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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 issues of the Options 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 privately 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 students in 40 shop locations throughout the state. These California schools trainees do most of their work at home, meeting with teachers twice a week. According to state records, trainee achievement test and high school exit examination 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, only 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 Financial Crisis and Management Support Group, who concluded their analysis and presented their findings in a report that was released in August 2006. The audit points out accounting defects, overpayments by the state, disputes of interest, nepotism, extreme settlement, and blending personal company concerns with public schools. The OYO was established and still operated by John and Joan Hall, former teachers from Hollywood High School. They have fully cooperated with the California schools' audit, but disagreement most 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, stated 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 thinks teachers need to be counted only 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 amount is pumped up. This example, alone, represent more than half of the $57 million overpayment. In addition, the report noted several doubtful expenses. One example of unrestrained spending, given by the Times was an $18,000 personnel celebration held at Disneyland. Allen protected that event as an attempt at relationship structure between employee, who are spread throughout the state. He kept in mind that the expenses was less than $50 per team member. • Disputes of Interest and Mixing Private Business with Public Schools. Besides the charter schools, the Halls own and operate several personal companies that offer materials and services to schools. The Times noted that the Alternatives 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 Compensation. The audit likewise questions the combined salaries for the Halls, which is $600,000 each year. The report mentions that it might be extreme for the quantity 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 loan has been invested towards education so far. The Halls compete that they previously had actually requested guidance on their operation from the California schools sometimes, but never ever received any reaction. Therefore, they tried to follow California schools requirements as finest they could with their understanding of the policies. Even O'Connell yielded that car

2. donation concord ca none of the pointed out practices are prohibited. The audit advises the California schools need to attempt to recover the $57 million in overpayment from the OYO. O'Connell has actually sent the report to the state's attorney general of the United States's office for review and any necessary action.