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1. Superintendent of Guideline for the California schools, Jack O'Connell, started an audit more than a year ago into the financial concerns of the Choices 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 independently run but moneyed by the state. The OYO California schools serve trainees who have dropped out of the standard high schools. They presently have about 15,000 students in 40 shop areas throughout the state. These California schools trainees do the majority of their work at home, conference with instructors two times a week. According to state records, student achievement test and high school exit examination ratings are above average, as compared to other alternative high schools within the California schools system. According to a Los Angeles Times article of August 10th, only 11 percent of OYO trainees graduated throughout the 2003-2004 academic year. The rest of trainees that left school that year either left, were expelled, or transferred to other schools. The California schools' audit was performed by the Fiscal Crisis and Management Support Team, who concluded their analysis and provided their findings in a report that was launched in August 2006. The audit points out accounting defects, overpayments by the state, disputes of interest, nepotism, excessive settlement, and mixing personal company issues with public schools. The OYO was established and still run by John and Joan Hall, former teachers from Hollywood High School. They have actually completely complied with the California schools' audit, but dispute the majority of the findings. Some examples from the audit report are: • Accounting Problems 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 genuine method for compensating school staff for longer days and year-round schedules. California schools superintendent O'Connell thinks teachers ought to be counted just as one full-time position each. The auditors disagreed, pointing out that traditional California schools instructors spend much less time working each year than those at OYO. Nevertheless, the auditors believed the 1.92 quantity is pumped up. This example, alone, represent more than half of the $57 million overpayment. Furthermore, the report kept in mind several questionable expenses. One example of unrestrained costs, provided by the Times was an $18,000 personnel celebration held at Disneyland. Allen protected that occasion as an attempt at relationship building in between team member, who are spread across the state. He noted that the costs was less than $50 per team member. • Disputes of Interest and Mixing Private Organisation with Public Schools. Besides the charter schools, the Halls own and operate a number of personal services that sell materials and services to schools. The Times noted that the Options in who accepts car donations OYO was the not-for-profit part of the setup, with the Opportunities part being for-profit. The audit calls this practice and setup into question. • Excessive Compensation. The audit likewise questions the combined salaries for the Halls, which is $600,000 every year. The report specifies that it might be excessive for the amount of time the couple in fact 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 child, Jamie Hall. Little loan has been invested towards education so far. The Halls compete that they previously had requested assistance on their operation from the California schools lots of times, however never received any action. Thus, they tried to follow California schools requirements as finest they could with their understanding of the policies. Even O'Connell conceded that none of the pointed out

2. practices are unlawful. The audit suggests the California schools should try to recover the $57 million in overpayment from the OYO. O'Connell has actually sent out the report to the state's chief law officer's workplace for evaluation and any needed action.