Superintendent of Direction for the California schools, Jack O'Connell, initiated 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 moneyed by the state.

1. Superintendent of Guideline for the California schools, Jack O'Connell, started an audit more than a year back into
the financial issues of the Alternatives for Youth and Opportunities for Learning (OYO) schools. The OYO is a chain
of independent study charter schools within the California schools system, which are independently run however
funded by the state.
The OYO California schools serve trainees who have actually dropped out of the standard high schools. They
presently have about 15,000 trainees in 40 storefront locations throughout the state. These California schools
trainees do most of their work at home, meeting with teachers twice a week. According to state records, student
achievement test and high school exit examination ratings 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 trainees graduated throughout 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 carried out by the Financial Crisis and Management Support Team, who
concluded their analysis and provided their findings in a report that was launched in August 2006. The audit cites
accounting flaws, overpayments by the state, conflicts of interest, nepotism, excessive payment, and mixing private
company concerns with public schools.
The OYO was established and still run by John and Joan Hall, previous instructors from Hollywood High School.
They have actually totally complied with the California schools' audit, but disagreement the majority of the
findings.
Some examples from the audit report are:
• Accounting Flaws and car donation title transfer 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 technique for compensating school personnel for
longer days and year-round schedules. California schools superintendent O'Connell believes instructors must be
counted only as one full-time position each. The auditors disagreed, mentioning that traditional California schools
teachers spend much less time working each year than those at OYO. Nevertheless, the auditors thought the 1.92
amount is pumped up. This example, alone, represent over half of the $57 million overpayment.
Additionally, the report noted numerous questionable expenses. One example of unrestrained costs, provided by
the Times was an $18,000 personnel party held at Disneyland. Allen protected that event as an attempt at
relationship building between employee, who are scattered across the state. He kept in mind that the expenses
was less than $50 per employee.
• Disputes of Interest and Mixing Private Service with Public Schools. Besides the charter schools, the Halls own
and operate a number of personal organisations that offer materials and services to schools. The Times kept in
mind that the Options 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 question.
• Extreme Settlement. The audit also questions the combined salaries for the Halls, which is $600,000 yearly. The
report specifies that it may be excessive for the quantity of time the couple actually 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 cash has actually been spent towards
education therefore far.
The Halls compete that they previously had asked for assistance on their operation from the California schools
often times, however never ever received any response. Hence, they attempted to follow California schools

2. requirements as finest they could with their understanding of the policies. Even O'Connell conceded that none of
the cited practices are prohibited.
The audit suggests the California schools ought to try to recuperate the $57 million in overpayment from the OYO.
O'Connell has actually sent out the report to the state's lawyer general's workplace for evaluation and any needed
action.