California鈥檚 largest charter school operator misused millions of dollars in state money through numerous legal and ethical lapses, an audit by the state department of education released last week found.
April 14, 2005, is available online from California鈥檚 . ()
The audit chronicles the demise of what was believed to be the nation鈥檚 largest network of charter schools, the California Charter Academy, which claimed 4,500 K-12 students and 7,000 adult students at more than 50 campuses and online in the 2003-04 school year.
In response, the state鈥檚 leading charter-advocacy group is calling on state officials to crack down on districts that authorize charters but fail to keep a close eye on them.
The audit found that the 5-year-old CCA had illegally spent upward of $20 million in state and federal money on schools that were illegally opened, salaries that could not be justified, and questionable contracts. Further, the audit found that the CCA had overcharged teachers and school administrators for health-insurance premiums that it never paid.
State officials launched the investigation last fall. (鈥淐alif. Charter Failure Affects 10,000 Students,鈥� Sept. 1, 2004.)
State Superintendent of Public Instruction Jack O鈥機onnell said that his office would try to recover at least some of the misspent funds.
鈥淭he magnitude of waste of precious education funds outlined in this audit is appalling,鈥� he said in announcing the findings. 鈥淲e will pursue every legal option to track down the adults involved who funneled money away from students in California.鈥�
Claim Filed
The state education department will file a $23 million claim in bankruptcy court against the CCA鈥檚 for-profit management company, the Education Administrative Services Corp., and its founder, C. Steven Cox. The investigation found that the CCA鈥橲 board of directors also was negligent because it allowed Mr. Cox to serve in conflicting roles as the head of the CCA and his management company.
The 107-page audit report alleges that Mr. Cox bilked CCA schools out of millions dollars by overpayments to his management company.
The audit says that 鈥渋n these multiple positions, [Mr. Cox] had an opportunity to direct millions of dollars of CCA funds to benefit himself, his corporation, his family, and his friends and associates. He took advantage of that opportunity.鈥�
Mr. Cox could not be reached for comment last week. The Victorville, Calif.-based CCA office phones had been disconnected
Mr. O鈥機onnell, the state superintendent, is forming a committee of education department officials and charter school stakeholders to analyze the state鈥檚 existing charter school laws and recommend changes.
