Superintendent of Direction for the California schools, Jack O'Connell, started an audit more than a year earlier into the fiscal issues of the Options 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 students who have left of the traditional high schools. They presently have about 15,000 trainees in 40 store places across the state. These California schools trainees do the majority of their work at house, meeting with instructors two times a week. According to state records, trainee achievement test and high school exit examination scores 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, only 11 percent of OYO students finished during the 2003-2004 academic year. The rest of trainees 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 Support Group, who concluded their analysis and provided 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, excessive compensation, and mixing personal organisation 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 dispute many 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 representative, Stevan Allen, mentioned that this is a common practice for charter schools in the California schools system and is a legitimate approach for compensating school staff for longer days and year-round schedules. California schools superintendent O'Connell thinks teachers should be counted just as one full-time position each. The auditors disagreed, pointing out that conventional California schools instructors spend much less time working each year than those at OYO. Nevertheless, the auditors thought the 1.92 quantity is pumped up. This example, alone, accounts for more than half of the $57 million overpayment.

Furthermore, the report noted a number of doubtful costs. One example of unrestrained spending, offered by the Times was an $18,000 personnel celebration held at Disneyland. Allen defended that event as an effort at relationship building in between employee, who are spread throughout the state. He noted that the expenses was less than $50 per employee.

• Conflicts of Interest and Mixing Private Service with Public Schools. Besides the charter schools, the Halls own and operate numerous personal companies that sell materials and services to schools. The Times noted that the Alternatives 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 concern.

• Excessive Payment. The audit likewise questions the combined wages for the Halls, which is $600,000 every year. The report specifies that it may be extreme for the amount of time the couple in fact works.

• Nepotism. The Halls developed a separate charity with $10.8 million of the California schools' financing, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little money has actually been invested toward education so far.

The Halls compete that they previously had actually requested assistance on their operation from the California schools lot of times, but never car donation san jose received any response. Hence, they tried to follow California schools requirements as finest they could with their understanding of the policies. Even O'Connell yielded that none of the cited practices are illegal.

The audit suggests the California schools need to attempt 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 review and any necessary action.