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1. Superintendent of Guideline for the California schools, Jack O'Connell, initiated an audit more than a year ago into the fiscal concerns 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 independently run but 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 trainees in 40 shop places across the state. These California schools trainees do most of their work at home, meeting with instructors twice a week. According to state records, student accomplishment test and high school exit test scores 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 during the 2003-2004 school year. The remainder of trainees that left school that year either left, were expelled, or transferred to other schools. The California schools' audit was conducted by the Fiscal Crisis and Management Support Team, who concluded their analysis and presented their findings in a report that was released in August 2006. The audit points out accounting problems, overpayments by the state, conflicts of interest, nepotism, excessive payment, and blending private company concerns with public schools. The OYO was founded and still run by John and Joan Hall, previous teachers from Hollywood High School. They have totally cooperated with the California schools' audit, however disagreement 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, stated that this is a common practice for charter schools in the California schools system and is a genuine technique for compensating school staff for longer days and year-round schedules. California schools superintendent O'Connell believes teachers must be counted only as one full-time position each. The auditors disagreed, pointing out that standard California schools teachers invest much less time working each year than those at OYO. However, the auditors thought the 1.92 amount is pumped up. This example, alone, represent over half of the $57 million overpayment. Additionally, the report kept in mind several questionable expenses. One example of unrestrained spending, provided by the Times was an $18,000 staff party held at Disneyland. Allen safeguarded that occasion as an effort at relationship building between personnel members, who are spread throughout the state. He noted that the costs was less than $50 per staff member. • Disputes of Interest and Mixing Private Organisation with Public Schools. Besides the charter schools, the Halls own and run a number of private companies that offer materials and services to schools. The Times kept in mind that the Choices in 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. • Extreme Settlement. The audit also questions the combined salaries for the Halls, which is $600,000 every year. The report states that it might be excessive for the amount of time the couple in fact works. • Nepotism. The Halls created a separate charity with $10.8 million of the California schools' financing, called Pathways in Education. The charity is run by their child, Jamie Hall. Little money has been invested towards education car donation kidney therefore far. The Halls compete that they previously had requested assistance on their operation from the California schools sometimes, but never received any reaction. Thus, they tried to follow California schools requirements as finest they might with their understanding of the policies. Even O'Connell conceded that none of the mentioned

2. practices are illegal. The audit recommends the California schools must try to recover the $57 million in overpayment from the OYO. O'Connell has actually sent out the report to the state's lawyer general's office for evaluation and any needed action.