Learning about ethics

They seem remarkably similar at first, the two cases involving leaders of publicly funded educational organizations in California who, within the same week, were reported to have racked up tens of thousands of dollars in inappropriate expenses over three years.

Founder Steve Barr repaid close to $51,000 to Green Dot Public Schools after an internal review initiated by the charter operator found that he had been reimbursed for inappropriate expenses and lacked the required receipts for others. Meanwhile, a state audit found that a former official with the financially crippled California State University system had received more than $150,000 for inappropriate expenses, including a small number of double reimbursements. David J. Ernst, the former chief of information technology services at CSU who now works for the University of California, will repay less than $2,000 -- only the expenses for which he was reimbursed twice or was otherwise overpaid.

There’s a key difference between the two cases, though. When the audit on Ernst’s expenses was completed, it was made accessible to the public. The taxpayers who funded the improper expenses could see where their money had gone, and the information was enough to stir up some justifiable outrage -- unnecessary trips to Shanghai and Amsterdam, as well as commuting expenses so Ernst could live in Northern California and fly to his job in Long Beach.

The Green Dot expenses came to public light through the nonprofit organization’s tax return, which included a note about the internal review that had found the improper expenditures. Because it is a private organization, Green Dot did not have to, and until Tuesday declined to, make the review public. The review notes personal expenses for which Barr was reimbursed and ATM withdrawals he made during vacations. Five years ago, Green Dot was a tiny operation run from his kitchen table, the review says, but as it grew, Barr did not always seem to understand that it had to be run more accountably.


Green Dot took the responsible step of examining internal operations -- and eventually releasing the results -- but the public shouldn’t have to beg for answers about how its money is spent or be grateful for getting them. Charter schools are freed from many state regulations so that they can get on with the business of doing a good educational job. But they are not free from all regulation; there are numerous rules about enrollment, hiring and testing. Nor should they be exempt from the obligation to show how they spend taxpayers’ money. State charter school laws must be changed accordingly.

As the California State University example illustrates, it’s not that private education groups are necessarily more likely to misuse funds than public schools. But under current rules, they are more able to hide questionable expenditures or keep the details private. That can’t be allowed.