Another scoop by KPCC’s Annie Gilbertson. The California State Auditor is investigating four of the state’s 11 Magnolia Science Academies, part of the Gulen charter chain.
“After sampling transactions from Magnolia campuses in 2012, L.A. Unified found over $43,000 in duplicate payments to vendors, flagging those as potential misuse of funds.
“The Los Angeles Unified school board ordered a second audit in 2014, voting to close two of the schools if any fiscal problems arose.
“The audit, which the district is calling a “forensic review,” revealed that schools sent $2.8 million to the network’s management organization. The funds were poorly documented loans, and much of the cash was never paid back to classrooms, according to L.A. Unified.
“District auditors found the management organization met the definition of insolvent, operating on a $1.7 million deficit.
“Magnolia refutes much of the findings.”
Diane Ravitch's blog 
This reminds me of those email scams describing a friend or relative in a foreign country in sudden need of money due to some misfortune. The similarity here is the misfortune, as in “missed fortune” the municipal school systems naively suffer. Like the email scams, these operators only have to operate systems in a few cities – for a short time – to make huge sums of money. When someone begins to get suspicious or actually begins to gather evidence that there is something “phishy” going on, they can simply pack up and disappear only to reappear elsewhere.
The real question here is why LAUSD did not bring back the results of the 2012 audit to the school board as requested. Audits of this nature are not the norm. The Inspector General does not take on audits unless there is evidence that suggests questionable actions on the part of a charter. The findings in the 2012 audit were certainly problematic, put the charter office did not present these findings to the board of education. Now we find out that a “deal” was somehow made that the three Magnolia Schools, 1, 2 and 3, agreed to make the recommended changes. Since all the LAUSD Magnolia schools are managed by the same group, MPS(Magnolia Public Schools), you would think that the charter office would request immediate audits of their other schools. That was never done.
Now, LAUSD has a mess on their hands. They gave MPS a pass two years ago, and now, with the latest audit, more egregious actions have been uncovered.
Even worse, there is no question that, if Magnolia Science Academies 6 and 7 are ultimately revoked by LAUSD, you can be assured that MPS will request authorization by the county and then the state if necessary. As demonstrated by past history, the state charter advisory entity(ACCS), the Advisory Commission for Charter Schools, will ignore the local and county BoEs and CA Dept. of Ed’s Charter Office. When a charter gets recommended for approval by the ACCS, the CA State Board of Education can be counted on to rubber stamp their decision. It worked this year when another MPS school, Pacific Tech in Santa Ana, was approved even though Tom Torlakson, CA’s Superintendent of Public Instruction, had issued a report stating that this school had received a poor rating as to fiscal viability. Now, with state approval, Pacific Tech is in the process of building a new facility using millions of state construction bond funds.
Local reporters need to delve deeper into the lack of oversight of charters, when schools like Magnolia Science Academies can be allowed to operate for years and years with seeming impunity, both at the local and state levels.
By the way, the ACCS is heavily weighted with charter supporters. Surprised?????
A while back it was revealed here in Los Angeles county that there was issues with all the vendors dealing with their schools, part of their “good ole boys club” they are part of some creepy cult, not even born in the USA. We heard many of the teachers also had outside companies that billed the school for services like janitorial, uniform supplies, and more.
Agreed that the LAUSD overlooked a lot, and gave them many opportunities to straighten up their act. By overlooking it the debt and money grabbing increased, there is some sort of double billing involved with services. They had another firm called accord that the judge ordered them to dissolve their business with (that sounds suspicious)
I must admit, the way the LAUSD closed those schools put the parents in a tailspin. Had the LAUSD put a transition staff in place for their children the judge probably would have agreed to the closure. Just a letter was not cool. The families weren’t informed, the board didn’t do a final vote, and then plans for the students. IMO LAUSD panicked because they were financially bleeding so they abruptly tried to put a band aid on the situation.
Now this will cost the taxpayers $300K+ and in the meantime they swindled another $6 million out of California.
Educator–the same mess is going on w/the Gulen schools all over the U.S.–Ohio, ILL-Annoy, etc. Don’t know about the other states, but legislators in ILL-Annoy have been wined, dined, given at least one free trip to Turkey, & were made honorary some-thing-or-others by Gulen’s Niagara Foundation. Plus the FBI has gone in to at least one of the ILL-Annoy Concept (that’s what they’re called here–isn’t the variety of names from state-to-state interesting?) schools. The solution? Simple–close ’em ALL down. Also–for more info–read the great blog “t.b.furman”
Horrendous mess–I can’t imagine whose sending their kids to such schools.