Will Huntsberry of the Voice of San Diego has covered the scandals blighting California’s Charter Industry, especially the A3 online scandal, the largest in American history.

In this article, he goes straight to the heart of the scandals: the flawed audit process.

California lawmakers created a system that places just one process at the forefront of detecting fraud and mismanagement in the state’s schools: a yearly audit, conducted by a “state-approved,” “independent” auditor, according to the Department of Education.

But these auditors are not independent, in so much as they are hired and fired at will by the schools they are auditing. The term state-approved is also something of a misnomer. To qualify as an approved firm, the State Controller’s Office must only verify that the potential auditors are accountants in good standing with the California Board of Accountancy.

No special training or vetting required.

The audits themselves are also not designed to dig deeply into a school’s finances, according to transcripts from a grand jury proceeding into an alleged $80 million charter scam obtained by Voice of San Diego.

A3 Education operated 19 online charter schools around the state. The schools enrolled thousands of students, some real and some fake, prosecutors say. Two men at the top of the alleged scheme funneled $80 million out of the public education system and into companies they controlled, prosecutors say.

Even though few other people ever existed on the companies’ payrolls besides the owners, auditors following standard procedures missed that part of the alleged scam, as well as others, according to the grand jury transcripts.

“They’re not designed to catch fraud at all,” Michael Fine, who runs a state fiscal watchdog agency called the Fiscal Crisis Management and Assistance Team, told Voice of San Diego. “To have a certain confidence level in the numbers, they do some testing of transactions. But that testing is fairly limited.”

Fine said there’s another critical element that could limit the auditors’ effectiveness: They rely on what school management teams show them, rather than getting much behind the numbers.

That makes no sense. Ask the folks in charge of a massive scam to show you the numbers they choose to show.

California and charter fraud are becoming synonymous.