Houston ISD superintendent did not illegally divert state money to out-of-state schools, TEA says

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The Texas Education Agency has cleared Houston School District Acting Superintendent Mike Miles of wrongdoing after he was accused of improperly diverting millions of dollars in state funds to his Colorado Charter School system.

After Spectrum News and The Texas Observer called for an investigation earlier this year, the education agency concluded Tuesday that neither Miles — whom the agency picked last year to lead the state’s largest school district — nor his charter school network, Third Future Schools, committed violations all applicable laws of Texas,” the 29-page investigative report said.

The investigation found in part that checks sent from a cooperating school district in Texas to Third Future Schools’ Colorado address went there because the Colorado location handles accounting services for the network’s Texas branch, which is independently operated. But the checks were eventually deposited into the Texas branch’s bank account.

“Based on the evidence obtained and analyzed during the investigation, there are no merits to the allegations in the media reports that state funds were improperly diverted to Texas public schools,” the report said.

The agency is closing its investigation and “no further action will be taken at this time,” the report said.

In an email sent to the Houston school district community on Tuesday, Miles called the earlier reporting “a baseless distraction and an attempt to undermine and discredit the good work happening in the schools.

“Now we can do what we always do and make progress on behalf of our students,” Miles said.

Earlier this year, Spectrum News reported that the Texas chapter of Third Future Schools — which receives funding from multiple Texas school districts to run campuses in the state — may have used public funds from its Odessa school to offset financial losses at a sister school in Odessa . Colorado.

The Texas Observer later reported that it had identified “additional irregularities” regarding the charter network’s disclosure of expenses.

Miles denied wrongdoing, accusing previous reporting of mischaracterizing “common financial arrangements between charter schools and the charter management organizations that support them” and welcoming an investigation into the network’s activities.

State investigators agreed with Miles, saying they found no evidence that school districts in Texas had deposited money into the bank account of Third Future Schools in Colorado. Third Future Schools-Texas reimburses the Colorado location for administrative services it provides to the entire charter network, the report said.

The report also states that overall there is no state or local policy requiring Third Future Schools-Texas to disclose agreements with the Colorado office regarding the purchasing of services, although it adds that there is no effort done to hide the partnership from Texas school districts.

The allegations “cannot be substantiated or have been proven to be false,” the report says.

Miles has been a polarizing figure since the Texas Education Agency accused him and an unelected school board last year of taking the helm of the Houston school district. In rationalizing the takeover, the state pointed to misconduct by the previous administration and the unsatisfactory academic performance rating of Wheatley High School in Houston’s Fifth Ward, where an overwhelming majority of students are black and Hispanic and live in low-income households .

Under Miles’ leadership, the district has experienced extraordinary staff turnover and declining student enrollment. Miles has faced accusations of running a military-style school environment, where teachers have limited freedom to teach in a way they see fit and children are exhausted and disengaged from learning.

Miles, on the other hand, has touted students’ improvement on the state’s standardized tests as evidence that his model is effective, an achievement that Mike Morath, commissioner of the Texas Education Agency, has also publicly recognized and praised. In November, Houston voters will decide whether to approve $4.4 million in academic and infrastructure improvements for the school district — the largest proposal of its kind in state history — which some see as a litmus test for Miles’ support among the public.