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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 concerns of the Alternatives 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 trainees who have left of the standard high schools. They currently have about 15,000 students in 40 store places throughout the state. These California schools trainees do the majority of their work at house, meeting with instructors two times a week. According to state records, trainee achievement 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 article of August 10th, just 11 percent of OYO students graduated during 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 Assistance Group, 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, extreme compensation, and blending personal organisation concerns with public schools. The OYO was established and still run by John and Joan Hall, previous teachers from Hollywood High School. They have completely worked together with the California schools' audit, however conflict many 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 approach for compensating school staff for longer days and year-round schedules. California schools superintendent O'Connell thinks instructors must be counted only as one full-time position each. The auditors disagreed, mentioning that traditional California schools instructors spend much less time working each year than those at OYO. However, the auditors believed the 1.92 amount is inflated. This example, alone, represent more than half of the $57 million overpayment. Additionally, the report kept in mind numerous questionable expenses. One example of unrestrained spending, offered by the Times was an $18,000 staff celebration held at Disneyland. Allen protected that event as an effort at relationship building in between staff members, who are spread throughout the state. He kept in mind that the costs was less than $50 per staff member. • Disputes of Interest and Mixing Private Service with Public Schools. Besides the charter schools, the Halls own and operate a number of personal businesses that sell materials and services to schools. The Times noted that the Options in OYO was the nonprofit part of the setup, with the Opportunities part being for-profit. The audit calls this practice and setup into question. • Extreme Compensation. The audit likewise questions the combined incomes for the Halls, which is $600,000 annually. The report mentions that it might be extreme for the amount of time the couple actually works. • Nepotism. The Halls developed 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 money has been invested towards education therefore far. The Halls contend that they formerly had asked for assistance on their operation from the California schools lot of times, however never ever received any response. Thus, they tried to follow California schools requirements as finest they could with their understanding of the policies. Even car donation charities new york O'Connell yielded

2. that none of the cited practices are unlawful. The audit recommends the California schools must attempt 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 review and any necessary action.