s nest is too big for the DOE, rules the Task Force, although there may be some regulatory tweaks that could mitigate excesses.

For example, the Task Force suggests that a tuition cap might be in order. I’d be more specific and urge the DOE to lobby hard for a 2 percent cap on tuition increases aligned with districts’ 2 percent tax cap increases.

And while I’m sure that the DOE’s finance staff is stretched thin, surely another hire or two devoted to oversight of salaries and vendor contracts would prove worthwhile for NJ taxpayers. While the State has limited sway over privately-run entities, there’s always room for collaboration.

The vast majority of N.J.’s private special education schools are well-intentioned, respectful of public finances, and heartfully devoted to our most fragile children. While Somerset Hills may bow out, I’m willing to be bet that most of this consortium, ably represented by ASAH, would welcome a collaborative and fair effort to control costs.

The stakes are so high, whether they be measured in fiscal, educational, or ethical terms. Surely that’s worth a little bit more effort.

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Laura Waters is president of the Lawrence Township School Board in Mercer County. She also writes about New Jersey’s public education on her blog NJ Left Behind. Follow her on Twitter @NJLeftbehind.