These schools are generally subject to the same set of  requirements that govern traditional schools within the district. Number of Schools Managed by Education Management Companies Is Increasing; Descriptive Information on Achievement Widely Available

Although the number of public schools operated by private, for-profit  management companies has risen rapidly in recent years, these schools  still comprise a very small proportion of all public schools nationwide. Descriptive information about  achievement in these schools was widely available in the form of  individual school report cards that often provided comparisons with state  or district averages, but often not with similar traditional schools. School and company reports provided  useful information on student achievement, but generally were not  designed to answer research questions about the effectiveness of privately  managed schools compared with traditional schools. By school year 2002-03, the companies had schools in  25 states and the District of Columbia, with about 48 percent of the  privately managed schools in Arizona and Michigan. The number of private management companies identified by the Arizona  State University researchers also increased over the same period, but the  companies varied greatly in terms of the number of schools they operated. No Consistent Pattern of Differences in Scores on State Tests Found between Public Schools Managed by Private Companies and Comparable, Traditional Elementary Schools

Differences in student performance on state assessments between  privately managed public schools and comparable, traditional public  schools varied by metropolitan areas for the grade levels in our study.Average student scores were significantly higher in both reading and math  for fifth graders in 2 privately managed schools, 1 in Denver and 1 in  San Francisco, compared with similar traditional public schools, as were  gains over time when we examined a previous year’s scores for these  students. No significant differences in reading  or math scores were found between the privately managed school and  comparison schools in Phoenix. II, where tables 5 and 6 show detailed results of  these analyses.) 6.) Scores on State Tests Were Lower in Privately Managed Schools in Cleveland and St. Paul

Average scores on state tests for fourth grade students attending privately  managed schools in Cleveland and fifth grade students attending privately  managed schools in St. Paul were significantly lower compared with  scores of students attending similar traditional public schools. Scores on State Tests in Privately Managed Schools Varied in Detroit and Were Similar to Traditional Schools in Phoenix

Average scores for fourth grade students in Detroit varied, but tended to  be lower in both reading and math for students attending privately  managed schools than for students attending similar traditional schools.As in other locations, student populations in schools we studied in Detroit  tended to be minority and low income. For selected grade levels, we compared the individual  student scores of students attending the privately managed schools with  those of students in the similar traditional public schools. This resulted in a  total of 14 privately managed schools included in the study, 8 of which  were located in Detroit. We used a variety of approaches  to verify the accuracy of these data. In addition, our matching process may  not have produced equivalent groups for comparison.
Why GAO Did This Study

Over the last decade, a series of educational reforms have increased opportunities for private companies to play a role in public education. For instance, school districts have sometimes looked to private companies to manage poorly performing schools. The accountability provisions of the No Child Left Behind Act of 2001 may further increase such arrangements because schools that continuously fail to make adequate progress toward meeting state goals are eventually subject to fundamental restructuring by the state, which may include turning the operation of the school over to a private company. GAO determined the prevalence of privately managed public schools and what could be learned about student achievement in these schools from publicly available sources. To do so, GAO examined existing data on the number and location of privately managed schools and reviewed a variety of reports on student achievement. In addition, GAO compared standardized test scores of students attending privately managed public schools with scores of students attending similar traditional public schools. GAO identified privately managed schools that had been in operation for four years or more in 6 large cities and matched these schools with a group of traditional schools serving similar students. GAO then analyzed student scores on state reading and math tests at selected grade levels, controlling for differences in student populations.

What GAO Found

The number of public schools managed by private companies has tripled in the last 5 years according to data compiled by university researchers, although such schools comprise less than 0.5 percent of all public schools. In the 2002-03 school year, nearly 50 private companies managed over 400 public schools nationwide. These companies managed schools in 25 states and the District of Columbia, with about one-half of the schools located in Arizona and Michigan. Information on student achievement at these schools was available in the form of state- or district-issued school report cards and annual reports issued by the management companies. Although these reports provided valuable descriptive information, they were generally not designed to answer research questions about the relative effectiveness of privately managed schools compared with traditional schools in raising student achievement. Consequently, GAO conducted test score analyses that provide further insight into student achievement in these schools. GAO's analyses of student test scores in 6 cities yielded mixed results. Scores for 5th grade students in Denver and San Francisco were significantly higher in both reading and math in two privately managed schools when compared with traditional schools serving similar students. However, 4th grade scores in reading and math were significantly lower in a privately managed public school in Cleveland, as were 5th grade scores in two privately managed schools in St. Paul. In Detroit, where eight privately managed schools were studied, reading and math scores of 5th graders in privately managed schools were generally lower. In Phoenix, GAO found no significant differences. GAO's results are limited to the schools and grade levels examined and may not be indicative of performance at other schools.