Orange County Register, August 14, 2006
Appeal-Democrat, Marysville, CA, August 18, 2006

Editorial: An audit shows misplaced spending at a charter-schools group.

Since their inception in 1992, we have been strong supporters of charter schools in California. Charters are public schools that are started by parents, teachers and others to work mostly as independent schools outside state and local schools bureaucracies. They provide alternatives for parents and students and competition for traditional public schools. More than 500 now are operating in this state.

But all along we have insisted that charters must operate under exceptional academic and financial standards. After all, they are schooling children and spending the taxpayers' money.

So we welcome audits such as that released Aug. 9 by the Fiscal Crisis and Management Assistance Team and MGT of America. It audited the Opportunities for Learning Charter Schools and Options for Youth (OFL/OFY), which are operated by husband and wife team John and Joan Hall, at the request of the education departments in Orange County and four other counties. OFL/OFY operates eight schools and 40 satellite centers in California. An Opportunities for Learning school is located in Dana Point and is sponsored by the Capistrano Unified School District.

The audit found that for the 2002-03 to 2004-05 school years, the schools claimed $57 million in "potential ... cumulative disallowed funding," meaning the money was spent wrongly. Tax funds went to such spending as "more than $32,000 for employee parties at Disneyland" and "$4,500, including alcohol purchases of $963, at the Ritz-Carlton in 2004-05 for a meeting of 23 board members and OFY staff." And "at least some" funds were spent "on trying to establish an independent study school in Illinois" – not California.

The audit recommends that for these schools, among other things, strengthening existing conflict-of-interest policies and implementing a new policy "to improve controls over the use of credit cards and the documentation of expenses."

The problems with these charters show how charters need to insist on excellence in both academics and the business side of running a school, Lance Izumi told us; he's director of education studies at the Pacific Research Institute and co-author of "Free to Learn: Lessons from Model Charter Schools," an excellent book describing how the best charters operate. He said the charter school movement, which still is relatively new, in recent years has been insisting on higher standards.

The major charter group in here is the California Charter Schools Association. Senior Vice President of Leadership and Quality Peter Thorpe told us that the association canceled the membership of OFL/OFY in December 2004 because of "questions over financial transparency." In January 2005, the association notified state Superintendent of Public Instruction Jack O'Connell of the membership cancellation, and recommended an audit of OFL/OFY.

OFL/OFY needs to clean up its fiscal act immediately or see its charters denied. But one of the benefits of charters is that, if they fail academically or financially, they can be closed rather easily, something that can't be said about traditional public schools. Far from seeing this as a blow against charter schools, to us this is a necessary quality-control measure.