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1. Superintendent of Instruction for the California schools, Jack O'Connell, started an audit more than a year earlier into the financial concerns of the Alternatives 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 however moneyed by the state. The OYO California schools serve trainees who have actually left of the conventional high schools. They presently have about 15,000 trainees in 40 storefront locations throughout the state. These California schools trainees do the majority of their work at home, conference with instructors twice a week. According to state records, trainee achievement test and high school exit exam 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 students that left school that year either dropped out, were expelled, or transferred to other schools. The California schools' audit was conducted by the Fiscal 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 settlement, and blending personal company issues with public schools. The OYO was founded and still operated by John and Joan Hall, previous teachers from Hollywood High School. They have actually fully cooperated with the California schools' audit, however conflict the majority can i deduct car donation 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 spokesperson, Stevan Allen, specified that this is a typical practice for charter schools in the California schools system and is a genuine approach for compensating school staff for longer days and year-round schedules. California schools superintendent O'Connell believes teachers need to be counted just as one full-time position each. The auditors disagreed, pointing out that traditional California schools teachers invest much less time working each year than those at OYO. However, the auditors thought the 1.92 quantity is pumped up. This example, alone, represent more than half of the $57 million overpayment. Furthermore, the report noted several questionable expenditures. One example of unrestrained costs, given by the Times was an $18,000 personnel celebration held at Disneyland. Allen defended that event as an effort at relationship building between employee, who are spread across the state. He kept in mind that the expenses was less than $50 per employee. • Conflicts of Interest and Mixing Private Service with Public Schools. Besides the charter schools, the Halls own and run several personal services that offer materials and services to schools. The Times kept in mind 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 Compensation. The audit also questions the combined incomes for the Halls, which is $600,000 annually. The report specifies that it may be excessive for the amount of time the couple in fact works. • Nepotism. The Halls developed a different charity with $10.8 countless the California schools' funding, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little loan has actually been spent towards education therefore far. The Halls contend that they previously had actually requested guidance on their operation from the California schools lot of times, but never ever received any response. Thus, they attempted to follow California schools

2. requirements as finest they could with their understanding of the policies. Even O'Connell conceded that none of the cited practices are prohibited. The audit recommends the California schools ought to try to recover the $57 million in overpayment from the OYO. O'Connell has sent out the report to the state's attorney general of the United States's office for evaluation and any necessary action.