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1. Superintendent of Instruction for the California schools, Jack O'Connell, initiated an audit more than a year back 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 trainees who have left of the standard high schools. They currently have about 15,000 students in 40 car donation red cross shop locations throughout the state. These California schools students do the majority of their work at home, meeting with teachers 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 article of August 10th, just 11 percent of OYO students finished during the 2003-2004 academic year. The rest of students that left school that year either dropped out, 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 released in August 2006. The audit points out accounting defects, overpayments by the state, conflicts of interest, nepotism, excessive settlement, and blending private service issues with public schools. The OYO was founded and still operated by John and Joan Hall, previous teachers from Hollywood High School. They have totally complied with the California schools' audit, but dispute the majority of the findings. Some examples from the audit report are: • Accounting Flaws 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 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 believes teachers must be counted just as one full-time position each. The auditors disagreed, citing that conventional 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, represent majority of the $57 million overpayment. Additionally, the report noted several doubtful expenses. One example of unrestrained spending, provided by the Times was an $18,000 staff party held at Disneyland. Allen safeguarded that occasion as an attempt at relationship structure in between employee, who are scattered throughout the state. He kept in mind that the expenses was less than $50 per staff member. • Disputes of Interest and Mixing Private Organisation with Public Schools. Besides the charter schools, the Halls own and run numerous personal services that offer products and services to schools. The Times noted that the Choices 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. • Extreme Compensation. The audit likewise questions the combined salaries for the Halls, which is $600,000 each year. The report mentions that it might be excessive for the amount of time the couple in fact 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 daughter, Jamie Hall. Little loan has been invested towards education hence far. The Halls contend that they formerly had actually requested guidance on their operation from the California schools sometimes, however never ever got any reaction. Hence, they attempted to follow California schools requirements as best they might with their understanding of the policies. Even O'Connell yielded that none of the

2. cited practices are illegal. 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.