Magnolia Science Academy is without a doubt a Gulen Managed charter school

The Gulen Movement is fantastic at advertising, PR, and bestwowing fake honors on their students, politicians, local media and academia. The Parents4Magnolia blog is NOT American parents it is members of the Gulen Movement in damage control mode. Magnolia Science Academy, Pacific Technology School and Bay Area Technology is the name of their California schools. They are under several Gulen NGOs: Pacifica Institute, Willow Education, Magnolia Educaiton Foundation, Accord Institute, Bay Area Cultural Connection. Hizmet aka Gulen Movement will shamelessly act like satisifed American parents or students. They will lie, cajole, manipulate, bribe, blackmail, threaten, intimidate to get their way which is to expand the Gulen charter schools. If this doesn't work they play victim and cry "islamophobia". Beware of the Gulen propagandists and Gulen owned media outlets. DISCLAIMER: if you find some videos are disabled this is the work of the Gulen censorship which has filed fake copyright infringement complaints to Utube



Wednesday, September 12, 2012

Magnolia Science Academy- The Audit August 2012

The Magnolia Educational and Research Foundation (MERF) is a non-profit organization founded in 1997 (under the name Dialog Foundation) and was granted a 501(c) (3) tax-exempt status by the Internal Revenue Service in 1998. The first charter school, Magnolia Science Academy was established in 2002. Since then, the MERF has established 12 charter schools (aka Magnolia Public Schools) in the State of California
More excerpts of the audit below:
“audit found that the MSA Schools were not in full compliance with the selected provisions, standards and procedures outlined in their respective Charter Agreements.”

The MSA Schools did not maintain all employment documentation in the employee files as prescribed by the California Education Code and the Charter Agreement

The MSA Schools did not maintain all the enrollment documentation required by the written enrollment procedures and by the provisions of the Charter Agreement

Review of the financial statements and accounting records noted: non-disclosure of related party transactions; failure to maintain required fund reserves; failure to appropriately apply accrual basis of accounting;

The processes and controls over the bank reconciliation were inadequate. We found one Charter School that dated all reconciliations three days prior to this audit

Conclusion: Our audit noted control weaknesses in governance structure, employment documentation and qualifications of staff, admission/enrollment requirements and various financial control issues managed by the Magnolia Public Schools
The conditions described above, along with their underlying causes, may have increased the risk of fraud, waste and abuse of the MSA Charter Schools’ funds that could potentially result from the inability to detect irregularities, improper use of public funds
The Magnolia Educational and Research Foundation (MERF) is a non-profit organization founded in 1997 (under the name Dialog Foundation) and was granted a 501(c) (3) tax-exempt status by the Internal Revenue Service in 1998. The first charter school, Magnolia Science Academy was established in 2002. Since then, the MERF has established 12 charter schools (aka Magnolia Public Schools) in the State of California.
Employment Documentation/Qualifications of Staff
The MSA Schools did not maintain all employment documentation in the employee files as required by the California Education Code and the Charter Agreements.
The California Education Code, Sections 442372 , 47605 (5) (E) and (F)3 and 494064 and the Charter Agreement require that school employees furnish the school with the following documents prior to the first day of work:
· Medical clearance including proof of medical exam and tuberculosis (TB) testing.
· Fingerprinting and the service fee to the Department of Justice for a criminal record check. Applicants will be required to provide a full disclosure statement regarding prior criminal record.
· Documents establishing legal status, and current copies of all teacher certificates.

Per Charter Agreement, the documents listed above should be kept on-site and be ready for LAUSD auditors

The Audited Financial Statements of MSA #1 for FY 2011 clearly showed a substantial balance in the “Other Assets-Loans Receivable-related party” amounting to $322,509. On the contrary, the “Cash and cash equivalents” had a zero balance. Further analysis of the general ledger and the bank statements revealed that on several occasions, the Magnolia Educational and Research Foundation had borrowed an aggregate total of $397,409 from the MSA#1. During the audit, we were provided with the copy of the Loan Agreement dated 06/30/11 issued by the Magnolia Educational and Research Foundation for the remaining balance of the loan. We noted that there was no definite time of repayment and the loan was interest-free.
Considering that the organizational structure of the MSA Schools is relevant information, the audited financial statements should provide the nature of its relationship with the Magnolia Educational and Research Foundation. For the MSA#1, the related party loan transaction was substantial and may have a material impact on its actual financial position. We believe that the information should have been disclosed in the “Notes to Financial Statements” in the interest of full disclosure and in compliance with Generally Accepted Accounting Principles
Fund Reserves
The MSA Schools did not meet the minimum unrestricted reserves required by the California Code of Regulations.
The California Code of Regulations, Section 15450 states, “Available reserves for any of the budget year or two subsequent fiscal years are not less than the following percentages or amounts as applied to total expenditures and other financing uses:
a) the greater of 5% or $55,000 for districts with 0-300 ADA
b) the greater of 4% or $55,000 for districts with 301-1,000 ADA.” 8
Additionally, the Innovation and Charter Schools Division provides that the charter school will at all times maintain a fund balance (reserve) of its expenditures as required by Section 15450, Title 5 of the California Code of Regulations. Currently, the required reserve is 5% of total operational expenditures.9

Cash Receipts and Bank Deposits
The MSA Schools did not adequately monitor the cash receipts and deposits process. Several accounting errors and lack of supporting documentation were noted.
The written accounting policies and procedures manual states, “All funds collected must be deposited intact in a bank account. To minimize the risk of loss or theft, it is recommended that bank deposits be made upon receipt but no later than seven days. Each bank deposit slip must contain the following information: i) the name of the school, ii) the bank account number, iii) the date the deposit slip was completed, iv) the total amount of cash included in the deposit, iv) the total amount of the deposit. Receipts should be adequately safeguarded and properly recorded on a timely basis using the account codes prescribed in the Chart of Accounts… A validated bank deposit receipt should be retained for each bank deposit... As part of the procedure, the Accountant counts the cash receipts and reviews the supporting documentation, Cash Receipts Summary, and deposit slip, then, indicates review on the cash receipts summary


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