After a year of extensive fact-gathering and discussion, a broad-based statewide Anti-Fraud Task Force convened by California Charter Authorizing Professionals (CCAP) has released 20 recommendations to strengthen California’s capacity to prevent, detect, and prosecute financial fraud in public schools. The Task Force report, “Protecting California Public Schools Against Fraud: The Charter School Sector and Beyond,” focuses primarily on public charter schools and their authorizers but also addresses the larger public school and law enforcement systems.
The Task Force convened in response to damaging incidents, most notably the theft of $400 million in state education funds—the largest school fraud in California history—by operators of A3 Education, an online charter school company.
That case and others revealed vulnerabilities in California’s public school financing system that unethical school officials exploited to enrich themselves at the expense of students and taxpayers. These vulnerabilities included lax oversight by authorizers and charter school governing boards, inadequate audits, and a lack of a comprehensive structure to report, investigate, and prosecute fraud in California schools.
Task Force members represent a range of experts and stakeholders, including charter authorizers, representatives of charter school and charter management organizations (CMOs), state officials, auditors, vendors, prosecutors, and attorneys for both charter schools and authorizers. The Task Force identified three overriding weaknesses and developed corresponding recommendations in three areas:
- Preventing and Detecting Fraud
- Getting Help When a Fraud Concern Arises
- System Improvement: Recommendations Beyond Best Practices
While the 20 recommendations represent the overall group consensus, the Task Force members and their organizations may not formally endorse every detail, particularly those requiring legislative action.
“Too often, problem solving efforts get bogged down in charter politics,” said CCAP President and co-founder Dave Patterson. “This diverse group worked very hard to find common ground that would be both effective and feasible, even for small charter schools and small authorizers, which often have less capacity due to their size.”
The Task Force’s work complements that of two other initiatives also arising from the A3 fraud case. The California Legislative Analyst’s Office and the Fiscal Crisis and Management Assistance Team in February 2024 released a “Review of the Funding Determination Process for Nonclassroom-Based Charter Schools,” which also addressed fiscal oversight. A multi-agency task force, ordered by a San Diego Superior Court in the A3 case and led by the California State Controller’s office, is examining charter school audit requirements.
“These efforts are converging to create a real opportunity to strengthen parts of our system that we all know could use some help,” said CCAP Executive Director Tom Hutton. “We look forward to continuing the collaboration as the participants in the public school sector and state policymakers receive and consider these sets of recommendations.”