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1. Superintendent of Direction for the California schools, Jack O'Connell, initiated an audit more than a year back into the fiscal issues of the Choices for Youth and Opportunities for Learning (OYO) schools. The OYO is a chain of independent research study charter schools within the California schools system, which are privately run however moneyed by the state. The OYO California schools serve students who have dropped out of the standard high schools. They currently have about 15,000 students in 40 shop places throughout the state. These California schools trainees do the majority of their work at home, conference with instructors twice a week. According to state records, student accomplishment test and high school exit exam ratings are above average, as compared to other alternative high schools within the California schools system. According to a Los Angeles Times short article of August 10th, just on car donation 11 percent of OYO trainees graduated throughout the 2003-2004 school year. The remainder of students that left school that year either left, were expelled, or transferred to other schools. The California schools' audit was carried out by the Fiscal Crisis and Management Assistance Group, who concluded their analysis and presented their findings in a report that was launched in August 2006. The audit points out accounting flaws, overpayments by the state, disputes of interest, nepotism, extreme payment, and mixing personal business issues with public schools. The OYO was established and still operated by John and Joan Hall, previous instructors from Hollywood High School. They have fully complied with the California schools' audit, but conflict most of the findings. Some examples from the audit report are: • Accounting Problems and Overpayments. The Halls count each of their teachers as 1.92 full-time positions. Their representative, Stevan Allen, specified that this is a typical practice for charter schools in the California schools system and is a legitimate technique for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell thinks instructors ought to be counted just as one full-time position each. The auditors disagreed, mentioning that standard California schools teachers spend much less time working each year than those at OYO. Nevertheless, the auditors thought the 1.92 amount is inflated. This example, alone, accounts for majority of the $57 million overpayment. In addition, the report noted a number of doubtful costs. One example of unrestrained costs, given by the Times was an $18,000 personnel celebration held at Disneyland. Allen safeguarded that event as an effort at relationship building in between staff members, who are spread across the state. He noted that the expenses was less than $50 per team member. • Disputes of Interest and Mixing Private Company with Public Schools. Besides the charter schools, the Halls own and operate several personal organisations that sell materials and services to schools. The Times noted that the Choices in OYO was the nonprofit part of the setup, with the Opportunities part being for-profit. The audit calls this practice and setup into concern. • Excessive Settlement. The audit also questions the combined salaries for the Halls, which is $600,000 every year. The report mentions that it might be excessive for the quantity of time the couple really works. • Nepotism. The Halls created a different charity with $10.8 countless the California schools' financing, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little cash has been invested toward education so far. The Halls compete that they formerly had actually asked for guidance on their operation from the California

2. schools often times, but never ever received any response. Thus, they attempted to follow California schools requirements as best they could with their understanding of the policies. Even O'Connell yielded that none of the mentioned practices are prohibited. The audit recommends the California schools ought to try to recover the $57 million in overpayment from the OYO. O'Connell has actually sent the report to the state's attorney general's office for evaluation and any needed action.