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1. Superintendent of Instruction for the California schools, Jack O'Connell, initiated an audit more than a year back into the fiscal concerns of the Choices for Youth and Opportunities for Knowing (OYO) schools. The OYO is a chain of independent research study charter schools within the California schools system, which are independently run but funded by the state. The OYO California schools serve trainees who have actually left of the conventional high schools. They currently have about 15,000 trainees in 40 shop areas throughout the state. These California schools trainees do many of their work at home, conference with teachers twice a week. According to state records, student achievement 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 article of August 10th, only 11 percent of OYO students graduated during the 2003-2004 academic year. The rest of students that left school that year either left, were expelled, or transferred to other schools. The California schools' audit was conducted by the Financial Crisis and Management Support Group, who concluded their analysis and provided 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 blending personal service issues with public schools. The OYO was founded and still run by John and Joan Hall, previous instructors from Hollywood High School. They have totally cooperated with the California schools' audit, however conflict many of the findings. Some examples from the audit report are: • Accounting Defects and Overpayments. The Halls count each of their teachers as 1.92 full-time positions. Their spokesperson, Stevan Allen, specified that this is a common practice for charter schools in the California schools system and is a genuine approach for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell thinks instructors need to be counted only as one full-time position each. The auditors disagreed, pointing out that traditional California schools teachers spend much less time working each year than those at OYO. Nevertheless, the auditors believed the 1.92 amount is inflated. This example, alone, accounts for majority of the $57 million overpayment. Furthermore, the report kept in mind several questionable expenses. One example of unrestrained spending, provided by the Times was an $18,000 personnel party held at Disneyland. Allen defended that occasion as an attempt at relationship structure in between employee, who are spread throughout the state. car donation kbb value He kept in mind that the costs 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 numerous private services that offer products and services to schools. The Times noted 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 Payment. The audit also questions the combined wages for the Halls, which is $600,000 every year. The report specifies that it may be extreme for the quantity of time the couple in fact works. • Nepotism. The Halls created a different 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 spent towards education so far. The Halls compete that they formerly had actually asked for guidance on their operation from the California schools sometimes, but never ever got any response. Therefore, they tried to follow California schools requirements as finest they might with their understanding of the policies. Even O'Connell conceded that none of

2. the cited practices are unlawful. The audit suggests the California schools need to try to recover the $57 million in overpayment from the OYO. O'Connell has sent the report to the state's attorney general's office for evaluation and any required action.