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Report finds lack of proper fraud oversight at charters in state

Craig Clough | March 24, 2015

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Magnolia-Charter-Schools-governanceCalifornia is extremely vulnerable to fraud at charter schools and as a result can expect to lose $100 million in wasted tax money in 2015, a new report released today finds.

The report from the Center for Popular Democracy, Alliance of Californians for Community Empowerment and Public Advocates found that there are “structural oversight weaknesses” in the state’s charter system.

Among the problems it found:

  • Oversight depends heavily on self-reporting by charter schools.
  • General auditing techniques alone do not uncover fraud.
  • Oversight bodies lack adequate staffing to detect and eliminate fraud.

California has the largest number of charter schools in the nation — 1,184, according to the California Charter Schools Association. The number in LA Unified grew this year to 285, 231 of which are independent.

The report recommends a few solutions, including requiring oversight agencies, such as the State Comptroller’s Office and Fiscal Crisis and Management Assistance Team, to conduct audits on charter schools once every three years, and not only when requested to do so.


“There’s no proactive system for auditing California’s charter schools by state officials… They wait until someone has whisteblowers come forward and the media has put something out, but there’s not a regular system for auditing schools,” said Kyle Serrette, director of education at the Center for Popular Democracy, in a call with reporters.

The report stated that over $81 million in fraud has been uncovered at charter schools to date, but that it is likely the “tip of the iceberg” and estimated the state will lose $100 million this year alone to waste, fraud and mismanagement at charters.

“We have a situation where we are losing millions of dollars to fraud in the charter sector every single year. We now know what the problem is,” Serrette said, adding that the backers of the report will be pushing state lawmakers for policy changes based on the findings of the report.

Serrette also said there are other states that do a better job of applying rigorous oversight of charters.

“Pennsylvania is a great example where the auditor general audits all of Pennsylvania’s charter schools every three to five years and the districts, which tend to be the authorizers there, they do the same thing,” Serrette said.

Click here to read the full report.


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