A court-ordered statewide task force charged with studying reforms to prevent future cases of charter school fraud will convene for the first time in San Diego on Monday afternoon.
The meeting will be closed to the public and the media and will be held at San Diego Unified’s Logan Memorial Educational Campus.
The task force was ordered by San Diego Superior Court Judge Robert Longstreth in September as part of the yearslong A3 charter school case, which is the largest case of charter school fraud prosecuted in California in recent years.
Two charter school operators, Sean McManus and Jason Schrock, along with nine other co-defendants, were indicted in 2019 by local prosecutors who accused them of running a statewide charter school scheme that bilked the state out of more than $400 million in public school funds. The two men built a network of non-classroom based charter schools, through which they improperly obtained state school dollars by fake-enrolling students who were not actually attending A3 schools and manipulating the attendance numbers used to calculate their schools’ funding, prosecutors said. The two also took tens of millions of public school dollars for their own personal use.
In 2021, McManus and Schrock took a plea deal in which they agreed to return all the assets they stole through their A3 network and cooperate with the case. Together they were ordered to pay $37.5 million in fines and restitution.
The new task force will focus on improving the annual school auditing process that California charter schools, like school districts, are required to undergo, according to the court order. The task force will also study the role of the agencies that are supposed to hold charter schools accountable — the school districts and county education offices that authorize charters.
San Diego prosecutors said the A3 case raised issues with the school auditing process, including the fact that schools are allowed to hire their own auditors — in A3’s case, charter school leaders fired an auditor who had raised concerns about A3’s financial practices then selected a new one who found A3’s operations to be compliant. The state law provision that requires annual audits for districts and charter schools also does not include any training requirements for auditors.
Attempts to reform state law to prevent another case like A3 have been unsuccessful. Legislation that would have required training for school audits, and that would have established several other reforms meant to prevent another case like A3, died in the past two years amid heavy opposition from charter schools and their supporters, who denounced the legislation as being “anti-charter.”
The task force will devise criteria for the annual audits that California charter schools, like school districts, are required to undergo, the state controller’s office said. The task force also will decide best practices to prevent future charter school fraud.
“There were ongoing concerns that some of the underlying problems in discovering the depth and breadth of the theft of California state resources in the case (were) due to the inadequacy of the audit services performed by the online charter schools’ auditors,” state Controller Malia Cohen said in a statement in September when the task force was first announced. “This new task force will work to set clear audit guidelines on such matters in the state moving forward, thereby using this most recent example of oversight failure to ensure stronger future protections.”
Cohen said she will lead the task force along with the A3 case’s successor receiver, William Robert Ayres, who had submitted the request to Judge Longstreth to create the task force. The group will 18 members, according to the court order; the members currently include San Diego County Deputy District Attorney Leon Schorr, who led prosecution of the A3 case, District Attorney Summer Stephan, and some San Diego Unified School Board trustees.
The task force must complete a report with findings and recommendations within one year of its first meeting, according to the court order.
