State Auditor General Eugene DePasquale visited Bethlehem Sept. 12 and gave a presentation at Northeast MS, at which he reported the results of an investigation into key blind spots in the law that allow charter schools to take advantage of taxpayer money without transparency or supervision.

The report is the result of an investigation into the city’s own Lehigh Valley Charter HS for the Arts, which has been operating for more than a decade, and three years ago constructed an impressive $25 million building on Third Street on the Southside.

Bethlehem Area School District Superintendent Dr. Joseph Roy said in an email the district identified several areas of concern related to public bidding contracts, and brought them to the attention of DePasquale’s office in 2015.

During his remarks last week, DePasquale said Charter Arts is a very good school that he believes is performing significantly better than other charters in the state, but that performance is not at issue: He is investigating fiscal loopholes.

“One thing our audit did was find areas where charter schools allowed loopholes to keep spending out of the public’s light,” he said. Stressing that though Charter Arts did nothing illegal and cooperated fully, he feels the law needs to be changed.

“Right now what happens is, if you are a school district like Bethlehem and you want to build a new building, you have to do that with state and local tax dollars, you have to bid the entire project, and as auditor general, I have the ability to see how every single dime of that is spent.”

DePasquale said money spend through charters’ private foundations keeps the spending beyond his jurisdiction and beyond the ability of the media to properly follow, making it a challenge for the public to know how their tax dollars are spent.

“Many charter schools say they are also public schools. To me, you either are a public school or you are not, and if you are, you have to operate by the same rules, he said.

“If you are building a school with tax dollars, you shouldn’t be able to funnel it through a foundation to keep public eyes away from the project.”

DePasquale largely panned Harrisburg and legislators pandering to special interests, saying public schools are not in a fair fight when charters are permitted to get away with so much.

Politics aside, Roy said, “I was pleased that the AG audit confirmed our concerns about loopholes in the charter school law that allows a charter to circumvent public bidding requirements. Since charter school buildings are paid for with tax dollars, they should make sure, through competitive public bidding, that the lowest responsible bidder is hired. I was also pleased that the AG also raised concerns about the fact that the charter received Redevelopment Assistance Capital Program money from the state in the amount of $2 million … because RACP money is supposed to be for economic development and job creation and the AG agreed with BASD’s position that building a school should not qualify.

“Receipt of RACP money is really a political process, but the grant to the charter raises questions about the appropriateness of the state allocating RACP money for a charter school.”

Roy concluded, “It’s been a long road and I am pleased the Auditor General recognized the same concerns BASD raised and that the AG is urging the legislature to close the charter construction loophole.”