Controller Malia M. Cohen Releases the Multi-Agency Charter School Audit Task Force Report and Recommendations

SACRAMENTO - As Chair of the Multi-Agency Charter School Audits Task Force (Task Force), State Controller Cohen released the Task Force's report titled, Audit Best Practices for Detecting and Curtailing Charter School Fraud. The Task Force was convened by court order following the convictions of 11 individuals charged by the San Diego District Attorney with multiple counts of fraud in what turned out to be the largest fraud scheme perpetrated against the State of California in the history of charter schools. San Diego Superior Court Judge Robert C. Longstreth instructed the task force to develop an audit guide for use by auditors in reviewing functions of California charter schools and to develop recommendations for best practices and audit criteria designed to detect and curtail fraud in charter schools.

The Task Force report includes 20 recommendations that are organized into four categories:

1. Certified Public Accountant Authorization, Qualifications, Training, Evaluation, and K-12 Audit Guide Compliance.
2. Certified Public Accountant Rotation and Late Audit Report Notifications.
3. K-12 Audit Guide Procedures.
4. Audit Report Disclosures.

These recommendations reflect best practices to be applied to charter schools and all local education agencies (LEAs), which includes school districts and county offices of education.

"As we go forward, the recommendations will provide a critical road map for ensuring trust, accountability, and transparency in the fiscal and audit functions and operations of our entire K-12 public school system," stated Controller Cohen. "I am eager to partner with Task Force members and education stakeholders to implement these recommendations to encourage sound fiscal management among local educational agencies, including charter schools, so that we can have the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels."

"Controller Cohen didn't hesitate to take action to seal the cracks that were exposed by our successful prosecution of this widespread charter school scam," said San Diego County District Attorney Summer Stephan. "Thanks to the task force, we are ensuring that moving forward, criminals will not be able to perpetrate large-scale scams that previously took advantage of California taxpayers, parents and students. My office has been honored to be a part of that work and I look forward to seeing the positive changes in accountability and auditing that have been put in place."

"I would like to extend my gratitude to California State Controller Malia Cohen, San Diego District Attorney Summer Stephan, and all the members of the Charter School Audits Task Force for their outstanding work on the Task Force Report. Thanks to their dedication, we have developed key recommendations aimed at detecting and preventing fraud in California's charter schools, with a particular focus on improving auditing practices. Moving forward, our goal is to implement these recommendations to enhance fraud prevention and strengthen auditing standards across the local education system," stated Successor Receiver Robert Ayres.

"The recommendations in the Task Force Report make a substantial contribution to strengthening fiscal accountability standards across the charter school sector and the broader public school system. California Charter Authorizing Professionals (CCAP) commend Controller Cohen for her leadership in bringing together a diverse group of experts and building a strong consensus in support of the Report's high-quality recommendations," stated Debi Deal who served on the Task Force and represents the California Charter Authorizing Professionals.

"CCSA would like to commend the State Controller's Office for its leadership and guidance as state agencies and education organizations, including the CCSA, worked collectively to recommend changes intended to strengthen statewide audit standards and future guidelines for charter public schools," said Myrna Castrejón, President and CEO of the California Charter Schools Association (CCSA). "The recommendations are a good starting point and, as highlighted in the report, should also be applied to school districts and county offices of education. CCSA looks forward to engaging in even deeper conversations about the implementation of many of these recommendations to improve the annual school auditing process in a comprehensive way to prevent any financial abuses or to identify and correct them as soon as possible."

As the chief fiscal officer of California, Controller Cohen is responsible for accountability and disbursement of the state's financial resources. The Controller has independent auditing authority over government agencies that spend state funds. She is a member of numerous financing authorities, and fiscal and financial oversight entities including the Franchise Tax Board. She also serves on the boards for the nation's two largest public pension funds. Follow the Controller on X at @CAController and on Facebook at California State Controller's Office.

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