Additional Irregularities, Possible Impropriety in Mike Miles Charter School Saga, Texas Observer Report Reveals

Coming off the heels of Spectrum News' jaw-dropping report that uncovered a possible multi-million dollar scandal involving state-installed Houston ISD Superintendent Mike Miles' former charter school, a new report from the Texas Observer has uncovered even more irregularities and possible financial improprieties.

As previously covered in the Hotline, the Spectrum report revealed that Third Future Schools - a network of charter schools over which Miles previously presided as superintendent and that operates schools in Texas, Colorado, Louisiana, and Tennessee - allegedly funneled roughly 40% of their Texas taxpayer-funded budget out of state for "unspecified administrative costs and services." Miles' tenure at Third Future Schools began in 2016 after he was ousted from his role as Dallas ISD superintendent by the majority of that district's democratically elected school board; he left Third Future Schools in 2023 to take his current position as HISD's appointed superintendent.

New reporting from the Texas Observer reveals additional irregularities in Third Future Schools' finances and governance documents. The irregularities are primarily concerned with the interrelations between the Third Future Schools parent entity and each of its state branches, including Third Future Schools-Texas.

The Texas Observer uncovered that, despite being registered as a separate entity, Third Future Schools-Texas was effectively run by the Colorado-based nonprofit rather than its own Texas board of directors. The Colorado administrators, including then-CEO Mike Miles, handled key operational functions like finances, hiring, and academic performance reviews. Texas board members, though listed in official agreements and board meeting minutes, had little to no involvement in day-to-day operations or financial decisions. This disconnect suggests that the Texas entity seemed to act as a front for the Colorado nonprofit, raising concerns about proper oversight and the true independence of Third Future Schools-Texas.

Relatedly, in its Form 990 tax filings from 2020 to 2023, Third Future Schools-Texas listed no paid employees, even though Texas public dollars were used to help pay for the salaries of its Colorado-based administrative leadership. Perhaps most damningly, no Texas board members are signatories to the bank account for Third Future Schools-Texas. Members of the Colorado-based parent board authorized Colorado-based administrators (including Miles) to be signatories to the Third Future Schools-Texas bank account.

Third Futures Schools-Texas didn't even set up an independent bank account until March 2021, over a year after the entity started receiving Texas tax dollars, raising questions about how those dollars were spent.

Another key finding from the Texas Observer's reporting found that Third Future Schools never set up a physical administrative office in Texas, opting instead to use a mailbox at a shared workspace in Austin, which it no longer maintains. This goes against Texas rules that require a physical address where official documents can be delivered in person. By not having a proper office, Third Future Schools-Texas may be skirting state regulations, raising questions about its operations and transparency.

Finally, the Texas Observer uncovered that Miles himself was not the only Third Future Schools alum to come onto the HISD payroll. Miles, who is the district's highest paid employee with a $380,000 annual salary, also hired at least three former Third Future Schools employees to serve in top leadership positions with the district.

Third Future Schools, the Texas Education Agency, and Miles himself have commented on the accusations in the previous Spectrum report, but none offered evidence to fully refute the allegations. TEA is currently investigating the allegations included in the Spectrum report, and Miles and Third Future Schools have denied wrongdoing.

These questions about Miles' record naturally lead to questions about his prudence as the steward of Texas' largest school district. When Miles took over HISD last summer, the district had over $1.1 billion in its reserves, but Miles ended his first year as superintendent running a $528 million deficit, with plans to liquidate district resources and to cut hundreds of critical school staffing positions.

The HISD community is not going to let the threat that Mike Miles poses to the district go unaddressed. Educators, parents, students, and community members are invited to attend AFT's No More Harm: Rally for Public Education Rally next Wednesday, July 24 from 12:30-1:30 p.m. at the Anheuser-Busch Stage at Discovery Green Park in downtown Houston. Join thousands of attendees from the national American Federation of Teachers (AFT) convention as we unite to fight back against state takeovers of public schools, in Houston and across the country.

Bring your own signs. Enjoy the park during and after the event. Public parking is available. RSVP here.

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