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1. Superintendent of Guideline for the California schools, Jack O'Connell, started 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 moneyed by the state. The OYO California schools serve students who have dropped out of the standard high schools. They presently have about 15,000 students in 40 shop areas across the state. These California schools students do the majority of their work at house, meeting 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 short article of August 10th, only 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 Help Team, 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 business concerns with public schools. The OYO was founded and still run by John and Joan Hall, former instructors from Hollywood High School. They have actually totally worked together with the California schools' audit, however dispute most of the findings. Some examples from the audit report are: • Accounting Flaws and Overpayments. The Halls count each car donation to family member 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 method for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell believes instructors must be counted only as one full-time position each. The auditors disagreed, mentioning that traditional California schools teachers spend much less time working each year than those at OYO. However, the auditors thought the 1.92 amount is inflated. This example, alone, accounts for majority of the $57 million overpayment. Additionally, the report noted several questionable expenditures. One example of unrestrained costs, offered by the Times was an $18,000 personnel party held at Disneyland. Allen protected that event as an effort at relationship structure in between team member, who are spread across the state. He noted that the costs was less than $50 per personnel member. • Disputes of Interest and Mixing Private Business with Public Schools. Besides the charter schools, the Halls own and operate numerous personal services that sell materials and services to schools. The Times kept in mind 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 concern. • Excessive Payment. The audit also questions the combined incomes for the Halls, which is $600,000 each year. The report specifies that it may be extreme for the quantity of time the couple actually works. • Nepotism. The Halls created 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 cash has actually been invested towards education hence far. The Halls compete that they formerly had requested guidance on their operation from the California schools lots of times, but never ever got any reaction. Hence, they attempted to follow California schools requirements as finest they could with their understanding of the policies. Even O'Connell yielded that none of the mentioned

2. practices are prohibited. The audit advises the California schools should attempt to recuperate the $57 million in overpayment from the OYO. O'Connell has actually sent out the report to the state's attorney general's workplace for review and any essential action.