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  • Dozens of fixes proposed to deter more mega-cases of charter school fraud

    Dozens of fixes proposed to deter more mega-cases of charter school fraud


    A multi-ethnic group of elementary age children are playing with blocks in class at their desks.

    Credit: Christopher Futcher / iStock

    Audacious, multimillion dollar scandals by two California charter school operators within the past decade exposed vulnerabilities to fraud resulting from inept and negligent oversight and inadequate auditing. A pair of inquiries into those weaknesses have concluded that several dozen actions could help spot, address and potentially deter future attempts by charter school operators to evade state laws and regulations.

    Both reports were issued within the past two months. One is a joint effort of the Legislative Analyst’s Office (LAO) and the Fiscal Crisis Management Assistance Team, a state fiscal oversight agency known as FCMAT. 

    The other is by the Anti-Fraud Task Force of the California Charter Authorizing Professionals, a nonprofit association for school districts and county offices of education. Its report reminded legislators and policymakers what’s at stake in failures of oversight: “Every theft of funds from our public schools not only harms the students, but also undermines public confidence in our public education system.” 

    A third and final report, concentrating on auditing reforms, will be released before June 30 by a multi-agency task force. Chaired by state Comptroller Malia Cohen, it was commissioned by San Diego Superior Court Judge Robert Longstreth, who presided over a jaw-dropping case of financial abuse.

    That case involved the now-defunct virtual charter school network A3 Education, which thrived because of a total breakdown of accountability systems. Its founders, Sean McManus and Jason Schrock, pleaded guilty in 2021 to a conspiracy to commit theft of public dollars, extracting $400 million in attendance-based state revenue, much of it based on phantom enrollments. They siphoned at least $50 million to a company they owned while promising services to students that were never provided. In return for serving four years on house arrest, the executives pledged to repay $37 million.

    A3 operated 19 charter schools approved by small school districts in a half-dozen counties that relied on the 1% to 3% in annual fees to balance their budgets. Collectively, the fees produced millions of dollars. The districts didn’t supervise effectively, because they lacked the capacity, expertise and, in some cases, motivation to hold charter schools accountable. 

    Big revenue for a tiny district

    Among them is Dehesa School District, with 84 students and one school in the San Diego County foothills. It chartered three A3 schools. Dehesa’s former superintendent was the only superintendent of the 11 people indicted in the A3 scandal.

    Dehesa also granted charters to two schools for Inspire Charter Schools, the other suspected perpetrator of large-scale fraud. Inspire, a home-school charter network with a dozen schools in multiple counties with, at one point, 24,380 students, directed 15% of its more than $100 million income to a corporation created by its founder, Herbert “Nick” Nichols III.

    Inspire enticed families to enroll by awarding $2,600 per student to spend on academic enrichment activities of their choice, including annual passes to Disneyland and Big Air Trampoline Park.

    An audit by FCMAT found that the records of financial expenditures and transfers of money from school to school, all run by Nichols’ central office, were so poorly kept and hard to track that FCMAT couldn’t prove fraud or other illegalities — although the deficiencies in recordkeeping increased the likelihood of them, the audit said. Nichols, who received $1,056,000 in advance pay, agreed to pay it back in a severance agreement in 2019 but declined repeated requests to speak with FCMAT, according to the audit.

    A3 and Inspire may have committed the largest-scale fraud, but they weren’t the only cases of embezzlement and probably won’t be the last. Last week, Al Muratsuchi, D-Torrance, who chairs the Assembly Education Committee, and Josh Newman, D-Fullerton, who chairs the Senate Education Committee, requested approval of a state audit of a charter school and related operations after whistleblowers told Sacramento TV news channel ABC10 about suspected fraud, waste and abuse of public funds. The audit would include examining oversight of the district authorizer, Twin Rivers Unified.

    The employees of Sacramento-based Highlands Community Charter School asserted problems that include falsified student attendance numbers, cronyism and misuse of public funds for luxury gifts for staff and students, staff bonuses, and political contributions. Highlands Community Charter enrolls adult immigrant students for career and technical courses and English language instruction.

    Reports by both LAO-FCMAT and the authorizers’ task force make similar recommendations for effective oversight, such as demanding that nonprofit charter school boards scrutinize third-party contracts for conflicts of interest and annual financial audits. In return for authorizers doing more work, the LAO-FCMAT report would raise their fees to 3% of a charter school’s Local Control Funding Formula revenue.

    The LAO-FCMAT report calls for limiting small school districts’ ability to authorize charter schools with enrollment no larger than the district’s own. It suggests creating a new entity to approve and oversee all-virtual charter schools, which currently must seek multiple distinct authorizers in many counties, complicating coherent oversight. 

    The task force calls for establishing a statewide Office of Inspector General, perhaps under the state Attorney General, to investigate and prosecute financial fraud in school districts, community colleges and charter schools. The office would have the power to issue subpoenas and prosecute.

    Demand more of charter authorizers

    Past attempts to legislate reforms broke down amid contention between school districts and charter schools’ advocates. But David Patterson, a founding member and now president of the California Charter Authorizing Professionals, said he’s optimistic that collaborative work over two years will resolve disagreements.

    He said the bulk of recommendations would not require statutory or regulatory changes and could be adopted immediately. They’d involve creating a fraud risk management program for all charter schools and charter management organizations, as well as district and county authorizers. Elements would include regularly training charter school board members and fleshing out expectations and statutory obligations for authorizers which, Patterson acknowledged, are “outmoded and insufficient.” Even some of the small authorizers “that everyone wants to pick on, deservedly so, probably met minimal requirements” under the state’s 30-year-old charter school law, he said.

    There also would be clear procedures for filing complaints of suspected fraud, including a statewide hotline, Patterson said. Currently, there are no formal channels for reporting suspected fraud. Jeff Rice, founding director of APLUS+, which advances personalized learning models for 91 member charter schools in California, said he called out Inspire for the Disneyland passes, and others complained to authorizers and county offices about illegal enrollment practices, to no avail, he said.

    ‘The San Diego County District Attorney’s Office charged A3’s founders and administrators with defrauding the state by inflating tuition revenue by purchasing children’s personal information from private and public schools and then enrolling them without families’ knowledge. FCMAT suspected Inspire did something similar by manipulating enrollments in a multitrack attendance schedule.

    Eric Premack, executive director of the Charter Schools Development Center in Sacramento, a veteran charter school adviser and advocate, put the blame on auditors and authorizers for not detecting the fraud.

    “Even the smallest authorizer spending 20 minutes in the school could have and should have found this. If it’s a brick-and-mortar school, go visit at least a couple of classrooms,” he said. “And if there’s no students in the classroom and no teaching going on, you know you have a problem. In an independent study program, go in, look at the enrollment list. And then say, ‘I want to see this kid’s work.’”

    Both reports suggest improvements in the auditing process.

    • Charter school audits are not required to extensively examine enrollment and attendance records. The LAO-FCMAT report would require an auditor to flag for the board and authorizer any monthly variation in enrollment or attendance numbers exceeding 5%. 
    • Sampling records and transactions for compliance is critical to detecting discrepancies. The standard practice is for the auditor to choose what should be sampled. But the LAO-FCMAT report said that in recent cases of fraud, the school had provided the sample. The report calls for mandating that the auditors choose. 
    • Charter schools must choose an auditor from a state-sanctioned list. But there’s no requirement that auditors have any expertise in doing school audits. That would change. Auditors on the state list would be required to take regular training in school financing and regulations.

    The anti-fraud task force and LAO-FCMAT reports focused on non-classroom-based charters because that’s where cases of fraud, including A3 and Inspire, have largely been concentrated. Non-classroom-based charters are defined as schools in which less than 80% of instruction occurs in a classroom.

    Contrary to widespread belief, few of them are strictly online schools, as the LAO and FCMAT discovered. About a quarter of the state’s 1,200 charter schools are non-classroom-based, serving 38% of charter school students. Post-COVID, the combination of hybrid schools and home-based schools that spend part of the week in school facilities is a fast-growing sector of schools. Most report they offer no virtual instruction or are primarily classroom‑based.

    Classification as a non-classroom-based charter imposes a set of requirements to qualify for full funding. Class sizes can be no larger than 25 to 1; schools must spend at least 40% of their revenue on certificated teachers and staff and 80% of their budget on instruction.  

    In a recommendation that surprised and pleased most charter advocates, the LAO-FCMAT report recommends narrowing the definition of non-classroom schools to those offering less than 50% instruction in a classroom. Schools would be able to count facilities expenses as part of instruction, and qualify for after-school funding that other schools receive.

    “We question whether a whole bunch of charter schools should have to go through the funding determination process,” said Mike Fine, FCMAT’s CEO. “The name non-classroom-based charter school is a misnomer for many schools that don’t have a virtual component, have a robust facility (operation) and a cost structure that isn’t any different from any other school.”

    In 2019, the Legislature imposed a two-year moratorium on passing new non-classroom-based charter schools, and has twice extended it. The moratorium expires in 2026.

    Fine said the idea behind the LAO-FCMAT report was to air issues and propose solutions in order to avoid another moratorium extension. “Come next year,” he said, “this will provide a foundation for a starting point of a discussion.”





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  • Charter schools should be encouraged to offer flexibility for diverse student needs

    Charter schools should be encouraged to offer flexibility for diverse student needs


    Courtesy: Connecting Waters Charter Schools

    When education policy and funding decisions are enacted into law, it is critical that they be made through the lens of what is best for students. California leads the nation in supporting a wide range of innovative education options that have the potential to accommodate the needs and challenges of a very diverse student population.

    Among the most innovative education models are flex-based, personalized-learning public charter schools, which are mistakenly referred to as nonclassroom-based schools. These 300-plus public charter schools have become recognized as leaders in providing flexible and tailored education for hundreds of thousands of students in California for whom a traditional classroom-only model is not a good match. The term “nonclassroom” is a misnomer as the majority of these schools have classroom facilities where students can learn in-person several days a week.

    There are many reasons why some students do better in a nontraditional education model. Students who were bullied at their previous school, have physical or mental health challenges or have learning disabilities often thrive in a flexible learning environment. Some are foster youth, unhoused, teen parents, or at risk of dropping out of school. Others have simply fallen behind in meeting grade-level standards because they needed a model that better accommodates their individual needs. Others thrive working independently and want to participate in the real-world learning and internships that the schools offer. 

    APLUS+ member schools, comprising about one-third of the flex-based schools in California, serve a diverse student population: 57% of students enrolled are economically disadvantaged and nearly 15% are students with special needs. Many of these students enroll with APLUS+ member schools for academic recovery to get back on track or simply because their life circumstances and challenges are better served through a more flexible and personalized approach to learning. For example, most students who enroll in Learn4Life, an APLUS+ member school, are 17 or older, lack more than 50 credits, and are reading at a fifth grade level. These students graduate from high school, and 41% pursue post-secondary education within two years.

    Flex-based public schools are tuition-free and are open to any student in the state who wants to have an individualized education plan that is tailored for their needs and goals. These schools employ credentialed teachers, abide by student teacher ratios and administer the state’s standardized CAASPP/Smarter Balanced tests. They also administer internal assessments, which showed that in the 2023-24 school year, a high percentage of students who newly enrolled in APLUS+ member schools were significantly below grade level standards in their previous schools.

    Hundreds of thousands of students across the state are thriving at their flex-based schools. Unfortunately, two bad actor organizations operating within this sector have cast a shadow on the charter school sector. As a result of these two bad actor organizations, the California State Legislature recently commissioned the Legislative Analyst Office and the Fiscal Crisis and Management Assistance Team to issue a report with recommendations to improve and streamline the process in which nonclassroom-based charter schools are funded and held accountable.

    The report rightfully acknowledged that the term “nonclassroom-based instruction” is a misnomer, given the diversity of innovative models within the sector and that a significant percentage of these schools operate one or more facilities used for in-person instruction.  

    One of the report’s recommendations was to change the definition of “nonclassroom-based instruction” so that more schools within this segment would qualify for facility subsidies and funding for after-school and expanded learning programs that are currently unavailable to them. While on the surface, reclassification may appear beneficial to students, the opposite is true as it would eliminate the flexibility that accommodates students for whom a classroom-only model is not a good match.

    State education policies should be changed to allow public charter schools with flex-based hybrid programs that operate facilities for instruction to qualify for funding for facilities and after-school programs. Policies should also be changed to allow more students at traditional schools to take part in flexible independent study programs so that they too can benefit from a more tailored and adaptable education program. This change in thinking — and state policy — would allow more students, such as those who have health issues, special needs, or are accelerated learners, to participate in independent study programs.

    Technology and the pandemic have impacted traditional views of teaching and revealed that the future of education must be rooted in flexibility. As the Legislature considers potential reforms in the future, they should prioritize the needs of our diverse student population and allow high-quality schools to offer flexible education models.

    •••

    Jeff Rice is founder/director of the Association of Personalized Learning Schools and Services (APLUS+), a membership association supporting schools that provide a flex-based education.

    The opinions expressed in this commentary represent those of the author. EdSource welcomes commentaries representing diverse points of view. If you would like to submit a commentary, please review our guidelines and contact us.





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  • U.S. Supreme Court Splits 4-4 on Oklahoma Religious Charter School, Meaning No

    U.S. Supreme Court Splits 4-4 on Oklahoma Religious Charter School, Meaning No


    The U.S. Supreme Court split 4-4 on the Oklahoma religious charter school issue. St. Isadore of Seville Catholic School applied for public funding to sponsor an online religious school. The tie decision means that the last decision–which ruled against the proposal–stands.

    Justice Amy Coney Barrett recused herself because of a previous relationship with one of the school’s founders.

    The decision was unsigned, but one of the Court’s conservative Justices voted with the three liberal Justices to produce a tie vote.

    Remember, this is a Court whose conservative Justices claim to be originalists. Their decisions on matters of church and states indicate a flexible, if not hypocritical, application of “originalism.” Over more than two centuries, the U.S. Supreme Court has struggled to maintain separation of church and state. They have found exceptions to Thomas Jefferson’s “wall of separation, allowing public funds for textbooks and state-mandated services, but over the years the courts attempted to avoid the state paying for tuition or teachers’ salaries.

    Yet this Court seems to laying the groundwork for tearing that Wall down completely. In previous decisions, the conservative majority has ruled that failure to fund religious schools was a denial of religious freedom.

    Such a conclusion does not align with Originalism. No matter how hard Justice Clarence Thomas or Justice Sam Alito scours the historical record, they are unable to build a case that the Founding Fathers or the Supreme Court want the public to subsidize the cost of religious or private schools.

    The only thing “original” about their recent decisions requiring states to pay tuition at religious schools in Maine and Montana and capital costs at a religious school in Missouri is their conclusion. They invented a right out of whole cloth.



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  • McMahon Announces Increase in Funding to Federal Charter Schools Program, Despite Multiple Failures

    McMahon Announces Increase in Funding to Federal Charter Schools Program, Despite Multiple Failures


    Secretary of Education Linda McMahon announced an increase of $60 million to the Federal Charter Schools Program, bringing the annual total to $500 million to open new charter schools or expand existing ones.

    This decision ignored research produced by the Network for Public Educatuon, showing that $1 billion had been wasted on grants to charter schools that never opened; that 26% of federally funded charter schools had closed within their first five years; and that 39% had closed by year 10.

    The charter sector has been riddled with waste, fraud, and abuse.

    See the following reports:

    Charter failures

    The Failure of the Federal Charter Schools Program:

    CSP https://networkforpubliceducation.org/stillasleepatthewheel/

    OIG report on CSP https://oig.ed.gov/reports/audit/effectiveness-charter-school-programs-increasing-number-charter-schools



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  • Carol Burris: Why the Charter Lobby Fears the Next Supreme Court Decision

    Carol Burris: Why the Charter Lobby Fears the Next Supreme Court Decision


    Writing in The Progressive, Carol Burris explains why the charter lobby is worried about how the Supreme Court will rule on the case of a religious charter school. They don’t want religious schools to be identified as charter schools. Burris, who is executive director of the Network for Public Education, explains their concern.

    She writes:

    The National Alliance for Public Charter Schools never met a charter school it did not like—until it met St. Isidore of Seville in Oklahoma City. St. Isidore of Seville Catholic Virtual School is the proposed Oklahoma charter school whose fate is currently being consideredby the U.S. Supreme Court, which is expected to issue its decision before summer’s end.

    The Alliance’s objection to St. Isidore being allowed to open what would be the nation’s first religious charter is not because the school would be religious—an argument the Alliance’s CEO Starlee Coleman characterizes as an “ivory tower” question—but because, should the Court rule in favor of the religious charter, the decision could jeopardize charter schools having access to public funding, something all charter schools currently depend on. According to the Alliance, every state with charter school laws mandates that charter schools operate as public schools, and the federal Charter School Program, which finances charter expansion, can only fund public charter schools by law. But St. Isidore argues that it should be allowed to open a religious charter because it is a private organization.

    So to settle the question of whether St. Isidore can open a religious school, the Supreme Court must decide whether charter schools are public actors, like district schools, or private contractors that provide educational services. Those arguing in favor of St. Isidore claim that, at least in the state of Oklahoma, charter schools are not truly public schools, despite the public label assigned to them by the legislature. But a Court ruling in favor of that argument could set a legal precedent going forward that the public status—and therefore the public funding—of charter schools everywhere is in question.

    Oklahoma is one of thirty-four states that require all charter schools to have a private charter school operator—some entity that enters into the agreement to open the school and has a board which governs its operations. Most of these states require the operator to be an incorporated nonprofit, except for Arizona and Delaware, which also permit for-profit charter school governance. In the case of St. Isidore, the nonprofit operator is St. Isidore of Seville Virtual Charter School, Inc.

    However, in five states—Alaska, Kansas, Maryland, Montana, and Virginia—the charter school operator is the public school district in which the school is located and the charter school is part of the public school district. In these states, charter schools exist as they were originally intended—as innovative schools largely free of restrictions so they’re better able to serve a purpose the local public school cannot. Alaska’s charter schools, rated by the pro-charter EdNext as the number one charter state for student performance, include Ayaprun Elitnaurvik, a Yugtun immersion charter school. These schools are part of the school district and their teachers enjoy all the rights and protections of being a public school employee.

    Seven other states—Arkansas, California, Iowa, Louisiana, Texas, Utah, and Wisconsin—allow both district-run and independent charters. School districts govern 75 percent of all Wisconsin charter schools. Twenty-one percent of California charter schools are dependent charter schools, meaning they are part of a public school district.  

    Because district-run charter schools are operated directly by the state without a private operator standing in between, these charter schools are government-run entities and would continue to receive public funding no matter the fate of St. Isidore.

    An advantage of having charter schools run by public school districts is that they are less apt to be plagued by the fraud and mismanagement issues that are regular occurrences in the charter school sector operated by private entities, such asinsider deals, related party transactions, for-profit operations, and outright financial misappropriation. That’s because, unlike with private operators, school operations—such as procurement, employee compensation, and  contracting—are as transparent as in any public school in the district. Teachers are professionally prepared and certified, and can claim the rights and protections of district employees. Parents and voters can voice complaints or concerns to an elected school board that governs all district-run schools, including charter schools.

    And yet any suggestion to have charter schools governed exclusively by public school districts so they can continue to operate transparently and receive federal and state funding seems to be the Alliance’s worst nightmare. According to The 74,should the Supreme Court rule in favor of St. Isidore and prompt states to reevaluate the public/private status of charters, the Alliance fears “school districts could just absorb existing charter schools to keep them public, or at least add more government oversight.”

    It is difficult to understand why profiteering, a lack of transparency, and the ability to commit fraud would be needed for school innovation. The states that operate charter schools publicly have developed stable and innovative schools responsive to the needs of their community. But the charter lobby will likely fight tooth and nail to preserve the status quo.

    The powerful charter chains—with their high-salaried executives, for-profit operator owners, and the real estate empires that have emerged—have enormous sway over charter schools proponents like the Alliance. Within the first five years after the opening of the original charter schools in 1992, four for-profit chains emerged: Leona, Charter Schools U.S.A, National Heritage Academies, and Academica, soon followed by the giant for-profit online charter chains, K12/Stride and Connections Academy. And they, along with corporate nonprofit chains, will work around the clock to protect their interests if the Supreme Court rules in St. Isidore’s favor.

    But there may be hope for those who fight for charter school accountability, transparency, and reform. As we contemplate the possibility of a ruling in favor of St. Isidore, we should think deeply about reforms that will restore charter schools to their original mission as places where educators and parents have the freedom to create new learning models in which public schooling is a reality, not just a label.



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  • Strengthen auditing to curb charter school fraud, a new task force recommends

    Strengthen auditing to curb charter school fraud, a new task force recommends


    San Diego County Attorney Sumner Stephan announces in 2019 the indictment of 11 individuals affiliated with A3 Education, including founders Sean McManus and Jason Schrock, who subsequently took a plea deal.

    Credit: Office of the San Diego County District Attorney

    A court-commissioned task force formed in the aftermath of a massive fraud by an online charter school network issued recommendations Wednesday to thwart the recurrence of similar operations.

    State Controller Malia Cohen, who chaired the task force, said that the 20 recommendations for reforming the system for auditing schools should apply not only to charter schools but also school districts and county offices of education.

    The report urges significant improvement in training, selecting, overseeing and disciplining school auditors as well as an expansion of their responsibilities. 

    “With the education of our children at stake and significant state investments of taxpayer money in education, it is crucial that all schools be held to the highest level of integrity, accountability, fiscal compliance, and transparency,” Cohen wrote in an introduction to the 50-page “Audit Best Practices for Detecting and Curtailing Charter School Fraud.”

    There were multiple failures that allowed the Academics Arts and Action Education (A3) charter network of 19 schools to pilfer tens of millions of dollars in public funding. The multi-agency task force focused on strengthening the auditing process, because a system of detecting and quickly responding to possible fraud relies on effective annual reviews by professional, independent auditors, who are overseen by Cohen’s department.   

    San Diego Superior Court Judge Robert Longstreth signed an order in September 2023 establishing the multi-agency task force after observing how A3 exploited weaknesses in the auditing system. A3 fraudulently enrolled participants in its summer athletic programs into the charter school’s academic program so that it could claim average daily attendance funding, even though the students received no education services. Additionally, private schools and other programs that participated in the enrollment scheme received a portion of the state’s per-student funding while A3 pocketed the rest, according to the report.

    In 2021, Sean McManus and Jason Schrock, A3’s founders, pleaded guilty to a conspiracy to commit theft of public dollars for the phantom enrollments. In return for serving four years on house arrest, the executives agreed to repay $37 million.

    The State Controller’s Office and the San Diego County District Attorney’s Office, which prosecuted A3, led the task force. It also included divergent perspectives from the California Charter Schools Association, the California School Boards Association, and the California County Superintendents.  

    Many of the recommendations will require legislative action and additional funding to implement, as noted in the report in a section titled “Obstacles and Solutions.” While charter school advocates and district authorizers agree in principle that there’s a need for changes, they have disagreed in the past over specifics of added regulation. The report called for collaboration among those with differing perspectives.

    This is the third significant report this year that looked at the multiple breakdowns of oversight responsibility and holes in transparency laws that failed to spot flagrant violations by A3 and now-defunct Inspire Charter Schools, a home-school charter network that could not account for tens of millions of dollars in state funding.  

    The first report was a joint effort of the Legislative Analyst’s Office (LAO) and the Fiscal Crisis Management Assistance Team, a state fiscal oversight agency known as FCMAT. The second was by the anti-fraud task force of the California Charter Authorizing Professionals, a nonprofit association for school districts and county offices of education.

    Both groups made similar recommendations for stronger oversight, including demanding that nonprofit charter school boards scrutinize third-party contracts for conflicts of interest. 

    The authorizers’ task force called for establishing a statewide Office of Inspector General to investigate and prosecute financial fraud in school districts, community colleges and charter schools.

    The LAO-FCMAT report also called for limiting small school districts’ ability to authorize large-scale charter networks. Not only do they lack the knowledge and capacity to monitor complex operations, but the oversight fees they can charge, sometimes reaping millions of dollars yearly, could create an incentive to look the other way. Dehesa School District, with one school in the San Diego County foothills, chartered three A3 and two Inspire charter schools.

    The failure of an audit to catch A3’s “exponential” fluctuations in enrollment was one area that the report said needed fixing.  It recommends tracking enrollment and attendance changes monthly; had this been in place, an auditor may have identified a potential for fraud.

    Other recommendations

    Qualifying, certifying and evaluating accountants: Currently, only 22 certified public accounting firms — less than 0.1% of licensed accounting firms in California — audit 93% of school districts and charter schools, according to the report. As a result, the report stated, “The poor performance of any one CPA firm may significantly impact the quality and reliability of school audits.”  And those auditing schools have not been required to have any training specifically on auditing schools. 

    The report recommends:

    Requiring 24 hours of training on school auditing before an auditor can be listed among certified public accountants eligible for school auditing.

    Requiring the State Comptroller’s Office to do a quality review after an auditor’s first school audit.

    Adding conditions for deleting a poorly performing auditor from the state’s auditor eligibility list.

    Frequent turnover in a charter school’s auditors can be “a red flag” for a subpar auditor or a district with possible misconduct. The report recommends monitoring for these trends.

    Conflicts of interest: Some cases of charter fraud have revealed collusion between vendors with close personal ties to charter leaders, self-dealing by charter CEOs and other conflicts of interest that could lead to fraud or waste. Some boards of directors have failed in their legal responsibility to identify and prohibit them. 

    The report recommends financial disclosure statements for the top five highest-paid school employees, the 25 highest paid vendors, and disclosure statements for charter schools’ contracts with charter management organizations.

    The report reiterates a best practice that some auditors apparently did not follow: To preserve independence, an auditor should never allow a school district or charter school to determine which financial transactions and enrollments should be sampled for an audit.

    Some of the most visible cases of abuse have occurred with non-classroom based charter schools. Those are charter schools in which less than 80% of instruction occurs in person.  

    Consisting of hybrid charter schools and home schools, they comprise about a quarter of the state’s 1,300 charter schools and nearly 40% of charter school students. Exclusively online charter schools are only a small piece.

    Non-classroom-based charter schools are also increasingly popular with parents seeking scheduling flexibility and more options in their children’s education. 

    In 2019, the Legislature imposed a two-year moratorium on approving new non-classroom-based charter schools and has extended it twice.

    Thus, there will be pressure on the Legislature to consider the auditing and oversight reforms that the three reports have suggested before the moratorium ends in 2026.





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  • Lawsuits charge antisemitism, civil rights violations at California charter school and high school district

    Lawsuits charge antisemitism, civil rights violations at California charter school and high school district


    Sequoia Union High School District in Redwood City.

    Credit: Flickr

    The parents of a former student of a San Jose charter school and six families in a wealthy Bay Area high school district have filed separate lawsuits charging “rampant” civil rights violations resulting from bullying, taunting, ostracism and other forms of antisemitic conduct. In the lawsuit brought against the Sequoia Union High School District, the families claim school officials ignored and showed “a deliberate indifference to the problem.”

    Both lawsuits, which were filed in the U.S. District Court of Northern California, say the discrimination escalated following the October 2023 attack on Israeli communities by Hamas and the Israeli retaliation and invasion of Gaza. 

    The lawsuit against the Sequoia Union High School District also reflects tension over how the ongoing conflict in Gaza has been taught in two Sequoia Union high schools as well as other districts engulfed in investigations and litigation. 

    The Office of Civil Rights in the U.S. Department of Education is investigating whether Berkeley Unified failed to respond to rising incidents of antisemitism in its schools. Last month, several Jewish teachers in Los Angeles filed a lawsuit to overturn collective bargaining laws that they said force them to belong to a teachers union that helped create an ethnic studies curriculum that “is patently antisemitic.”

    Next month, an Orange County Superior Court judge will consider two nationally known Jewish legal groups’ motion to void an ethnic studies curriculum in Santa Ana Unified. They claim it was written by teachers and staff members who privately expressed antisemitic remarks and excluded Jewish community members from participating in the curriculum process.

    In their lawsuit, filed Friday, the six Sequoia Union High School District families named Woodside High Principal Karen Van Putten and three administrators of Woodside High, where five of the students attend, as well as Menlo-Atherton High School Principal Karl Losekoot, Sequoia Union Superintendent Crystal Leach, two district administrators, all five district board members, and Gregory Gruszynski, a history teacher at Woodside High.

    Placing the lawsuit in a wider context, lawyers for the Sequoia Union lawsuit said “leftist academics” have spread an ideology that “falsely portrays Jews as oppressors, engaged in ‘exploitive capitalism’ in the West and or ‘colonialism’ in the Middle East.”  

    “The result is not only a reprehensible failure of pedagogy but a hostile learning environment for Jewish students” — including in some Sequoia Union classes where the ideology is taught, the Sequoia lawsuit said.

    It cites as a relevant party but not a defendant the Liberated Ethnics Studies Model Curriculum Consortium, whose member groups are selling curriculum and training teachers in dozens of California districts. 

    Curriculum issues are not directly at issue in the lawsuit against University Prep Academy in San Jose. In that case, student Ella Miller, 13, and her parents filed the lawsuit on Oct. 23 against the charter middle and high school and its executive director. After months of abuse during which students taunted her as “the Jew” or “Jew,” Miller withdrew from the school and now attends a private school, the lawsuit said.

    The lawsuit also named as defendants the Santa Clara County Office of Education, which approved and oversees the charter school, and the California Department of Education, including State Superintendent of Public Instruction Tony Thurmond. The lawsuit claims county and state officials failed to respond to the family’s formal complaint that Ella’s rights had been violated or to intervene after learning of her mistreatment.

    The 55-page filing does imply some teachers were hostile to Israel. Ella’s father, Shai Miller, an Israeli, said he noticed on back-to-school night that Israel was erased from maps of the modern Middle East in Ella’s history class.

    Ella, who identifies as an Israeli American and speaks fluent Hebrew, has spent summers in Israel with cousins, the lawsuit said. The Oct. 7, 2023, attack by Hamas, in which 1,200 Israelis were slaughtered, distressed her and her family. She was visibly upset in history class on Oct. 9, the first day back in school after the attack, the lawsuit states. But before allowing her to go to the bathroom to collect herself, her teacher told her she had to read aloud something he had written “to the effect that, in the past, Palestinians and Jews had gotten along.”

    The lawsuit alleges that “this requirement to publicly espouse a position that was at odds with present-day reality was overwhelmingly oppressive and humiliating. It also further identified Ella as ‘the Jew’ to her classmates.” 

    Did history teacher show bias?

    Allegations of prejudiced classroom instruction that included antisemitic materials are a central element of the lawsuit against Woodside and Menlo-Atherton, two of four high schools in Sequoia Union, a demographically diverse, 10,000-student high school district. 

    Of Woodside High’s 1,646 students, 50% are Hispanic, 42% are white, 4% are Asian and 1% are Black. Only 28% were identified as low-income. Its students include low-income sections of Redwood City, and Woodside and Atherton, which are among the wealthiest ZIP codes in the United States.

    The lawsuit claimed that Gruszynski, a Woodside High history teacher who currently chairs the bargaining committee for the Sequoia District Teachers Association, “singled out and harassed L.K. (all plaintiff students are identified with initials), the only openly Jewish student” in his 10th grade world history class.” Gruszynski displayed a “Free Palestine” bumper sticker on his classroom wall. The lawsuit stated that he “mocked her beliefs, undermined her attempts to provide factual information to classmates, and coerced her into endorsing his biased and ahistorical views to achieve satisfactory grades on exams.”

    On a multiple-choice test, for example, the correct answer to the definition of Hamas, which the United States government has designated a terrorist organization, was a “Palestinian political party which is continuing to fight against Israel.”

    “In this way,” the lawsuit said, “Gruszynski forced a Jewish student to condemn Israel and disavow her beliefs in order to receive a passing grade.” The lawsuit said that L.K. returned home in tears after Gruszynski’s classes and decided she could not participate in any further classroom discussions “without inviting further harassment.”                       

    L.K.’s father, Sam Kasle, filed a complaint against Gruszynski, who refused to meet with him. Kasle requested to see Gruszynski’s course materials, which he, like other parents, had a right to review, but the district rejected that request. In response to the complaint, the vice principal disputed that Gruszynski made L.K. feel “uncomfortable” or “browbeaten,” and considered the case closed without reporting any action taken.

    Student handbook guarantees civil rights

    David Porter, University Prep Academy’s executive director, said the school’s attorney advised him not to comment on the lawsuit because it is an ongoing complaint. However, he did say that as the case proceeds, “what actually happened will come forward.”

    He added, “Our student handbook’s policies around bullying and discrimination are strict, and we follow them as written.”

    The school’s staff and student handbook for 2023-24 was expansive on protecting students’ civil rights, and the lawsuit extensively quotes from it. “The University Preparatory Academy Board and Staff commit to raise our voices against racism, unconscious bias, intolerance, injustice, and discrimination starting by reflecting on our own policies and actions,” it read.

    Another section that the lawsuit cites states that, “To the extent possible, UPA will make reasonable efforts to prevent students from being discriminated against, harassed, intimidated and/or bullied, and will take action to investigate, respond, and address and report on such behaviors in a timely manner.”

    David Rosenberg-Wohl, the family’s attorney, said the anti-discrimination language “is obviously important to the school, and so if the school does not honor it, that’s relevant because it suggests that one group does not count.”

    “Everybody talks the talk,” he said.

    In the days following Hamas’s attack, the discrimination against Ella intensified, the lawsuit said. This was before the Israeli army’s counter-attack and continued occupation, in which Gaza health officials say more than 40,000 Palestinian people, including many women and children, have been killed, and hundreds of thousands of Gazans have been displaced.

    The lawsuit further alleges that two girls, who said they were Palestinian, told Ella, “Jews are terrorists,” and asked her, “Do you know your family in Israel is living on stolen land?” Of dozens of girls who had been friendly to her, only one girl would speak to her.

    Students began to call her “White Ella,” progressing to “White Ella’s family are terrorists;” two boys chased her around the school, yelling, “We want you to die,” the lawsuit said.

    During the three months between Oct. 7, 2023, and Jan. 9, 2024, when Ella withdrew from University Prep Academy, the family had multiple meetings with school administrators, including Porter, the school’s executive director, but felt that the school failed to acknowledge and address the bigotry and harassment she faced. 

    Complaints with no response

    On Jan. 22, Ellla’s mother, Elisa, filed a formal complaint with the Santa Clara County Office of Education, the charter school’s authorizer. By law, the office had until March 24 — 60 days — to respond. On May 6, according to the lawsuit, a spokesperson for the Bay Area Jewish Committee met with May Ann Dewan, then county superintendent, to request that she intervene and answer the complaint. In its answer on May 14, the county said the complaint does not fall within its oversight of University Prep Academy, and the complaint could be filed instead with the California Department of Education.

    Miller did that, and, on June 10, the department notified her that the complaint had been forwarded to Porter, who had until July 13 to respond.

    Since then, the lawsuit said, there has been no response from Porter, the school, the county office, or the state Education Department. “Doing nothing … despite knowing of the anguish of Ella and her family, was deliberate indifference,” it said.

    The family is seeking damages for Ella’s emotional and physical stress, the cost of a private school, and her lost access to educational opportunities.

    Long-standing ‘antisemitic sentiment’

    The lawsuit by the Sequoia Union families also cited “deliberate indifference to anti-Jewish harassment,” which it said started well before the Oct. 7, 2023, Hamas attack. In one incident, according to the lawsuit, a long-term substitute teacher, who continues to teach at Menlo-Atherton High, asked plaintiff W.K. about his background. Told that his family is Jewish, the teacher allegedly shared jokes about the Holocaust with a group of students: “How do you fit 10,000 Jews in a Volkswagen?” she asked. “In the ashtray.”

    After the start of the Israeli-Hamas conflict on Oct 7, however, antisemitic incidents “surged,” the lawsuit said, citing several examples.

    A group of Woodside students yelled, “Go back to where you came from!” to another Jewish student at Woodside High. No disciplinary action followed, the lawsuit said.

    About that same time, a group of Menlo-Atherton students taunted plaintiff W.K. on the way to class, calling him a “kike” and said, “All Jews should die.”

    On Nov. 1, two swastikas were etched into the pavement in Woodside High. (Swastikas had been drawn on bathroom walls in Menlo-Atherton high a year earlier.) Two days later, Woodside High Principal Karen Van Putten emailed the Woodside community that an extensive investigation by school administrators and the San Mateo Sheriff’s Department confirmed that the swastikas were actually “spiritual symbol[s] from Japanese Buddhism known as Manji popularized by anime.” 

    The lawsuit called the investigation a “sham” that, in fact, did not involve the sheriff’s department. Citing administrators’ dismissal of the swastika incident, other derogatory remarks, and the failure of Van Putten and the Sequoia school board to address incidents, Scott and Lori Lyle, parents of a 12th grader at Woodside High, filed a detailed formal complaint.

    With no answer and no action taken in response for more than 200 days, the Jewish families filed their lawsuit, citing violation of Title VI of the Civil Rights Act, the U.S. Constitution’s Fourteenth Amendment’s guarantee of equal protection under the law, the First Amendment’s right to free exercise of religion and freedom of speech, as well as protections under California education laws and the state constitution.

    Filing a lawsuit is a huge step for families, said Lori Lowenthal Marcus, legal director for The Deborah Project. “Students don’t want to embarrass teachers, risk ridicule and humiliation. All of the families went through internal procedures. They tried to speak with principals; they filed complaints to see if they could rectify their situations, but all felt let down. A lawsuit was the next option.”

    The families are seeking the court to order a dozen remedies. They include:

    • prohibiting discrimination and harassment of their children;
    • prohibiting the district from engaging in any antisemitic conduct; 
    • ordering the district to implement a comprehensive policy addressing antisemitism;
    • providing training for all teachers, administrators and staff in strategies to promote empathy and respect for Jewish individuals and their connection to Israel;
    • terminating any teachers found to have engaged in antisemitic discrimination; and
    • creating transparent requirements for disclosing course materials to the public.

    The families also call for appointing a special master to monitor compliance with the court’s orders for three years.

    The Deborah Project, a public interest law firm that defends the civil rights of Jews in educational settings, with pro bono assistance of California attorneys in the global law firm Ropes and Gray, are representing the families. The case is Kasle, et al. v. Van Putten, et al.

    Naomi Hunter, public information officer for Sequoia Union, said the district has not yet been served with the lawsuit. “We support a safe environment for all students, and we are very concerned any time we receive a complaint about a hostile environment, but we cannot respond further until we have more information,” she said.





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  • West Contra Costa Unified denies charter renewal application

    West Contra Costa Unified denies charter renewal application


    Credit: Louis Freedberg / EdSource

    For the first time in five years, the West Contra Costa school district board of trustees has denied a renewal petition of one of its charter schools.

    By a unanimous vote on Wednesday, the board rejected the renewal application of the Richmond Charter Academy, which serves just under 300 students.

    It is part of Amethod Public Schools, or AMPS, a charter management organization that also operates two other charter schools in Richmond and three in Oakland. 

    The vote followed impassioned appeals by staff and students wearing yellow T-shirts, trying to persuade the board to allow the school to continue operating. 

    A similar hearing about the school’s fate was held at a board meeting last month.  There are 13 charter schools in the district, serving close to 4,000 students of the district’s nearly 30,000 students. 

    The charter schools are among more than 1,300 in California, by far the largest number in any state. 

    Renewal petitions are rarely denied in California.  The Legislature approved a law (Assembly Bill 1505) in 2019 governing charter school applications and renewals, but its full implementation was delayed until after the pandemic. As a result, many charters are just now coming up for renewal under the 2019 law. 

    The board’s decision was not entirely unexpected. It was based on a strong recommendation by district staff, outlined in a detailed 79-page report that the district deny the school’s charter based on concerns about its finances and its ability to guarantee that it could offer the educational programs it was promising. 

    The staff reviewers said they “found fiscal concerns that could not be remedied and the school would not likely implement the program as described in the petition.” 

    The denial came despite students showing academic results somewhat higher than the district average. 

    Beyond fiscal worries, several board members also expressed concern about the small number of Black students in the school. 

    The school has a 91% enrollment of Latino students, while Black students only make up 4%.  That’s in a district with an 11.5% Black enrollment.  

    School administrators said the school admitted students based on a lottery, and thus, the racial or ethnic makeup of the school was determined by who applied.

    The school now has a chance to appeal the denial to the county school board, and if the renewal is denied there, the school could then appeal to the State Board of Education. 

    Among the issues identified in the staff report was the very low number of teachers with a “clear” teaching credential. 

    Another concern was the considerable turnover in leadership. Some board members had high praise for the current interim CEO, Adrienne Barnes. But in light of leadership turnover in the past few years, they said they weren’t confident that the current leadership would stay much longer.  

    “Ms. Barnes, you have made a Herculean leap forward, and I appreciate your efforts,” board President Leslie Reckler told her at the meeting. “But I have deep concerns over whether you’re going to be here in a year, or even less than that.” 

    In 2020, the board voted not to renew the application of the Manzanita Elementary charter school, despite a staff recommendation that the application be approved. The school then appealed to the Alameda County Board of Education, which overruled the district board. Manzanita is still operating today.  

    None of the current district board members were on the board in 2020. Reckler and Demetrio Gonzalez-Hoy, the two most senior current members, pointed out that this was the first time they had voted against a charter renewal, and that it was a difficult vote to cast. 

    “As the people in charge of renewing the charter, I simply cannot do that,” Gonzalez-Hoy said. “I am sorry for that because I know how painful this is. And as the first charter that I have to deny, I feel the pain.”

    “The staff’s findings raise serious questions that we cannot ignore, and it would be irresponsible to move forward without addressing them fully,” added board member Guadalupe Enllana in explaining her vote. “My decision is not made lightly, but it’s made with students at the center because that is who we are here to serve.”





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  • North Dakota Becomes 47th State to Authorize Charter Schools Despite Decades of Broken Promises

    North Dakota Becomes 47th State to Authorize Charter Schools Despite Decades of Broken Promises


    North Dakota became the 47th state to authorize charter schools. There are three states that do not have a charter sschool law. Nebraska, South Dakota, and Vermont. Kentucky has a law but its courts declared them unconstitutional.

    When charter schools first began in 1991, they were sold to the public as a miracle cure. Their promoters said they would operate with greater accountability, no bureaucracy, and the freedom to hire and fire at will. Because of this flexibility, charters would produce higher test scores, would cost less, would “save” the failing students, would close if they didn’t get the promised results, and would produce innovations that would help public schools.

    None of these promises came true. The charters are no better than public schools, and many are far worse. The ones that produce higher scores choose their students carefully and avoid the neediest, most difficult students. Charters have produced no innovations. They have a well-funded lobby that fights accountability and seeks more funding. They close at a startling rate: more than one of every four are gone within five years of opening.

    Charters have also been notorious for waste, fraud, and abuse. Scores of charters have been rife with fraud and outright theft. One online charter operator in Ohio collected $1 billion over twenty years, donated generously to elected officials, and when confronted by an audit and demand for repayment, declared bankruptcy. An online charter operator in California stole nearly $100 million. Some operators of brick-and-mortar charter schools have gone to jail for financial fraud.

    The Network for Public Education keeps track of charter frauds. All this information is freely available. Yet North Dakota Governor Kelly Armstrong recited the same broken promises in signing charter legislation. The charters will not produce higher student scores, will push out students they don’t want, and will not produce innovation. In coming sessions of the legislature, their lobbyists will weaken or eliminate the provisions they don’t like. If North Dakota is fortunate, the big charter chains will ignore them because the market is small.

    Edsource reported:

    North Dakota Gov. Kelly Armstrong signed Senate Bill 2241 Monday, allowing public charter schools to operate in the state.

    The legislation takes effect Aug. 1.

    Charter schools are state-funded public schools that have greater flexibility in hiring, curriculum, management and other aspects of their operations. Unlike traditional public schools that are run by school districts with an elected school board and a board-appointed superintendent, most charter schools are run by organizations with self-appointed boards.

    Senate Bill 2241 requires charter schools to operate under a performance agreement with the state Superintendent of Public Instruction, according to a media release from the governor’s office. The schools must meet or exceed state academic and graduation requirements and be open to all North Dakota students.

    “The public charter schools authorized by this bill can drive innovation, improve student outcomes and increase parent satisfaction,” Armstrong said in a statement.



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