Virtual Charter Schools on Trial in North Carolina

Virtual charter schools have been hailed as an innovation that allows greater flexibility and access to quality education.  But critics say this innovation comes at the high price of diverting taxpayer money from traditional “brick and mortar” public schools.  The North Carolina State Board of Education has consistently refused to consider virtual charter applications, but a case currently on appeal may give at least one local board a workaround.

Charter schools, virtual or otherwise, are public schools operating under a governing document, called a “charter,” that details the school’s organization, management and curriculum.  According to the Center for Public Education, “since charter schools are publicly funded, they must have open enrollment policies, may not charge tuition, and must still participate in state testing and federal accountability programs.”  The charter is subject to periodic review by the authorizing agency.  But charter schools have greater flexibility when designing a curriculum, hiring staff, and managing their budget than traditional public schools.

Virtual charter schools carry that flexibility one step further.  Students enrolled in virtual charter schools take classes primarily online, with a parent or guardian providing supervision.  Students still get a tuition-free education with state-certified teachers, but can learn at their own pace.  This is a real advantage for children who struggle to keep up with their classmates or for those who can learn at a much faster pace.  It also provides a way for children to keep up whose families move frequently or for students who are pursuing interests in sports or the arts.

Opponents of virtual schools point out that online learning misses a critical component of child development – social interaction.  In addition, many virtual schools are operated by for-profit companies, which some parents and education officials say makes for a bad combination.

These policy arguments form the real controversy behind the case currently on appeal, which hinges on a matter of statutory construction.  Under current North Carolina law, there are three state entities that can give preliminary approval to a charter school:  the State Board of Education, a local board of education, or the university system.  But even if preliminary approval is granted by any of these three entities, final approval can only be given by the State Board.  Since the General Assembly recently lifted the cap on the number of charter schools statewide, the number of applications has increased.

A company called NC Learns, doing business as North Carolina Virtual Academy, applied for a charter from the Cabarrus County Board of Education in 2011.  Cabarrus County gave preliminary approval, and the application was sent to the State Board for final approval.  The State Board has had a policy, albeit not an official rule, of refusing to consider applications for virtual charter schools for the policy reasons discussed above.  However, the statute required that the State Board either approve or deny the application by March 15, 2012.  Citing its policy of not considering virtual charter applications, the State Board took no action.  N.C. Learns took its case before the Office of Administrative Hearings.  In a move that took the State Board by surprise, Administrative Judge Beecher Gray ruled on May 18 that the State Board’s failure to approve or deny the charter school application from NC Learns by the statutory deadline constituted a loss of jurisdiction, and that the charter was therefore approved as a matter of law.

The State Board appealed Judge Gray’s decision to the Wake County Superior Court.  I attended the oral arguments before Judge Abraham Penn Jones on June 25.  As a preliminary matter, Judge Jones considered the petitions of parties who wished to join the case as intervenors and amicus curiae.  The North Carolina Justice Center had already been admitted as amicus curiae for the State Board of Education, and Judge Jones granted their request to present a brief argument.  The National Coalition for Public School Options, a national organization also known as that supports school choice, was permitted to join as amicus curiae to NC Learns.  After an extended argument by both parties, the North Carolina School Boards Association and 98 local boards of education from across the state were permitted to intervene, represented by Eddie Speas, Ann Majestic and Bob Orr.  Laura Crumpler, Assistant Attorney General, argued on behalf of the State Board of Education.  Senator Fletcher Hartsell argued for NC Learns.

The State Board made three primary arguments.  First, because the State Board did not make a decision on the charter application, the Office of Administrative Hearings did not have jurisdiction to hear an appeal.  The proper remedy should have been an action for unreasonable delay under G.S. 150B-44.  Second, the Administrative Law Judge’s authority was limited to saying, in essence, “bad decision” or “good decision.”  He did not have the power to go further and discuss the rights of the parties resulting from an agency’s failure to act.  Third, the State Board argued that the decision was wrong as a matter of law.  A statutory deadline with no specified consequences for failure to meet the deadline is an admonition only, and does not deprive the board of jurisdiction.  The appropriate remedy is to send the application back to the State Board for final approval.

Interestingly, when the judge asked why the State Board did not simply say “yes” or “no” by March 15, Crumpler replied that she could not answer, but believed the State Board had decided not to consider any virtual charter applications because of the major policy issues surrounding them.

Counsel for the North Carolina School Boards Association and local boards argued that the case was a simple matter of statutory construction.  The statute gives the State Board final approval for all charter school applications, even when preliminary approval has been obtained from a local board or the university system.  The decision by Judge Gray created a charter school by default, without state approval, and that charter school is now entitled to taxpayer money that is being diverted away from other public schools.

Senator Hartsell, representing NC Learns, argued that the State Board’s “decision” not to consider virtual charter applications was never formally adopted as a rule, and emphasized that March 15 is a mandatory deadline listed in two different places in the statutes.  The language of the statute assumes that preliminary approval by a local board essentially means the state board will also approve because the criteria required for state approval is only part of the more extensive criteria required for local board approval.  Senator Hartsell stated that local boards “just don’t like” charter schools, and pointed out that the taxpayer money is still going to the same children, just through a different entity.

Judge Jones reversed the decision by the Office of Administrative Hearings, ruling that the State Board is not obligated to review charter applications.  But the fight is not over.  During oral arguments before the Superior Court, Judge Jones admitted that he fully expected his decision to be appealed, regardless of how he ruled.  Sure enough, NC Learns recently filed an appeal with the North Carolina Court of Appeals.  Until the Court makes its decision, the State Board will probably be emphatic about denying more applications for virtual charter schools.


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About Jim Small, Former Senior Staff Writer (8 Articles)
Jim graduated from Campbell Law School in 2013 and received his Bachelor of Arts in Prelaw from Bob Jones University in South Carolina. He worked as a Research Assistant to Professor Amy Flanary-Smith, conducted research for McCuiston Law Offices in Cary, NC, and completed an externship in the Research Division of the North Carolina General Assembly.
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