Nonclassroom-Based Charter Schools in California and the Impact of SB 740

Charter schools that provide nonclassroom-based (NCB) instruction have represented a rapidly proliferating segment in the charter school movement in California over the past decade. Nonclassroom-based charter schools differ from traditional charter schools in that they deliver instruction outside the confines of the classroom setting. Nonclassroom-based instruction encompasses home-schooling and various forms of independent study, including computer-based instruction using software modules and teacher-directed distancelearning. Nonclassroom-based charter schools tend to serve somewhat different students from those found in other charter schools—e.g., students seeking personalized instruction and a pace tailored to their needs. Policymakers have been concerned over the potential misuse of public funds in NCB charter schools due to the nature of the instruction they provide. They use facilities and teachers in a different manner from other types of schools and may have lower cost structures. Therefore, disproportionate amounts of public per-pupil revenues could end up in the hands of school administrators in these schools. In October 2001, the California legislature passed Senate Bill 740 (SB 740) to strengthen the oversight of nonclassroom-based schools and implement cutbacks in state funding for schools failing to meet specified spending standards. As of late 2004, the SB 740 funding determination process had been implemented for three consecutive school years. In April 2003, the California Legislative Analyst’s Office commissioned a team of RAND researchers to perform an evaluation of the SB 740 oversight process and its impact on NCB charter schools. The evaluation addressed five broad questions: • What does the SB 740 funding determination process entail? • Has the process fulfilled the directives of the legislation? • What has been the effect of the SB 740 funding determination process on operations and instruction in NCB schools? • Does the process provide appropriate and effective oversight? • How can the SB 740 funding determination process be improved? To address these questions, the study team used a research design strategy that included interviews with stakeholders involved in the SB 740 process, analyses of state funding data, and analyses of data from surveys of NCB charter school principals and teachers.