Superintendent of Guideline for the California schools, Jack O'Connell, initiated an audit more than a year back into the fiscal concerns of the Alternatives for Youth and Opportunities for Knowing (OYO) schools. The OYO is a chain of independent 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 dropped out of the standard high schools. They currently have about 15,000 trainees in 40 storefront places throughout the state. These California schools trainees do the majority of their work at home, conference with teachers twice a week. According to state records, trainee accomplishment 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 article of August 10th, only 11 percent of OYO students finished throughout the 2003-2004 school year. The remainder of trainees that left school that year either left, were expelled, or moved 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 cites accounting problems, overpayments by the state, disputes of interest, nepotism, extreme compensation, and blending private company issues with public schools.

The OYO was founded and still operated by John and Joan Hall, previous instructors from Hollywood High School. They have actually fully worked together with the California schools' audit, however dispute most 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, stated that this is a common practice for charter schools in the California schools system and is a legitimate approach for compensating school personnel for longer days and year-round schedules. California schools superintendent O'Connell thinks teachers need to be counted just as one full-time position each. The auditors disagreed, citing that traditional California schools instructors invest car donation vs selling much less time working each year than those at OYO. Nevertheless, the auditors thought the 1.92 amount is inflated. This example, alone, accounts for more than half of the $57 million overpayment.

Additionally, the report noted several doubtful expenditures. One example of unrestrained costs, offered 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 throughout the state. He kept in mind that the costs was less than $50 per staff member.

• Conflicts of Interest and Mixing Private Service with Public Schools. Besides the charter schools, the Halls own and run numerous personal companies that offer materials 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 concern.

• Extreme Payment. The audit likewise questions the combined wages for the Halls, which is $600,000 yearly. The report states that it may be extreme for the quantity of time the couple really works.

• Nepotism. The Halls created a different charity with $10.8 countless the California schools' funding, called Pathways in Education. The charity is run by their daughter, Jamie Hall. Little cash has been spent towards education so far.

The Halls compete that they formerly had actually asked for guidance on their operation from the California schools lots of times, however never received any action. Therefore, they attempted to follow California schools requirements as best they might with their understanding of the policies. Even O'Connell conceded that none of the mentioned practices are unlawful.

The audit suggests the California schools should try to recover the $57 million in overpayment from the OYO. O'Connell has sent the report to the state's chief law officer's workplace for review and any necessary action.