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1. Superintendent of Direction for the car donation vs trade in California schools, Jack O'Connell, started an audit more than a year back into the fiscal issues 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 but funded by the state. The OYO California schools serve trainees who have left of the conventional high schools. They presently have about 15,000 trainees in 40 store areas throughout the state. These California schools trainees do the majority of their work at home, meeting with instructors two times a week. According to state records, student 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 post of August 10th, just 11 percent of OYO students graduated throughout the 2003-2004 school year. The remainder of trainees that left school that year either dropped out, were expelled, or transferred to other schools. The California schools' audit was performed by the Financial Crisis and Management Help Group, who concluded their analysis and presented their findings in a report that was released in August 2006. The audit points out accounting flaws, overpayments by the state, conflicts of interest, nepotism, extreme settlement, and blending personal 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 actually fully worked together with the California schools' audit, but dispute most 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 representative, Stevan Allen, stated that this is a typical practice for charter schools in the California schools system and is a genuine technique for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell thinks teachers need to be counted only as one full-time position each. The auditors disagreed, mentioning that conventional California schools instructors invest much less time working each year than those at OYO. However, the auditors thought the 1.92 amount is pumped up. This example, alone, accounts for over half of the $57 million overpayment. In addition, the report kept in mind several doubtful expenditures. One example of unrestrained costs, given by the Times was an $18,000 staff celebration held at Disneyland. Allen protected that occasion as an attempt at relationship building in between team member, who are scattered across the state. He noted that the expenses was less than $50 per personnel member. • Conflicts of Interest and Mixing Private Business with Public Schools. Besides the charter schools, the Halls own and operate numerous personal companies that offer products and services to schools. The Times noted that the Choices 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 Settlement. The audit also questions the combined incomes for the Halls, which is $600,000 each year. The report states that it might be extreme for the quantity 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 child, Jamie Hall. Little money has actually been spent towards education so far. The Halls compete that they previously had actually requested guidance on their operation from the California schools lot of times, however never ever received any response. Therefore, they tried to follow California schools requirements as best they could with their understanding of the policies. Even O'Connell conceded that none of

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