Audit finds missing, misused funds at LA charter network
The Los Angeles Unified school district is investigating a network of eight charter schools for misuse of public school funds.
An audit showed Magnolia Public Schools used classroom cash to help six non-employees with immigration costs. The schools had trouble justifying another $3 million expense.
"These are taxpayer dollars, and we want to make sure they are spent correctly," said José Cole-Gutiérrez, director of L.A. Unified's charter school division.
A June audit, which the district is calling a "forensic review," revealed $2.8 million flowed from schools sites to the network’s management organization in the form of sloppy loans - much of which were never paid back. The management organization was then found to be operating on a $1.7 million deficit, meeting the IRS's definition of insolvent.
Magnolia did not return calls for comment.
Charter schools get taxpayer dollars just like traditional public schools, though opponents complain the financial independence and lax oversight of charters makes it easy to embezzle funds. Charter school supporters point out fewer than two percent of charter schools statewide close for fiscal reasons.
Ken Bramlett, L.A. Unified’s inspector general, said there is evidence some members of Magnolia Public schools had ties to a Turkish group under investigation in other states for questionable use of the U.S. visa program as well as misspending public funds.
According to the New York Times, Gulen followers, named after the Turkish preacher Fethullah Gulen, set-up several charter schools around the country, bringing in staff from Turkey and supporting Turkish vendors with lucrative contracts, from construction to school lunches and uniforms.
For years, the Magnolia’s books and bank account didn't match.
An audit in 2012 based on a sampling of transactions found $43,600 missing from accounts: school records showed double payments made to vendors with duplicate Audit finds missing, misused funds at LA charter network | 89.3 KPCC: