California Charter Academy

File:Ccalogo.jpg The California Charter Academy (CCA) was formerly the largest charter school operator in California, with multiple campuses scattered throughout the state. CCA opened under the leadership of Mr. C Steven Cox, a former insurance executive. During the charter school's tenure, it ran into many legal confrontations with the California Department of Education (CDE). At one instance, CCA lost a lawsuit to the CDE, which claimed some of the charter schools were illegally converted from private schools.

In 2004, the Superintendent of the California Department of Education, Jack O’Connell, launched an investigative audit into CCA suspecting financial irregularities. Problems shortly became apparent after CCA abruptly halted operations in August of 2004. The closing of CCA caused chaos among chartering school districts, leaving them to deal with student transcripts and landlords who were left with CCA's assets. Students and former employees were equally impacted by the close leaving them without schools and jobless shortly before the beginning of the 2004-05 SY.

On April 14th 2005, MGT of America and the Fiscal Crisis and Management Team released an investigative audit of CCA, detailing school administrator's expenditures, and claiming $23 million in taxpayer money was missapropriated. The charter school's CEO, being agitated by the audit, initiated a seperate audit being conducted by accountants not affiliated with the CDE. This audit is being supervised by Cox's lawyers.

A U.S. Bankruptcy Court judge most recently denied a bankruptcy petition requested by the CDE for CCA's management company, Educational Administrative Services Corporation (EASC), and Cox has recently filed a $120 million dollar lawsuit against the CDE.

The Audit

In April of 2005, MGT of America in conjunction with the Fiscal Crisis and Management Team released an elaborate audit of the business operations of CCA. According to the audit, Mr. Cox and associates missapropriated millions of dollars in taxpayer funds for personal benefit. Jack O' Connell reacted to the audit stating that "The magnitude of waste of precious education funds outlined in the audit [was] appalling". The audit identified several potentially illegal practices including conflict-of-interest violations, converting private schools to public charter schools, and falsifying claims to recieve public funds. Many individuals mentioned in the audit took the offensive claiming the auditors would not accept information which would clear thier names from any wrong doing.

Educational Administrative Services Corporation

Steven Cox founded Educational Administrative Services Corporation (EASC) in March of 2000. This for-profit company was to act as a "liason" between charter schools and government entities. CCA #262, chartered under Snowline-Joint Unified School District, signed a contract with EASC shortly after opening. This immediately created a conflict-of-interest between CCA and EASC, as Mr. Cox was CEO of both entities. After being granted three more charters, one from Snowline (#377) and two from Oro Grande Unified (#297, #387), all four charters were contracted with EASC. The individual rates charged by EASC were later found to be greatly inflated, suggesting that money which could have been used for education was instead used for administrative purposes. In addition to the money accumulated by EASC by charging inflated rates, the CCA audit found that EASC transfered money from CCA bank accounts to EASC bank accounts a total of 37 times totaling an estimated 3.9 million dollars. Out of the 37 transactions, 35 were made illegally in direct violation of Education Code section 47633(c).

External links

• CCA Audit (PDF)
• Victor Valley Daily Press - Cox blames the state for Charter Academy's woes
• Victor Valley Daily Press - Audit Blasts CCA
• California Department of Education official statement about CCA
• CorpWatch article about events at time of CCA's collapse
• AP article at beginning of the investigation into CCA
• SF Chronicle article about criminal charges being sought
• Desert Dispatch article about the release of the Department of Education audit
• Desert Dispatch article about a separate audit being conducted
• Desert Dispatch article about the bankruptcy petition