Poor communication between state and federal education departments has cost Medford's Logos Public Charter School $225,000 and put a smaller proposed charter school at risk.

Poor communication between state and federal education departments has cost Medford's Logos Public Charter School $225,000 and put a smaller proposed charter school at risk.

Logos had expected the money as the third and final grant from the Oregon Department of Education's Charter School's Program award. The award provides new charter schools with nearly $500,000 over the course of three years to get their schools up and running. The $225,000 grant Logos expected to receive this summer was to be its final payment. But the check never arrived.

According to the Oregon Department of Education, federal charter school funding was abruptly cut due to a misunderstanding, and the cut was passed on to the schools. The loss hurts, but Logos had contingency plans.

"We have some very shrewd businesspeople making sure that we are fiscally sound," said Logos administrator Joe VonDoloski.

According to VonDoloski, the school had built its operating budget to function without the grant in preparation for the following year, when they knew the money would be gone. But the year-early loss still forced sacrifices.

"Losing that money has obviously hindered what we would have been able to do with it as far as computers, training, conferences, etc.," said VonDoloski, who received word of the funding cut in August.

The grant money was lost not through a cut in education funding, but because of a misunderstanding between the state and federal education departments.

When Oregon was awarded a new Charter Schools Program grant in 2008, the state still had leftover funds from a 2005-08 award. The Oregon Department of Education planned to use that earlier charter school grant money before dipping into the new funds.

But after the U.S. Department of Education discovered Oregon had used less than 10 percent of its new grant funds, it cut the remaining year, believing the state had only a small number of charter schools.

That reduced the federal grant amount by about $6.4 million, a cut that was then passed on to the charter schools that had been receiving the funding.

Susan Inman, director of learning opportunities with the ODE, said the state had no idea the federal money was at risk.

"Up until recently, we thought this was an acceptable way to do things," Inman said, "This has always been the process of Oregon in the past."

When the ODE received a smaller payment in the summer of 2010, administrators assumed the rest would be on the way. When the money still hadn't come a year later, they realized they would be receiving only $595,000, instead of $7 million.

"We were suddenly made aware that the rest of the disbursement would not be forthcoming," said Inman. "They put the brakes on all of a sudden."

More than a month after Inman informed the schools of the cut, she still didn't have an answer as to why Oregon's grant procedure for dispersing grants had suddenly become a problem. She was not optimistic that the money would come in later.

"We are not holding out much hope at this point," said Inman, adding that the ODE was continuing discussions with the federal agency.

While state and federal administrators try to iron out their communications issues, new charter schools across the state, including Logos, are dealing with the cuts.

"It doesn't seem right that schools are penalized because of this type of issue," said VonDoloski.

While Logos was able to continue operating without the final grant, other charter schools were relying on the money to open their schools for the first time.

A proposed charter school at Kids Unlimited in Medford received its first incentive grant in January, and Executive Director Tom Cole says without the additional funding, the task would be more challenging.

"What we're hearing from the state level isn't great news," said Cole, who hopes to create a charter school to serve about 100 sixth- through eighth-grade students.

Kids Unlimited received $55,000 from the ODE to plan its school, which may operate as part of the Medford School District.

While Cole is still working to revise his charter school plans, and wasn't prepared to immediately apply for the next phase of the implementation, he had planned to use the funds in the future.

"It's going to be even harder to get things off the ground than before," said Cole, "and there is no guarantee that money will ever be available again."

Reach reporter Teresa Ristow at 541-776-4459 or by e-mail at tristow@mailtribune.com