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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 Options 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 funded by the state. The OYO California schools serve trainees who have actually dropped out of the standard high schools. They currently have about 15,000 students in 40 shop areas across the state. These California schools trainees do many of their work at home, meeting 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 students graduated throughout the 2003-2004 academic year. The remainder of trainees that left school that year either dropped out, were expelled, or transferred to other schools. The California schools' audit was performed by the Financial Crisis and Management Assistance Team, 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, conflicts of interest, nepotism, extreme payment, and mixing personal company concerns with public schools. The OYO was founded and still operated by John and Joan Hall, previous instructors from Hollywood High School. They have actually completely complied with the California schools' audit, however disagreement most of the findings. Some examples from the audit report are: • Accounting Flaws and Overpayments. The Halls count each of their instructors 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 technique for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell thinks teachers should 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. Nevertheless, the auditors thought the 1.92 amount is pumped up. This example, alone, represent over half of the $57 million overpayment. In addition, the report noted numerous doubtful expenses. One example of unrestrained costs, offered by the Times was an car donation birmingham al $18,000 staff celebration held at Disneyland. Allen defended that occasion as an effort at relationship structure in between team member, who are spread throughout the state. He kept in mind that the expenses was less than $50 per personnel member. • Conflicts of Interest and Mixing Private Organisation with Public Schools. Besides the charter schools, the Halls own and operate a number of private companies that offer products and services to schools. The Times noted that the Options 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. • Excessive Payment. The audit likewise questions the combined incomes for the Halls, which is $600,000 each year. The report mentions that it may be extreme for the amount of time the couple in fact works. • Nepotism. The Halls produced a different charity with $10.8 million of the California schools' financing, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little money has been invested toward education so far. The Halls compete that they previously had actually requested guidance on their operation from the California schools often times, but never ever got any reaction. Thus, they tried to follow California schools requirements as

2. finest they could with their understanding of the policies. Even O'Connell conceded that none of the cited practices are unlawful. The audit advises the California schools must attempt to recuperate the $57 million in overpayment from the OYO. O'Connell has sent the report to the state's attorney general's workplace for evaluation and any required action.