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1. Superintendent of Guideline for the California schools, Jack O'Connell, started an audit more than a year earlier into the financial concerns of the Choices 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 actually left of the conventional high schools. They currently have about 15,000 students in 40 store areas across the state. These California schools students do most of their work at home, conference with instructors twice a week. According to state records, student accomplishment test and high school exit test ratings are above average, as compared to other alternative high schools within the California schools system. According to a Los Angeles Times post of August 10th, just 11 percent of OYO students finished during the 2003-2004 school year. The rest of trainees that left school that year either left, were expelled, or moved to other schools. The California schools' audit was carried out by the Financial Crisis and Management Support Team, 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, conflicts of interest, nepotism, excessive compensation, and blending personal business issues with public schools. The OYO was founded and still run by John and Joan Hall, previous teachers from Hollywood High School. They have totally cooperated with the California schools' audit, however disagreement many 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, mentioned that this is a common practice for charter schools in the California schools system and is a legitimate technique for compensating school staff for longer days and year-round schedules. California schools superintendent O'Connell thinks instructors need 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. However, the auditors thought the 1.92 quantity is inflated. This example, alone, accounts for more than half of the $57 million overpayment. In addition, the report kept in mind a number of questionable costs. One example of unrestrained spending, offered by the Times was an $18,000 staff party held at Disneyland. Allen protected that event as an effort at relationship building in between personnel members, who are scattered throughout the state. He kept in mind that the costs was less than $50 per staff member. • Disputes of Interest and Mixing Private Service with Public Schools. Besides the charter schools, the Halls own and operate several personal services 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. • Excessive Payment. The audit also questions the combined salaries for the Halls, which is $600,000 each year. The report states that it might be extreme for the quantity of time the couple really 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 child, Jamie Hall. Little money has actually been invested toward education so far. The Halls compete that they previously had actually asked for guidance on their operation from the California schools often times, however never ever received any response. Thus, 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

2. pointed out practices are illegal. The audit suggests the California which charities accept car donations schools must try to recuperate 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 workplace for evaluation and any essential action.