Charter raises scores; finances raise questions

First of two parts.

To many in the impoverished city of Chester, the Chester Community Charter School is a beacon of hope.

The state's largest charter school, it boasts safe hallways, new facilities and energetic teachers. It outperforms the city's regular elementary and middle schools on state tests.

But there's another side to the school's operation that Pennsylvania Education Secretary Gerald L. Zahorchak and Barbara Nelson, a top aide, say raises questions about whether the school is spending too much of its budget on administration and too little on teaching. Zahorchak says he has asked the Chester Upland School District to report on financial data from the school "to the last penny spent."

The state is also seeking changes in the school's special-education program, which has a high percentage of mildly disabled students. Under state law, the school receives three times the regular-student subsidy for each special-education student, whether he or she is mildly or severely impaired. But it spends only a fraction of that on services to those students and uses the rest for other purposes.

The school denies any improper practices and has challenged the state's review in Commonwealth Court, which has ordered hearings and arbitration.

The charter, a nonprofit, pays millions of dollars in annual rents, management fees and salaries to a for-profit company and its chief executive officer, Vahan H. Gureghian, a wealthy lawyer and Republican fund-raiser who lives in one of the largest mansions ever built on the Main Line.

While the charter pays its teachers among the lowest salaries in the state, Gureghian and his company are being paid $14 million in salaries and rent this school year. That brings the total he has received since he began running the school in 1999 to $60.6 million, according to school records submitted to the state.

The portion of the school's money going to business and administration is consistently among the highest for charter schools in Pennsylvania, state records show, and its spending percentage on instruction is among the lowest.

The charter - with 2,350 students in kindergarten through eighth grade - enrolls almost half the Chester Upland School District's elementary and middle school students and is larger than half the school districts in Pennsylvania.

In a written statement, Gureghian said he was "most proud of the work I've been able to do, through my management firm, on behalf of the Chester Community Charter School."