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1. Superintendent of Direction for the California schools, Jack O'Connell, started an audit more than a year ago into the financial concerns of the Options for Youth and Opportunities for Learning (OYO) schools. The OYO is a chain of independent study charter schools within the California schools system, which are independently run but moneyed by the state. The OYO California schools serve trainees who have dropped out of the conventional high schools. They currently have about 15,000 trainees in 40 storefront places throughout the state. These California schools students do the majority of their work at house, meeting with teachers two times a week. According to state records, trainee accomplishment 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, just 11 percent of OYO students graduated throughout the 2003-2004 academic year. The remainder of trainees that left school that year either left, 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 released in August 2006. The audit cites accounting problems, overpayments by the state, conflicts of interest, nepotism, extreme compensation, and mixing private 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 actually completely cooperated with the California schools' audit, but dispute many of the findings. Some examples from the audit report are: • Accounting Flaws and Overpayments. The Halls count each of their teachers as 1.92 full-time positions. Their representative, Stevan Allen, stated that this is a common practice for charter schools in the California schools system and is a legitimate technique for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell believes teachers ought to be counted only as one full- time position each. The auditors disagreed, pointing out 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, accounts for majority of the $57 million overpayment. In addition, the report kept in mind a number of questionable costs. One example of unrestrained spending, provided by the Times was an $18,000 personnel celebration held at Disneyland. Allen protected that event as an attempt at relationship building in between team member, who are spread across which car donation charity is the best the state. He kept in mind that the expenses was less than $50 per team member. • Disputes of Interest and Mixing Private Company with Public Schools. Besides the charter schools, the Halls own and operate several private services that sell materials and services to schools. The Times kept in mind 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 concern. • Excessive Payment. The audit likewise questions the combined salaries for the Halls, which is $600,000 each year. The report specifies that it may be excessive for the amount of time the couple in fact works. • Nepotism. The Halls developed a separate charity with $10.8 countless the California schools' financing, called Pathways in Education. The charity is run by their child, Jamie Hall. Little money has actually been spent toward education so far. The Halls compete that they previously had asked for guidance on their operation from the California schools

2. sometimes, but never ever received any reaction. Therefore, they attempted to follow California schools requirements as finest they could with their understanding of the policies. Even O'Connell conceded that none of the mentioned practices are illegal. The audit recommends the California schools ought to try to recuperate 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 evaluation and any required action.