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1. Superintendent of Instruction for the California schools, Jack O'Connell, initiated an audit more than a year earlier into the fiscal issues of the Options for Youth and Opportunities for Knowing (OYO) schools. The OYO is a chain of independent research study charter schools within the California schools system, which are independently run but moneyed by the state. The OYO California schools serve students who have left of the traditional high schools. They currently have about 15,000 students in 40 storefront locations across the state. These California schools students do the majority of their work at home, meeting with instructors two times a week. According to state records, trainee achievement test and high school exit test 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 finished throughout the 2003-2004 school year. The remainder of students that left school that year either left, were expelled, or moved to other schools. The California schools' audit was conducted by the Fiscal Crisis and Management Support Group, who concluded their analysis and presented their findings in a report that was launched in August 2006. The audit cites accounting defects, overpayments by the state, disputes of interest, nepotism, extreme settlement, and blending personal company concerns with public schools. The OYO was founded and still operated by John and Joan Hall, previous teachers from Hollywood High School. They have actually completely worked together with the California schools' audit, however disagreement the majority 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 spokesperson, Stevan Allen, mentioned that this is a common practice for charter schools in the California schools system and is a legitimate method for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell believes instructors ought to be counted only as one full-time position each. The auditors disagreed, citing that standard California schools teachers invest much less time working each year than those at OYO. Nevertheless, the auditors thought the 1.92 quantity is pumped up. This example, alone, accounts for majority of the $57 million overpayment. In addition, the report kept in mind numerous questionable expenditures. One example of unrestrained spending, provided by the Times was an $18,000 personnel party held at Disneyland. Allen safeguarded that event as an effort at relationship structure between team member, who are spread throughout the state. He kept in mind that the costs was less than $50 per employee. • Disputes of Interest and Mixing Private Business with Public Schools. Besides the charter schools, the Halls own and run several private organisations that offer materials and car donation goodwill st louis services to schools. The Times noted that the Options in OYO was the nonprofit 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 wages for the Halls, which is $600,000 yearly. The report mentions that it may be excessive for the quantity of time the couple really works. • Nepotism. The Halls created a separate charity with $10.8 million of the California schools' funding, called Pathways in Education. The charity is run by their child, Jamie Hall. Little money has actually been spent towards education so far. The Halls contend that they previously had actually requested assistance on their operation from the California schools lot of times, but never got any action. Therefore, they tried to follow California schools requirements as

2. finest they could with their understanding of the policies. Even O'Connell yielded that none of the cited practices are illegal. The audit suggests the California schools should try to recuperate the $57 million in overpayment from the OYO. O'Connell has sent out the report to the state's lawyer general's office for review and any needed action.