Gulen Movement is the catalyst for the charter schools
and the charter schools are the BUSINESS catalyst for Gulen Movement
An attorney and an accountant for Magnolia admitted there had been bookkeeping errors but argued most of the discrepancies could have been cleared up if Los Angeles Unified school district officials had given them an opportunity to respond.
“We don’t want to get into a big fight with the organization that funds us. We want to get back into a dialogue so we can clear up some of these things,” said Kim Joseph Onisko, a certified public accountant representing Magnolia. “There’s no reason organizations with these type of academic results should be put out of business for bookkeeping boo boos.”
The school board voted in March 2014 to conditionally approve two Magnolia schools – Magnolia Science Academy 6 in Palms and Magnolia Science Academy 7 in Northridge.
On June 27, district staff sent a letter to Magnolia stating the charters for the two schools had not been renewed. The letter cited the findings of a forensic investigation by Vicente, Lloyd & Stutzman, although the full report was not released until last month.
Los Angeles Superior Court Judge Luis Lavin granted an injunction in July, allowing the schools to remain open. Lavin said the non-renewal decision should have been made at a public meeting.
The investigation summary focused on funds passed between schools and to the Magnolia Educational and Research Foundation, the charter operator. The summary also questioned the organization’s solvency due to “deficit spending.”
Onisko denied the schools were ever financially insolvent. Magnolia Public Schools has $9 million in net assets, he said, and none of the schools had deficits as of June 30, 2014.
“A lot of the financial issues in dispute between the parties relate to a question of whether Magnolia Public Schools should be treated as one single entity or whether it should be treated as 11 separate public schools and a separate charter organization,” said attorney Jerry Simmons.
Magnolia views the transfer of funds between schools the same as moving money from one department to another. Simmons said this is consistent with how other charter management organizations and other school districts operates. Simmons said they file one tax return and operate as a single entity for all other purposes.
The report also showed the school spent more than $200,000 for immigration fees over five years. The report stated the school paid for six non-employees, although Magnolia says it was only three.
Under federal law, the school is required to pay visa expenses for potential employees, so the immigration expenses for non-employees were for potential teachers who were denied visas. Magnolia has 20 foreign teachers.
The forensic review also raised questions about a field trip taken by students at two Magnolia schools. The school purchased the airline tickets and booked the hotels to save through collective purchasing, but all expenses were paid by student fundraising, according to Magnolia.
School officials also defended their relationship with the Accord Institute for Education Research which provides a variety of services, including curriculum development and professional training. Magnolia has paid approximately $3 million to the vendor. The auditors said the fee was 30 percent of the schools’ budget, although Magnolia states it is only 4 percent of the overall budget.
The schools have also faced accusations that they use their vendor agreements to pay for services they did not receive in order to support the controversial Gülen movement led by a Turkish Islamic scholar.
“Individual employees are free to do what they want on their own time, but as an organization, we have no association with any religious sect or movement and they have never received any funds from the school,” Magnolia stated.
Simmons and Onisko claim LAUSD did not follow state law when it conditionally renewed Magnolia’s charters. The Charter Schools Act only allows the board to vote for or against renewal, Simmons said. He argues the board should have renewed the charters and then started revocation procedures if new evidence was discovered.
Simmons said the revocation procedure would have allowed them an opportunity to respond at public hearings. Onisko said it is also unusual for an organization being audited to not have an opportunity to respond to the findings.
“It’s troubling if it’s true they relied on the report that wasn’t even issued until September to make a decision in June,” he said.
Although the school board voted in August to support the decision not to renew the charters, the Los Angeles County Office of Education stated the charters will remain renewed as long as the injunction remains in place. At this point, the district has not expressed any plans to ask the judge to drop the injunction. School board member Tamar Galtzan declined to comment due to the pending court action.
Magnolia now faces more investigations. LAUSD has expanded its probe to include all nine of Magnolia’s LA County schools, including Lake Balboa and Reseda. The state is also conducting an audit which is expected to take six months.