SIMI VALLEY, Calif.--(BUSINESS WIRE)--The California State Controller’s Office completed an Audit of the 14 separate and independent public charter schools – 11 California Virtual Academies and three Insight Schools of California (together, CAVA). The California Department of Education issued the CAVA schools a letter with certain corrective actions. The CAVA governing boards intend to pursue an administrative appeal in response to CDE’s claim that the school is required to remit common core funds.
After an exhaustive examination the SCO Audit did not find any unresolved issues related to CAVA’s organizational independence from K12 Inc., the online learning provider that contracts with the schools for certain products and services. The CAVA schools, each overseen by a separate and independent nonprofit charter school board, exercise governance and operational control over the schools. The nonprofit CAVA school boards hold the charters, and over 660 individuals – 97 percent of the total staff – are employees of the nonprofit charter school boards. The Head of Schools is also an employee of the nonprofit CAVA schools.
Further, the Audit found no issues regarding enrollment and cohort dropout/graduation outcome data reported to the California Department of Education (CDE), disclosure of third-party relationships and transactions in the school’s independent audit reports, or allocation of shared expenses reported to the CDE.
The Audit made other “observations” which went beyond the scope of the Audit, all of which were fully addressed by the schools. In some cases, the schools disputed the findings and provided clear evidence – including the language in California statute, regulation, and written instructions by CDE – that the schools were compliant.
In response to the observation regarding common core funds, the State Controller’s Office acknowledged that the schools expended the nearly 2 million dollars in common core funds for their intended purpose. The CAVA schools properly spent all common core funds by June 30, 2015. The CAVA schools restated its prior year expenditures appropriately to ensure the correct classification of the expenditures as common core funds. An independent auditor – one of the California Department of Education’s approved list of auditors for schools – states unequivocally that “we determined that the California Virtual Academies have fairly presented, in all material respects, the common core expenditures in the appropriate period…” A second independent auditor concurred. The CAVA governing boards will pursue an administrative appeal of the CDE’s demand for repayment.
In other areas the schools stated they would adopt policies codifying existing practices or add new processes aligned with the Audit’s recommendations. In all cases, the CAVA schools demonstrated they were consistently operating in full compliance with all state laws and regulations applicable to nonclassroom-based independent study charter school programs and would continue to do so in all future operations.