School Choice & Charters

Calif. Charter Network Misused Millions in Aid, Audit Finds

By Joetta L. Sack — April 19, 2005 2 min read

California’s 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.

“Extraordinary Audit of the California Charter Academy,” April 14, 2005, is available online from California’s Department of Education. ()

The audit chronicles the demise of what was believed to be the nation’s 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’s 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. (“Calif. Charter Failure Affects 10,000 Students,” Sept. 1, 2004.)

State Superintendent of Public Instruction Jack O’Connell said that his office would try to recover at least some of the misspent funds.

“The magnitude of waste of precious education funds outlined in this audit is appalling,” he said in announcing the findings. “We will pursue every legal option to track down the adults involved who funneled money away from students in California.”

Claim Filed

The state education department will file a $23 million claim in bankruptcy court against the CCA’s for-profit management company, the Education Administrative Services Corp., and its founder, C. Steven Cox. The investigation found that the CCA’S 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 “in 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.”

Mr. Cox could not be reached for comment last week. The Victorville, Calif.-based CCA office phones had been disconnected

Mr. O’Connell, the state superintendent, is forming a committee of education department officials and charter school stakeholders to analyze the state’s existing charter school laws and recommend changes.

Related Tags:

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Equity & Diversity Webinar
Culturally Relevant Pedagogy to Advance Educational Equity
Schools are welcoming students back into buildings for full-time in-person instruction in a few short weeks and now is the perfect time to take a hard look at both our practices and systems to build
Content provided by PowerMyLearning
Classroom Technology Webinar Making Big Technology Decisions: Advice for District Leaders, Principals, and Teachers
Educators at all levels make decisions that can have a huge impact on students. That’s especially true when it comes to the use of technology, which was activated like never before to help students learn
Professional Development Webinar Expand Digital Learning by Expanding Teacher Training
This discussion will examine how things have changed and offer guidance on smart, cost-effective ways to expand digital learning efforts and train teachers to maximize the use of new technologies for learning.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

School Choice & Charters Virtual Charters in Hot Water Again. Accusations of Fraud Prompt $150M Lawsuit
Indiana officials seek to recoup more than $150 million they say was either wrongly obtained or misspent by a consortium of virtual schools.
Arika Herron, The Indianapolis Star
2 min read
Indiana's attorney general Todd Rokita speaks at a news conference on Sept. 16, 2020, in Indianapolis. Rokita filed a lawsuit against a group of online charter schools accused of defrauding the state out of millions of dollars Thursday, July 8, 2021.
Indiana's attorney general Todd Rokita speaks at a news conference on Sept. 16, 2020, in Indianapolis.
Darron Cummings/AP
School Choice & Charters How the Pandemic Helped Fuel the Private School Choice Movement
State lawmakers got a new talking point as they pushed to create and expand programs to send students to private schools.
8 min read
Collage showing two boys in classroom during pandemic wearing masks with cropped photo of feet and arrows going in different directions.
Collage by Gina Tomko/EducationWeek (Images: Getty)
School Choice & Charters Opinion Taking Stock After 30 Years of Charter Schools
Rick Hess speaks with Nina Rees, president and CEO of the National Alliance for Public Charter Schools, on charter schools turning 30.
8 min read
Image shows a multi-tailed arrow hitting the bullseye of a target.
DigitalVision Vectors/Getty
School Choice & Charters In Fight Over Millions of Dollars for Charter Schools, a Marijuana Tax May Bring Peace
The Oklahoma State Board of Education voted unanimously to rescind a polarizing lawsuit settlement, pending certain stipulations.
Nuria Martinez-Keel, The Oklahoman
3 min read
Money bills cash funds close up Getty
Getty