Audit finds fraud, overspending at charter schools

Marion Higa
Marion Higa

By Tim Sakahara - bio | email

HONOLULU (HawaiiNewsNow) - Ten of the 31 charter schools in the state were audited and among the findings were unethical and illegal activity.

Lack of oversight, unrestrained spending and fraud, those are scary words for parents who entrust their children to local school boards for charter schools instead of the Department of Education.

Myron B. Thompson Academy comes off looking the worst.  The auditor says operations border on fraud, waste and abuse.  One contract was in the amount of $17,000 written out to Vice Principal Dee Yamane's own personal catering company Dee Island's Choice.

"If this administrative differential is for services rendered then why is it being paid to a cookie company?  The more we dug into it the more we found these peculiar payments," said Marion Higa, State Auditor.

The auditor says the school paid four employees more than $133,000 too much.  The part time registrar for example had a base salary of $17,700, but instead was paid $55,200.  And some of the checks were approved by vice principal Yamane after she had retired.

"There were strange ways the money was paid out," said Higa. "There seems to have been an attitude that then allowed them to spend as they darn well pleased."

Kamaile Academy spent more than $18,000 in one year at Wet 'N Wild Water Park, Ice Palace, Chuck E. Cheese and on bicycles as "student incentives" yet the school had low test scores.

"Incentives to do what? Well there were no documents to show what it was for or how it was passed out," said Higa.

In order to get creative flexibility with curriculum charter schools promise to perform as well or better than traditional public schools.  Yet some in the audit scored much worse than public schools.  Higa says Halau Ku Mana presented as if all grades tested well but in reality all but one were well below adequate scores.

"If I was a parent I'd be pretty upset, but how would they know otherwise under the current system," said Higa.

Record keeping was so shoddy another school misrepresented its enrollment and got an extra $160,000 it shouldn't have received.

"It's taxpayer money and these are public schools these are not private schools," said Higa.

The 31 charter schools in the state received nearly $50 million from the state's general fund but the auditor says there need to be a rethinking of the system.

"We may be exempt, and its gray as to what we're exempt from in state law and federal law and that's caused a lot of confusion, but no excuses, we are about high standards," said Lynn Finnegan, Hawaii Public Charter Schools Network.  "There should be no tolerance for fraud. What happens in the legal system or any other kind of situation that may come out of these allegations and the report is going to be something that Myron B. has to take care of."

Charter Schools Administrative Office Executive Director Roger McKeague says he agrees with a lot of the discoveries in the audit and the problems need to fixed.  He also says there is a need to clarify the role of the Charter School Review Panel.

A separate legislative task force is expected to come out with recommendations regarding charter schools soon as well.

To review the Performance Audit of the Hawaii Public Charter School System click here.

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