NorthJersey.com and the USA TODAY NETWORK New Jersey spent more than a year delving into the mysteries surrounding how charter schools in New Jersey pay for the school buildings they occupy.

What we found was startling: Very few of the schools actually own the property — even though taxpayers on the local, state and federal level foot the bills to purchase, finance and rent properties.

As a result, millions of public dollars routinely pay for buildings that are used by charter schools but owned privately. Flaws in the law and a lack of public policy and oversight have led to a system where private groups are created — or step in — to own and finance real estate. Charter schools rent the buildings, paying off the debt with the tax dollars they receive to operate.

Some of the largest charter operators have been allowed by the state to monopolize hundreds of millions of dollars in federal aid earmarked for public school construction, helping to create networks of privately-owned buildings. The groups have been able to exploit a loophole in the law, which doesn’t require schools built with this cash to be owned by the public. Some of the methods used to access this aid are under review by the IRS.

Details of real estate development and financing are often secret, or buried so deeply in documents that the public has virtually no way of scrutinizing how their tax dollars are being spent. Contracts struck with the schools or their support groups have positioned investors to pull multi-million-dollar profits from projects.

Here are seven takeaways from our work, which can be read in its entirety at NorthJersey.com.

1. Public money for private property

Millions in tax dollars routinely go to pay for buildings owned privately but used by charter schools. State and local taxpayers paying to lease buildings, in many cases repaying loans taken out to construct or renovate them. The landlords are private groups created to support the charter schools. In Newark, the federal government is kicking in hundreds of millions in aid for charter school buildings that are privately owned.

2. Hidden transactions

The private groups that support charter schools – some of them called "Friends of" groups – are using millions of dollars in taxpayer money but unlike public schools are not subject to open public records laws. That makes it difficult to follow public money through sometimes complicated transactions. The public, for example, can’t see contracts with developers or the millions of dollars in fees being paid to them. It can’t see how one group will use $15 million in “dividends,” or profits, from one project and millions more in interest it will make from a loan.

3. Flaws in the law

State legislators put up barriers to building ownership and didn’t create a way for charter schools to fund their facilities. The schools can’t take on long-term debt that allows lenders to go after assets other than the property used to secure loans. That leads some schools to create private companies to buy property and borrow money. Schools are not allowed to use revenues to construct buildings from the ground up. And there has been some debate in the charter school community over what the state allows.

4. Cashing in on charters

Some investors have been able to pull multi-million-dollar profits from charter school projects – sometimes close to a 70 percent markup. Some charter schools or their support groups agree to pay premiums as much as 25 percent when they refinance deals. One investor charged a charter school support group $6.4 million in fees alone for two buildings, which was more than the amount paid for the properties.

5. Cozy relationships

The charter schools’ private support companies are separate entities but often with close connections. Some board members and officers are on both sides of the same loan. In one case, a chief financial officer of a charter management company was an officer with three support groups involved in the same deal: one that loaned money, one that borrowed it, and another that owns the property.

6. Manipulating bonds

The largest charter school operators were able to get the most out of a federal bond program designed to spur school construction with interest-free loans. But instead of allowing the bonds to be purchased by investors, as is typical, they created groups that bought them for themselves and are collecting hundreds of millions of dollars in federal interest payments as income. Those payments helped to repay bank loans that had been taken out to buy the bonds, financing the renovation or construction of privately-owned buildings. Some of the practices have attracted the attention of the IRS.

7. Lax oversight

State education officials don’t review building financing or lease agreements before they are signed. They don’t monitor the associated groups that own real estate for charter schools. State agencies have issued more than $800 million in bonds to construct, purchase and renovate buildings for charter schools without considering who will own them or how much the public will pay in rent.