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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Nevada County Grand Jury • 2003-2004

To Charter or not to Charter

14 pages
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Note: Missing finding numbers detected: F9

Findings 11 findings

F1
In 1998, the TTUSD granted a K-12 charter to the PCCS. PCCS was a nonprofit public benefit corporation that was organized to operate and manage the charter school.
F2
The initial enrollment was projected to be 125 students. By the end of June 1999, enrollment had grown to approximately 300 students. Based upon the FCMAT report, 2001-02 site based enrollment was 306 and Independent Study enrollment was 962 for a total PCCS enrollment of 1,268. The charter school operated both within and outside the boundaries of the TTUSD in accordance with existing state law.
F3
When revenue and expenditure projection errors of $1.5 million were discovered in the fiscal year 2001-02, the TTUSD and the PCOE became concerned with the PCCS financial viability. During this same period, the charter school became indebted for approximately $4 million.
F4
In April 2002, the Placer County Superintendent of Schools requested FCMAT to review PCCS and the fiscal impact PCCS had on TTUSD, its sponsoring agency.
F5
The charter for PCCS states, "The Advisory Council shall consist of 1 student, 1 parent, 1 teacher, 1 local community representative, and a School District representative." Duties of the Advisory Council include budget review and approval as well as approving budget changes greater than 5% of the total Average Daily Attendance. The TTUSD left its position on the Advisory Council vacant on or before the fall of 2001.
F6
FCMAT determined that PCOE and TTUSD had difficulty interpreting the charter's financial statements because the PCCS reports lacked clarity and accuracy and were not prepared using the same account and code structure as the district. In addition, PCCS did not always file financial reports and interpretations in a timely manner to the TTUSD or the PCOE. PCCS had a pattern of upward spiraling debt in 2001-02.
F7
In April 2003, the Governing Board of TTUSD renewed the PCCS's charter. However, due to the district's concerns in areas in which PCCS had encountered operational difficulties, TTUSD added a list of issues to be addressed. These items included out-of- district students, facilities, growth, liability, student performance, conflict resolution and communications, business services, audits, administrative costs, oversight, and the fiscal viability of PCCS.
F8
Between the charter renewal in April 2003 and the charter revocation in August 2003, numerous meetings and communications took place in an attempt to agree upon a Memorandum of Understanding between PCCS and TTUSD to resolve the identified areas of concern. In August 2003, the TTUSD Governing Board revoked the PCCS charter due to continuing fiscal mismanagement and failure to follow generally accepted accounting principles.
F10
Upon revocation of the PCCS charter, the TTUSD temporarily supported an employee of PCCS to process student records that were requested from receiving districts. Student records were transported from PCCS to TTUSD in November 2003.
F11
No education entity interviewed by the Grand Jury has been able to state that all Nevada County students previously enrolled in the PCCS are meeting California compulsory education laws.
F12
As of February 2004, the TTUSD did not have a board policy or any criteria in place should they be approached to authorize a request for a new charter school. CONCLUSIONS There was lack of agreement between TTUSD and PCCS on the financial information,

Recommendations 3