Posted on 08/09/2006 7:58:12 PM PDT by NormsRevenge
SACRAMENTO
A chain of family operated charter schools overcharged the state more than $57 million over three years and paid its two top executives a total of $644,000 in one year to run schools for at-risk students, a state audit released Wednesday found.
State Superintendent of Public Instruction Jack O'Connell immediately referred the audit of the for-profit Opportunities for Learning and the nonprofit Options for Youth schools to Attorney General Bill Lockyer, but the schools' operators challenged the findings.
Spokeswoman Kerry Mazzoni, a former secretary of education, said the eight schools and more than 40 independent study satellite centers serve seventh-grade through 19-year-old students who otherwise would quit school or fail. They claim the state has underpaid them for vital services.
"I will work vigorously to ensure that the state is fully reimbursed for these funds," O'Connell said. "The operators of these schools are reaping millions in profit from public funds intended primarily for the education of students."
He said he would urge lawmakers in the next legislative session to close loopholes in the state's charter schools law that allowed the charter schools to transfer $10.8 million to another corporation that was run by the daughter of husband-and-wife owners Joan and John Hall. That corporation is not subject to state education laws.
The audit, which covered the 2002-03 to 2004-05 school years, said the charter school companies claimed $57 million more than they were entitled to by incorrectly reporting data that included the number of credentialed teachers, student-teacher ratios and student attendance rates.
The audit was requested by county education superintendents in Los Angeles, Orange, Sacramento, San Bernardino and Siskiyou counties, where the companies have charters serving more than 15,000 students. Those superintendents will ask local district attorneys to investigate, O'Connell said.
Charter schools receive public funding and must follow state laws, but often use alternative approaches to teaching students.
Auditors questioned the salaries the Halls received, which were a combined $644,000 in 2004-05. State officials said that was far higher than the salaries for superintendents of similar-sized districts.
Consultants hired by the Halls said their salaries were comparable to the pay for chief executives of private companies.
The audit also found:
_ Their contracts allowed the Halls to be reimbursed for a Lexus SUV and a Chevrolet Suburban, along with airline tickets, hotel bills and other expenses. Several Hall family members, including their four children, also were employed by the various companies, the report said.
_ Over the three-year period, Options for Youth paid more than $32,000 for employee parties at Disneyland. It spent $4,500 including a tab for $963 in alcohol at the Ritz-Carlton in 2004-05 for a meeting of 23 board members and staff.
The state slashed funding to the school to 60 percent of the previous year in 2002-03 and to 70 percent in the next two years because of questions about expenditures.
The companies sued the state and the county offices of education in February over their system of paying teachers. The schools claim many teachers as the equivalent of nearly two full-time teachers because of the longer school year and longer days compared with traditional public schools.
If they win the lawsuit, the companies would owe the state about $26 million, rather than $57 million, the state said.
The Halls' consultants said they fully complied with auditors' questions and have always been transparent in their operations.
Mazzoni said the state's own data show the schools are successful at helping would-be dropouts stay in school and go on to graduate. Information from the state Department of Education posted online showed the schools have had mixed results but have made improvements.
"We deal with the arguably most at-risk students in the state students that have dropped out of school," Mazzoni said. "Our program is comparably very good, and we're just really puzzled why they would want to suggest that our program was not good."
O'Connell wants to ensure that state money is being spent on students, said his spokeswoman, Hilary McLean. He urged county superintendents to strictly monitor the schools.
Mazzoni said the disputed money is not "sitting in a bank account someplace. This money was spent on the academic program. That is an issue that we truly need to work out with the department."
In Burbank Unified, one of the districts with an Options for Youth charter, the schools have been responsive about requests for information and have complied with all terms of their charter, Superintendent Greg Bowman said Wednesday.
"They provide a service that some students benefit from, and we think that it's a viable option," Bowman said.
The schools intend to continue operating, some with waiting lists.
"We don't anticipate any bump in the road in terms of serving those students," said Jennifer Kliewer, director of instruction for Options for Youth.
___
On the Net:
Read the audit at: http://www.fcmat.org
Like the state does a better job..
And lets see how the anti-American 'aztlan' school in LA has been spending its money? I can't imagine those marxists being responsible with public money considering how much they respect the people of California.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.