When the LAUSD approves a charter, they accept the responsibility (and a fee from the state) for holding the charter accountable to both the charter and the California education code. By placing a former California Charter School Association staffer as the head of the LAUSD Charter School Division (CSD), the Board of Education has signaled their lack of interest in providing this oversight. It is, therefore, not surprising that complaints to the CSD by parents seem to be routinely ignored. However, given the possible financial liability to the District, if this lack of interest was misinterpreted as complicity, one would assume that both the CSD and the School Board would make sure major allegations would not be ignored. A possible example of impropriety would be removing $600,000 from an account held in trust for the student body without permission of the Associated Student Body (ASB) representatives or approval by the charter’s Governing Board.
Unfortunately, this is not a hypothetical example. Granada Hills Charter High School (GHCHS) has made at least five different withdrawals from their students’ ASB account, including one for $600,000 on June 28, 2012. On April 18, 2016, Alex Gomez, the CSD specialist assigned to GHCHS, was notified by email of this and three other withdrawals that occurred in 2012. The CSD’s Administrative Coordinator, Dr. Robert Perry, responds to this email was that he was “turning this over to our fiscal team for review”. No further reply was received.
After finding another $600,000 withdrawal listed in the GHCHS bank records from December 2015, a second email was sent to the CSD on July 24, 2016, pointing out the lack of response and detailing the new information. The concerns raised by the information contained in the bank records were also reiterated, including the fact that almost $1 million was being held in this account. These funds are meant to be “raised and spent by student organizations” with the students making “decisions about how they will spend this money”, not an ever increasing pot of money that the school can use as a piggy bank. Contrary to the laws, the funds were being kept in an account that appeared to be not fully insured.
On July 26, 2016, I received a reply from Amy Long, the Fiscal Oversight Administrator at the CSD, stating that she had thought that GHCHS had responded directly back to me. This was a strange assumption considering that the CSD is in charge of oversight, not I. She also forwarded me the following responses from the charter:
1) “GHCHS staff searched for responsive documents, but could not locate the minutes or the agendas from the requested time period. Prior practice had been to delete these materials after the subsequent school year, so 2011-2012 ASB agendas and minutes would have been deleted in 2013-2014. While there does not appear to be a records retention requirement for ASB agenda and minutes, GHCHS will be implementing new policies and procedures whereby ASB agendas and minutes will be retained for four years.”
2) “As the end of June 2012 approached, there was not sufficient cash in the payroll account to cover the June 30 payroll. Following is the breakout of the cash balances after the transfer of funds from the ASB account to the CCU payroll account:
LACOE - (526,530)
CCU Payroll - 1,442,623
EWB - 402,284
QSCB ACCOUNTS - 6,911,963
ASB - 204,671
INVESTMENTS - 684,065
The balance in the CCU account as of 6/30 reflects that the funds were committed to and available for payroll, but the payment of the payroll was not actually posted in the ledger and the bank account until early July.
The transactions were approved retroactively by the 2012-2013 ASB Council in the fall of 2012 following the start of the new school year and the installation of the new ASB Council. The 2011-2012 ASB Council was unable to approve of the transfers since the school year was over and the 2011-2012 ASB Council had completed its service. As the funds are under the control of the ASB, the transfer was not taken to the Governing Board for approval.”
Ms. Long acknowledged that “the information above may not have addressed all of [my] questions” (emphasis mine), which was an understatement. The charter did not explain why interest was not paid on these loans or why the balance of the ASB was so high. The CSD did not indicate if they knew about these transactions when they recommended the charter renewal, why it was permissible for the charter to enter into a loan agreement without the approval of its Governing Board, why a loan was allowed to be “retroactively” approved by the ASB Council or if loans from an ASB are legal.
Immediately after receiving the inadequate response from the CSD, I sent the following e-mail to the LAUSD School Board:
Dear LAUSD Board Members:
At what point will you demand that the Charter School Division (CSD) start holding charters responsible for their actions?
While Granada Hills Charter High School (GHCHS) recognizes that that the Associated Student Body (ASB) funds are supposed to be "under the control of the ASB", they also admit that they removed $600,000 without a vote of the ASB, and that "the transactions were approved retroactively by the 2012-2013 ASB Council in the fall of 2012". Since the ASB funds are separate than those controlled by the charter, this was a loan. However, no interest was paid and "the transfer was not taken to the Governing Board for approval."
While this incident was the only one responded to, I have found four other incidences where money was transferred out of the ASB Account by GHCHS:
Jan 4, 2012 Emergency transfer - LACOE ACH 310,000.00-
Jul 13, 2012 Emergency Transfer 100,000.00-
Aug 07, 2012 Emergency Transfer 25,000.00-
Dec 1, 2015Transfer to CK 0635 600,000-
It is not enough that the CSD "posed questions to Granada", they need to demand complete answers and take appropriate action. In other words, they need to provide oversight.
I would also like to remind you that GHCHS is currently operating with a governing structure that is different from the one outlined in the charter that you approved. The CSD knowingly allowed them to make this material revision without approval from the LAUSD Board as is required by the California Ed Code. Furthermore, District has yet to appoint a member to the GHCHS Governing Board as is allowed by law.
The responsibility of the LAUSD Board does not end when you vote to approve a charter or charter renewal. You have a responsibility to ensure that the charter is meeting the terms outlined in its application and it is in compliance with the law. If the CSD is unwilling or incapable of helping you meet this requirement, you need to replace them with a staff that is more up to the task.
Sincerely,
Carl Petersen
As of today, not one of the seven Board members has responded to my email. I also copied members of the press, but they too have not been interested. When no one is willing to hold charters accountable, is it any wonder that conditions were ripe for “financial shenanigans” at El Camino Real Charter High School? Ms. Long stated that GHCHS was expected “to respond by the week of August 15th”, but no response was received. With the LAUSD Board and the press showing no interest in possible fraud, does anyone expect that a full response will ever be received?