Former Lodi virtual academy fined $2M

A virtual academy that once had a key role in the Lodi Unified School District has been fined close to $2 million by the state for falsifying enrollment figures.

State Superintendent of Public Instruction Tom Torlakson has announced that the California Virtual Academies and three Insight Schools (together CAVA) must remit nearly $2 million to the California Department of Education in improperly used Common Core education funds.

This and several other actions required by the CDE stem directly from an audit conducted by the State Controller’s Office and commissioned by the CDE. The audit covered July 1, 2014, to June 30, 2016.

While no longer affiliated with the organization, Galt Joint Union Elementary School District did use Connections/ K-12 for the 2013-14 school year, according to Superintendent Karen Schauer.

It is unlikely the state’s action will have any effect on the district.

Lodi Unified, too, contracted with K12 and during the 2011-12 school year split the per-pupil funding revenue 50-50 with the company. But the program fizzled and was not continued after two school years; K12 had promised at least 100 students, but there were only a dozen the first year.

In a previous interview, Lodi Unified said K12 coordinated and oversaw student enrollment and because of that arrangement, local officials would not have been aware of any irregularities in student transfers.

CAVA still operates online charter schools in 45 of 58 California counties. These schools are funded by taxpayers and offer an alternative to brick-andmortar schools that allows students to receive assignments, complete lessons, and interact with teachers online or, in some cases, via telephone.

Each school’s charter is authorized by a local educational agency (the authorizing entity) and governed by a separate board of directors. However, the schools operate collectively by sharing teachers, administrators, and some costs. CAVA schools each contract with K12, which provides curriculum, management, accounting, operational, and record-keeping services. To avoid conflicts of interest, CAVA and K12 must be independent organizations.

In its findings and observations, the state audit determined that CAVA was not organizationally independent from K12 because it assigned too much authority to a K12 employee, improperly gave K12 check-writing authority, and devised a fee structure that bound the two entities too closely together. CDE is requiring CAVA to provide documentation showing that it is organizationally independent of K12.

The state department is requiring payment of nearly $2 million from CAVA; a new audit of its average daily attendance (ADA) records; and additional documentation regarding oversight fees, pupil-teacher ratio, progress of students between 19 and 22 years old, memorandums of understanding, and organizational independence.”

In a letter addressed to the head of CAVA, CDE states that CAVA must commission an independent audit to determine the extent of the unsupported ADA it claimed. Based on the state audit results, attendance records were not adequately supported for 12 to 15 percent of the students sampled (40 of 289 students over a two-year period). If those percentages apply to the nearly 13,000 students enrolled by CAVA, it could mean that attendance records may be insufficient for between 1,500 to 1,900 students, according to a press release.

ADA is the most important factor in determining the amount of state funds each school receives.