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1. Superintendent of Direction for the California schools, Jack O'Connell, initiated an audit more than a year earlier into the financial concerns of the Alternatives 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 independently run however funded by the state. The OYO California schools serve trainees who have left of the standard high schools. They currently have about 15,000 trainees in 40 shop locations across the state. These California schools trainees do many of their work at house, conference with teachers two times a week. According to state records, trainee achievement 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 short article of August 10th, just 11 percent of OYO students graduated throughout the 2003-2004 academic year. The rest of students 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 Assistance Group, who concluded their analysis and provided their findings in a report that was launched in August 2006. The audit mentions accounting flaws, overpayments by the state, conflicts of interest, nepotism, excessive settlement, and mixing private company issues with public schools. The OYO was founded and still operated by John and Joan Hall, former teachers from Hollywood High School. They have completely cooperated with the California schools' audit, however conflict the majority of the findings. Some examples from the audit report are: • Accounting Defects and Overpayments. The Halls count each of their teachers as 1.92 full-time positions. Their spokesperson, Stevan Allen, specified that this is a typical 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 thinks instructors should be counted just 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. 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 noted a number of questionable expenditures. One example of unrestrained costs, given by the Times was an $18,000 personnel party held at Disneyland. Allen protected that occasion as an attempt at relationship structure between employee, who are scattered across the state. He kept in mind that the expenses was less than $50 per personnel member. • Conflicts of Interest and Mixing car donation holland mi Private Business 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 Alternatives in OYO was the nonprofit part of the setup, with the Opportunities part being for-profit. The audit calls this practice and setup into question. • Excessive Settlement. The audit also questions the combined incomes for the Halls, which is $600,000 every year. The report states that it might be extreme for the amount of time the couple really works. • Nepotism. The Halls created a different charity with $10.8 million of the California schools' financing, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little cash has been invested towards education therefore far. The Halls compete that they previously had requested assistance on their operation from the California schools often times, however never got any action. Therefore, they attempted to follow California schools requirements as finest they might with their understanding of the policies. Even O'Connell conceded that none of the pointed out

2. practices are prohibited. The audit advises the California schools ought to attempt to recuperate the $57 million in overpayment from the OYO. O'Connell has actually sent the report to the state's chief law officer's office for evaluation and any essential action.