Six school districts that profited from one of California’s largest cases of charter school fraud must repay $1 million to the state, a judge ruled Friday.
The school districts — including Dehesa School District in east San Diego County — were paid millions in oversight fees by A3 charter schools, yet the districts failed to hold A3 accountable, said San Diego Superior Court Judge Frederick Link.
The other school districts are Trona Joint Unified in San Bernardino County, Bradley Union in Monterey, Cuyama Joint Unified in Santa Barbara, Acton-Agua Dulce Unified in Los Angeles and Meridian Elementary in Sutter.
“These school districts collected significant fees for oversight work they did not perform,” said San Diego County District Attorney Summer Stephan in a statement.
Charter schools are public schools that operate independently of school districts. By state law, school districts must “authorize” charter schools for them to operate and must provide some oversight for a fee. State law limits how much districts can charge.
In 2019 prosecutors accused A3’s leaders, Sean McManus and Jason Schrock, of creating a network of online charter schools that helped them defraud the state out of millions of dollars from 2016 to 2019.
Prosecutors said A3 leaders bought children’s personal information to falsely enroll them into A3 schools, provided incomplete education services and took tens of millions of dollars for personal use. A3 leaders also manipulated enrollment across their schools and manipulated school attendance reports to get money for time that children were not spending in A3 schools, prosecutors said.
Eleven people in total were indicted in 2019 in connection with the A3 case.
McManus and Schrock pleaded guilty in February to felony conspiracy to commit theft of public funds. As part of the plea agreement the two men agreed to return $210 million in cash to the state, as well as 13 houses and shares in companies.
Prosecutors alleged last month that the six school districts were not doing a good job overseeing the charter schools the districts authorized, and sometimes collected more oversight fees than state law allows.
Dehesa Elementary School District authorized three A3 schools which operated in San Diego County. Prosecutors said the oversight fees Dehesa charged were its single largest source of revenue.
The tiny district operates its own K-8 school serving 137 students with an annual budget of about $3.5 million.
Under the ruling, Dehesa School District will repay the state $68,500 in five annual payments of $13,700, starting in the 2022-2023 school year, said Barbara Median, a spokeswoman with the San Diego County District Attorney’s Office.
In addition to the settlement, Link’s ruling provided clarity about how school districts should collect oversight fees.
Link said that state law limits school districts’ oversight fees to equal the lesser of the costs of providing oversight or 1 percent of the charter schools’ annual revenue — or 3 percent if the district provides rent-free facilities to the charter school.
“While the recovery of stolen funds is certainly important, the clarification of California’s oversight fee law by Judge Link brings much needed change for our public education system and will serve to improve oversight and integrity for years to come,” Stephan said.
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Judge orders CA school districts to pay back oversight fees totaling $1 million - The San Diego Union-Tribune
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