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1. Superintendent of Instruction for the California schools, Jack O'Connell, initiated an audit more than a year earlier into the fiscal issues of the Options for Youth and Opportunities for Knowing (OYO) schools. The OYO is a chain of independent 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 actually dropped out of the conventional high schools. They currently have about 15,000 students in 40 store areas throughout the state. These California schools trainees do the majority of their work at home, meeting with instructors two times 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 post of August 10th, only 11 percent of OYO trainees finished throughout the 2003-2004 school year. The rest of trainees that left school that year either left, were expelled, or moved to other schools. The California schools' audit was conducted by the Fiscal Crisis and Management Assistance Team, who concluded their analysis and presented their findings in a report that was released in August 2006. The audit mentions accounting flaws, overpayments by the state, conflicts of interest, nepotism, extreme settlement, and blending private service concerns with public schools. The OYO was established and still operated by John and Joan Hall, former instructors from Hollywood High School. They have completely cooperated with the California schools' audit, but disagreement the majority of the findings. Some examples from the audit report are: • Accounting Defects and Overpayments. The Halls count each of their instructors as 1.92 full-time positions. Their representative, Stevan Allen, mentioned that this is a common practice for charter schools in the California schools system and is a legitimate approach for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell believes instructors ought to be counted just as one full- time position each. The auditors disagreed, pointing out that conventional California schools teachers spend much less time working each year than those at OYO. Nevertheless, the auditors believed the 1.92 amount is pumped up. This example, alone, represent more than half of the $57 million overpayment. Additionally, the report noted numerous questionable expenses. One example of unrestrained costs, provided by the Times was an $18,000 personnel party held at Disneyland. Allen defended that event as an attempt at relationship building in between staff members, who are scattered throughout the state. He noted that the expenses was less than $50 per team member. • Conflicts of Interest and Mixing Private Company with Public Schools. Besides the charter schools, the Halls own and run several personal businesses that offer products and services to schools. The Times kept in mind that the Options in OYO was the nonprofit part of the setup, with the Opportunities part being for-profit. The how to value a car donation audit calls this practice and setup into question. • Excessive Payment. The audit also questions the combined wages for the Halls, which is $600,000 each year. The report mentions that it may be excessive for the quantity of time the couple actually works. • Nepotism. The Halls produced a separate charity with $10.8 countless the California schools' financing, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little loan has actually been spent towards education so far.

2. The Halls contend that they formerly had asked for assistance on their operation from the California schools numerous times, but never got any response. Hence, they attempted to follow California schools requirements as best they might with their understanding of the policies. Even O'Connell yielded that none of the mentioned practices are prohibited. The audit suggests the California schools ought to try to recover the $57 million in overpayment from the OYO. O'Connell has sent out the report to the state's attorney general of the United States's office for review and any essential action.