Federal Government Shutdown |
October 1 marked the beginning of a federal government shutdown that may have severe negative implications for public schools. Superintendent Mo Green outlined the potential impact on North Carolina in a message released on Wednesday. The good news is that most of the basic funding for public schools is determined by already established formulas and is disbursed on a set schedule that will continue despite the shutdown. Funding for programs such as Elementary and Secondary Education Act (ESEA)—including Title 1-A for low income districts, Title II-A for professional development, Title III for English Language Acquisition—Individuals with Disabilities Act (IDEA) and Career and Technical Education (CTE) should continue. As long as these disbursements do not require staff involvement or decision-making, funds that were allocated as part of the 2025 fiscal year may continue during the shutdown. Federal funding that goes directly to districts with a military base or Native American lands is funded on a different timeline and was set to start on October 1. These funds have the potential to be adversely affected by the federal shutdown. However, Superintendent Green stated that, “I would ordinarily feel comfortable that we will receive the formula funds as we typically do…we have to be prepared for circumstances to be different with this federal administration. As we experienced earlier this summer, the administration withheld certain formula funds that were previously appropriated by Congress…” |
In other words, although the formula funding could and should continue, nothing is guaranteed given the recent actions of the current administration. The USDOE Secretary of Education Linda McMahon noted in a memo that the following will stop during a federal shutdown: - New Grant Activities: The USDOE will cease all new grantmaking activities.
- Civil Rights Investigations: The Office for Civil Rights will pause review and investigation of complaints.
- Technical Assistance: Development of guidance, technical assistance, and regulatory actions will pause unless required for funded activities.
School meals are likely to remain unaffected for three months. An official in the U.S. Department of Agriculture (which funds child nutrition services) has shared that the agency typically has funding on hand for three months of school meals following a shutdown. The agency will issue further guidance if the shutdown nears the three month mark. A separate issue for federal education funding is the massive cuts to these programs proposed by the administration for the coming fiscal year. As Congress works through details of future budgets, we hope that they choose to reject funding cuts to public education. READ SUPT. GREEN'S MEMO |
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Should NC Conduct An Audit Too? |
The Louisiana Legislative Auditor just released a report of South Louisiana Charter Foundation, Inc. (an affiliate of Charter Schools USA) detailing numerous cases of improper use of state dollars. The report raises important questions about whether similar issues exist in the North Carolina charter schools managed by Charter Schools USA. Charter Schools USA (CSUSA) is a for-profit charter school management organization (CMO) based in Florida. It operates more than 100 charter school campuses serving over 80,000 students in Florida, Louisiana, North Carolina, and South Carolina. Like many for-profit charter management organizations, CSUSA typically manages all parts of a charter school’s operations. The focus of the Louisiana audit report is the non-profit corporation, South Louisiana Charter Foundation, Inc. (Foundation), which was set up to open charter schools in the state. The Foundation secured approval to operate multiple charter schools in Louisiana, including the primary focus of the audit, Iberville Charter Academy (ICA). The Foundation then hired CSUSA-ICA (the Iberville, Louisiana branch of CSUSA) to manage its operations. In North Carolina, charter school applications must be submitted by a non-profit organization, but the governing board of the non-profit is allowed to contract with a for-profit CMO (like CSUSA) for some or all of its operations. In the case of CSUSA-affiliated schools, the non-profit board may turn over all operations (and funds) to CSUSA. However, the non-profit board—often with members from the CMO—is still responsible for making key decisions about contracts, hiring, etc. The Louisiana audit was initiated due to numerous complaints against the charter school’s practices. The audit found multiple serious issues: Questionable Payments to CSUSA-Affiliated Companies. CSUSA-ICA paid affiliated organizations more than $6.9 million dollars between 2019 and 2023 without Foundation (the non-profit) board approval, written contracts, or adequate documentation. These payments were not disclosed in audited financial statements. |
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Improper Operation of Charter School Off-Site Locations. In 2019, CSUSA-ICA started using a CSUSA-affiliated organization to enroll students in “learning pods/online learning centers” at multiple off-site locations. The students were reported as enrolled at Iberville Charter Academy (resulting in more funds from the state) even though the pods didn’t use the same curriculum or staff and state law prohibited charter schools from establishing learning pods until 2021. Improper Fees Charged to Students. Three of ICA’s learning pods collected $511,538 from the parents of enrolled students between February 2019 and April 2023. Records from these pods described the payments as “program fees,” “registration fees,” “technology fees,” and “tuition.” According to the audit report, charter schools in Louisiana are prohibited from charging certain fees to students. Overpriced Leases to CSUSA-Affiliated Organizations. The Foundation leased its school facility from a CSUSA-affiliated organization for much higher than fair-market value. Over the 20-year lease term, total payments will be nearly $14 million higher than the actual cost of the property. The learning pod organization is also leasing facilities from CSUSA-related organizations at higher than fair market rate. These lease arrangements raise serious issues regarding compliance with the state's requirement for prudent use of public funds. Improper Cash Transfers totaling $931,895. CSUSA-ICA made transfers of $681,895 from the charter school’s bank account to its own account and $250,000 from the charter school to the organization running the learning pods. The foundation board approved none of the transfers and some have inadequate documentation. Failure to Produce Records in a Timely Manner. CSUSA-ICA sometimes took up to 184 days to produce records to which it is contractually responsible for ensuring timely access. The delays appear to violate multiple contracts as well as state law. The full report provides more details about the severity of the financial mismanagement, lack of documentation, and degree to which unauthorized funds were directed to CSUSA-affiliated organizations. The Louisiana audit report should alert North Carolina to investigate similar issues that may exist in the CSUSA schools operating in North Carolina. For example, the Louisiana audit found improper payments made from ICA to Red Apple Services, LLC (renamed as Good Hearts Gear), which is the designated uniform/accessory vendor for North Carolina’s CSUSA schools. Improper payments were also made to 10Jin (technology provider for charter schools), Noble Education Initiative (teacher certification, school management), and Altitude Education USA (college guidance counseling). The nine CSUSA charter schools operating in North Carolina in 2024-25, their non-profit governing entities (e.g., foundations) and their school performance grades are shown below: North Carolina Charter Educational Foundation - Cabarrus Charter Academy (F) Closed in 2025-26
- Langtree Charter Academy (B)
- Iredell Charter Academy of Arts and Sciences (D)
- Concord Lake STEAM Academy (C)
Steele Creek Charter Education Foundation, Inc. - Steele Creek Preparatory Academy (D)
Triangle Charter Education Association - Cardinal Charter Academy (B)
- Cardinal Charter Academy at Wendell Falls (C)
Union County Charter Education Association - Union Preparatory Academy at Indian Trail (C)
West Lake Education Foundation - West Lake Preparatory Academy (C)
Just last week the U.S. Department of Education Secretary McMahon announced new grant funding of $53 million for NC charter schools. With tens of millions of new grant money flowing to charter schools and their management organizations, NC should conduct an audit to ensure that procedures and payments are following NC state law. |
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Legislative and SBE Updates |
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Don't Miss Our Webinar with Diane Ravitch! |
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| Wednesday, October 22, 7-8 p.m. We are excited to announce that we will be hosting a special event with Dr. Diane Ravitch to discuss her new book, published by Columbia University Press, An Education: How I Changed My Mind About Schools and Almost Everything Else. You don't want to miss this great conversation! With honesty and grace, Diane retraces her journey from her Houston childhood to her service in the government, including a stint in the conservative Department of Education, and her eventual transformation into one of our fiercest defenders of public schools. Blending personal reflection with a historian’s rigor, Diane explains how she came to embrace equity, professional teachers, and democratic public education, becoming an inspiring activist whose life’s work continues to uplift the promise of our public schools. There will be time allowed for Q&A. Make a tax-deductible donation to Public Schools First NC and we will mail you a copy of this wonderful book! Your donation helps us keep working to protect and strengthen our public schools. DONATE REGISTER HERE |
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| Only a few dozen bills typically make it “across the finish line” and become law each legislative session. - For the current 2025 legislative session, 1,800+ total bills were introduced.
- Of these, 101 bills have become law so far.
Of these 101 new laws, NCGA staff have noted 38 laws relate to education in some way. |
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Career Tech Ed Moves to Labor Department |
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| The U.S. Department of Education is transferring day-to-day management of career and technical education programming to the U.S. Department of Labor, with the logistics and funding responsibilities laid out in an interagency agreement. Officials at the Education and Labor departments say this sharing of CTE responsibilities…is “commonsense” and will benefit students through streamlined services to states and districts. CTE and education administrative organizations, however, are concerned that since the Labor Department’s focus is on workforce needs, the educational part of job awareness and career exploration will be lost. In addition, it seems that the CTE funding to NC will be cut. A separate but similar debate is occurring in special education. Secretary McMahon has said she would like to shift the Education Department’s oversight of special education programming to the U.S. Department of Health and Human Services, although no formal plan has been made public. READ MORE |
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October is Farm to School Month |
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| This year’s National Farm to School Month theme, Growing for the Future, emphasizes the role of farm to school and early care in creating thriving communities now and in the future. All of our futures depend on the farmers who feed us, take care of our soil and waterways, and protect seeds for the next harvest—but their work often goes unseen and undervalued. By investing in programs that support local farms, producers, and fishermen, and allow school meal programs across the country to easily buy directly from them, we can create a thriving food future that puts people and planet first. Farm to school ensures that young children and students eat healthy, fresh, and locally grown meals in schools, and that farmers earn a reliable source of income by feeding their community. LEARN MORE |
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| Multiple Dates, 7:00-8:30 pm: Resilience and ACES. Learn about Adverse Childhood Experiences (ACES) and resilience. Join us for this award-winning, 60-minute film, Resilience: The Biology of Stress & The Science of Hope. This documentary examines how abuse, neglect, and other adverse childhood experiences affect children’s development & health outcomes in adulthood. This powerful movie is a conversation starter and a perspective changer. REGISTER HERE |
All screenings are on Thursday and include time for discussion. - October 23, 2025
- January 22, 2026
- February 26, 2026
- March 26, 2026
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Words to Remember"Public education is not broken. It is not failing or declining. The diagnosis is wrong, and the solutions of the corporate reformers are wrong. Our urban schools are in trouble because of concentrated poverty and racial segregation. But public education is not ‘broken.’ Public education is in a crisis only so far as society is and only so far as this new narrative of crisis has destabilized it." — Diane Ravitch |
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Help us support public schools!Public Schools First NC is a statewide nonpartisan, 501(c)(3) nonprofit focused solely on pre-K to 12 public education issues. We collaborate with parents, teachers, business and civic leaders, and communities across North Carolina to advocate for one unified system of public education that prepares each child for productive citizenship. |
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