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1. Superintendent of Instruction 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 study charter schools within the California schools system, which are independently run however moneyed by the state. The OYO California schools serve trainees who have actually dropped out of the standard high schools. They currently have about 15,000 students in 40 storefront places across the state. These California schools students do the majority of their work at house, conference with instructors twice a week. According to state records, trainee accomplishment 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 article of August 10th, just 11 percent of OYO trainees graduated throughout the 2003-2004 school year. The remainder of students that left school that year either left, were expelled, or transferred to other schools. The California schools' audit was carried out by the Financial Crisis and Management Assistance Group, who concluded their analysis and presented their findings in a report that was released in August 2006. The audit points out accounting problems, overpayments by the state, disputes of interest, nepotism, extreme settlement, and blending private organisation concerns with public schools. The OYO was founded and still operated by John and Joan Hall, former teachers from Hollywood High School. They have completely worked together 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 instructors as 1.92 full-time positions. Their spokesperson, Stevan Allen, mentioned that this is a typical car vs donation practice for charter schools in the California schools system and is a genuine approach for compensating school personnel for longer days and year- round schedules. California schools superintendent O'Connell thinks teachers must be counted just as one full- time position each. The auditors disagreed, mentioning that conventional California schools teachers spend much less time working each year than those at OYO. However, the auditors believed the 1.92 amount is inflated. This example, alone, represent majority of the $57 million overpayment. Furthermore, the report noted several questionable expenses. One example of unrestrained spending, given by the Times was an $18,000 personnel celebration held at Disneyland. Allen protected that event as an attempt at relationship structure in between team member, who are scattered across the state. He noted that the costs 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 run numerous private businesses that offer products and 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 Settlement. The audit likewise questions the combined incomes for the Halls, which is $600,000 each year. The report specifies that it might be extreme for the amount of time the couple actually works. • Nepotism. The Halls produced a separate charity with $10.8 countless the California schools' funding, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little money has been spent toward education therefore far. The Halls compete that they formerly had actually asked for guidance on their operation from the California schools sometimes, but never received any response. Thus, 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 pointed out practices are illegal. The audit suggests the California schools ought to attempt to recover the $57 million in overpayment from the OYO. O'Connell has sent out the report to the state's chief law officer's workplace for evaluation and any required action.