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Advantages and Disadvantages of Charter Schools

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Charter School

How does it differ from what we are traditionally used to
What are the benefits to this system?
What are the downfalls?
Cost analysis of this system
Benefit to students, taxpayer, and school districts
Overall reflection

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Charter schools

Charter schools are public schools which operate under a "charter" that determines each school's responsibilities. To survive, charter schools have to provide evidence of progress toward specified goals. Schools that fail to fulfill its accountability agreement may lose its charter. All charter schools, therefore, have clear and measurable performance goals that form the basis of their accountability agreement with their granting agencies. Although charter schools enjoy more freedom and flexibility than traditional public schools, they must demonstrate greater commitment to attaining the performance levels they will be held accountable for.

Benefits of charter schools

Here are some views and suggestions (of course you are free to add, modify, or elaborate in any of the following points):

- They promise a change to the larger system of public schools and therefore should be given a chance to prove their credibility.

- They offer parents and students the freedom of choice. We cannot ignore the fact that there is a growing demand among parents for better education and more quality options. Although the test scores provided by charter schools do not indicate that they are superior to other public schools, the charter schools performance is acceptable and the levels they have achieved on the whole are promising.

- There is a strong need to education reform in the public school system and charter schools are one way to accelerate such a reform.

- Charter schools help create an atmosphere free of excessive bureaucratic control. Such an atmosphere would allow charters to flourish ...

Solution Summary

Charter Schools are overviewed.

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Charter School Budget. Is this a static or flexible budget? Do you have any suggestions for complementary or alternative performance measures?

Let's try to apply our knowledge of variable costing and review a sample budget for a charter school. This budget is prepared assuming three levels of student enrollment (66, 100 and 120). Revenue and expenses projections are shown in the budget. Operating assumptions are shown in "Schedule A".
The first requirement of this case relates to the planning function of a budget. Comment on the following relating to the charter school budget:
(1) Is this a static or flexible budget?
(2) What is total revenue (excluding grants) per student?
(3) What are total expenses per student?
(4) Do all expenses seem necessary?
(5) Is this school viable? How many students does the school need to break even (show your calculations with analysis and state your assumptions for break-even)?
(Note: For break even analysis - Ignore revenue received as "Grants" and "Startup Costs" (Schedule A).
(6) What are the general benefits of preparing this budget?
(7) Discuss how this budget is likely to be used for the control function.
Part II.
The second requirement of this case relates to the control function of a budget. Use the background material and Internet to answer the following questions.
(1) Variance analysis is a traditional tool used for planning and control. Comment on advantages and disadvantages of using this approach for performance evaluations.
(2) Do you have any suggestions for complementary or alternative performance measures?

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