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1. Superintendent of Guideline for the California schools, Jack O'Connell, started an audit more than a year ago into the financial issues of the Alternatives 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 privately run however moneyed by the state. The OYO California schools serve trainees who have actually dropped out of the standard high schools. They presently have about 15,000 students in 40 shop areas across the state. These California schools students do most of their work at home, conference with teachers twice a week. According to state records, trainee achievement test and high school exit exam ratings 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 graduated 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 Financial Crisis and Management Help Group, who concluded their analysis and provided their findings in a report that was released in August 2006. The audit cites accounting problems, overpayments by the state, conflicts of interest, nepotism, excessive compensation, and mixing personal organisation issues with public schools. The OYO was established and still operated by John and Joan Hall, previous instructors from Hollywood High School. They have actually completely complied with the California schools' audit, however dispute 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, specified that this is a typical practice for charter schools in the California schools system and is a legitimate method for compensating school staff for longer days and year-round schedules. California schools superintendent O'Connell thinks instructors ought to be counted only as one full-time position each. The auditors disagreed, pointing out that standard California schools instructors invest much less time working each year than those at OYO. Nevertheless, the auditors believed the 1.92 quantity is inflated. This example, alone, accounts for more than half of the $57 million overpayment. In addition, the report noted several questionable costs. 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 building between team member, who are spread throughout the state. He kept in mind that the costs was less than $50 per team member. • Conflicts of Interest and Mixing Private Organisation with Public Schools. Besides the charter schools, the Halls own and run numerous personal businesses that sell products and services to schools. The Times kept in mind that the Choices in OYO was the nonprofit part of the setup, with the Opportunities car donation to npr part being for-profit. The audit calls this practice and setup into concern. • Excessive Settlement. The audit also questions the combined salaries for the Halls, which is $600,000 every year. The report states that it may be excessive for the amount of time the couple in fact 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 loan has been invested toward education thus far. The Halls contend that they previously had asked for assistance on their operation from the California schools numerous times, but never ever got any action. Thus, they attempted to follow California schools requirements as

2. finest they could with their understanding of the policies. Even O'Connell yielded that none of the mentioned practices are illegal. The audit advises the California schools should try to recover the $57 million in overpayment from the OYO. O'Connell has sent out the report to the state's attorney general's workplace for evaluation and any necessary action.