HOUSTON — Texas state lawmakers, local leaders, and others want answers, in the wake of a new report claiming millions of taxpayer dollars were diverted out of Texas to help balance the books at Colorado charter schools founded by Houston ISD Superintendent Mike Miles. Wednesday morning, the superintendent sent a letter disputing the report's findings.
The money does not involve Houston Independent School District money. The report focuses on the man handpicked to run the state's largest district – Mike Miles.
Miles was appointed to run Houston's schools by the Texas Education Agency in 2023. He started the Colorado charter schools and other charter schools in Texas under the name Third Future Schools between 2015 and 2020.
A recent investigative report from Spectrum News Texas raised questions about how those charter schools were funded. The report says the Colorado charter schools were in the red, facing millions of dollars in debt. The report also claims that Texas charters were receiving millions in taxpayer funding, and debts for Third Future Schools in Colorado were being offset with money from Texas.
The report highlights a pair of more than million-dollar checks sent from the Texas schools to Colorado.
In a response to the report, Miles said it is either "badly misunderstanding," or "intentionally misrepresents" Third Future Schools' finances.
"I have an obligation to make very clear that during my tenure Third Future Schools was always a responsible steward of every public dollar received, all financial agreements and obligations were approved by local boards of directors, authorizers, and in our Texas schools, the school district with which TFS partnered," Miles said, in part.
He said the schools paid administrative fees to the Third Futures Schools' central office, which is located in Colorado.
"This is common practice for charters and other independent partnership schools and is not only allowed, but anticipated by Texas' educational law," Miles said.
Read Miles' full response below:
"Friends, Partners, and Board Members:
"I had initially planned not to respond to an article circulating that badly misunderstands, or worse, intentionally misrepresents the financial practices of Third Future Schools. While I have not worked at the Third Future Schools network for more than a year, I find the piece irresponsibly inaccurate, and I cannot let this kind of misinformation go uncorrected.
"I have an obligation to make very clear that during my tenure Third Future Schools was always a responsible steward of every public dollar received, all financial agreements and obligations were approved by local boards of directors, authorizers, and in our Texas schools, the school district with which TFS partnered. Eight different districts in three states have trusted Third Future Schools with the education of their most underserved students and have overseen TFS’s overall financial health and propriety. Third Future Schools has a consistent track record of clean audits year over year, and I have no reason to believe that is any different now. These baseless claims cheapen the hard work and dedication of thousands of staff and students.
"The budgets of all Third Future Schools in Texas are attached to the management agreement with the local school district and are part of the approval process. Administrative fees are applied to all schools in all states in order for the central office to oversee and monitor the schools as well as provide network-wide supports (such as finance and human resources) from people and departments in the central office, which is located in Colorado. This is common practice for charters and other independent partnership schools and is not only allowed, but anticipated by Texas’ education law. Spectrum News either intentionally or, through gross incompetence, mischaracterized these common place financial arrangements between charter schools and the charter management organizations that support them.
"The Spectrum News reporter also worked to undermine the progress we made in Dallas ISD. It appears he is resurrecting old tactics that are not worth more time and attention. I do not intend to comment further on these spurious assertions. I am committed to staying focused on the tremendous challenge of improving Texas’ largest district.
"We have an obligation to finish the year strong for our students and staff, and that is where I will direct my time and attention. I thank you for your partnership and ask that you do the same as we look ahead to the 24-25 school year and beyond. We’ve accomplished a great deal and there is even more left to do."
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We also asked the TEA for a response, since it’s the organization that appointed Miles as the superintendent of HISD. Here's what they said: “TEA is aware of the report and is reviewing the matter.”
Community Voices for Education called for a federal criminal investigation into allegations against Miles. CVPE also called for Miles’ resignation and the reversal of TEA’s HISD takeover.
“The results of this bombshell investigation should serve as a wakeup call for parents, students, and teachers who aren’t already outraged about Greg Abbott’s takeover of our school system,” said Ruth Kravetz, a former HISD chemistry teacher and co-founder of the Community for Voices of Public Education. “Greg Abbott opened the door to this type of fraud by installing an unelected board of managers and putting Mike Miles in charge of our schools. We’ve warned for years that laundering taxpayer dollars and giving it to private schools was part of their plan, and now we have the receipts to prove it. This scheme goes beyond bad policy or governance, it’s corruption and we’re calling for a federal investigation into this scheme along with the immediate resignation of Miles. Houston deserves a public education system run by competent, democratically elected representatives who share our values and are in it for the right reasons. We won’t stop fighting until that happens.”
In a statement, CVPE called on the community to contact their elected representatives and ask them to call for a federal investigation into how Texas public education funds are being used. It encouraged community members to speak at the next HISD Board of Managers meeting on Thursday.
The president of the Houston Federation of Teachers echoed calls for a federal investigation and demanded the resignation of Miles.
“Just days after learning that Mike Miles is laying off hundreds of custodians, librarians and removing popular principals from our schools, we are now learning that he’s treating our public school system as his own personal piggy bank,” said Jackie Anderson. “The diversion of Texas public funds to shore up his private charter school company in Colorado is an outrageous betrayal of trust and requires a federal criminal investigation. The corruption of this deal stretches beyond just Mike Miles - the board of managers is also complicit in this shadowy scheme by failing to provide oversight and transparency. Greg Abbott’s takeover of our schools has failed. Teachers, students and their families deserve better and in response we are demanding the immediate resignation of Mike Miles and the immediate exit of the TEA from HISD.”
Harris County Commissioner Rodney Ellis also shared a statement that reads in part:
“This also calls into question every dollar he has spent as superintendent. While teacher benefits are being slashed, libraries are being closed, and support staff are being let go, HISD parents and taxpayers deserve a robust and timely investigation to ensure that tax dollars are being used appropriately and ethically.”
State Representatives Jarvis Johnson and Gene Wu are also critical of Miles.
Wu posted X, 'The level of corruption is genuinely impressive.'
KHOU 11 spoke to Johnson on Tuesday. He talked about The Houston Federation of Teachers calling for Miles' resignation and a federal criminal investigation.