School districts will have a wider degree of latitude in denying the petitions for charter schools if a pending Assembly bill is passed.
San Bernardino County school districts, in particular, have over the last several years fallen prey to charter school operations that were more focused on enriching their operators than educating students.
The California Education Code provides for the formation of charter schools under the aegis of a sponsoring local school district. Charter schools function outside the normal parameters of normal schools and can offer a curriculum and educational smorgasbord unavailable in traditional public schools while meeting the requirements of both special needs students and accelerated scholars. But the lack of strict oversight of charter schools has been abused in the past, leading to the squandering of hundreds of millions of dollars in educational funds, losses and liability to the sponsoring districts, and students who suffer as a consequence of educational neglect.
One of the most celebrated failures in the state’s charter school system took place in San Bernardino County in the early 2000s with the California Charter Academy debacle. The California Charter Academy, which was founded in 2000 by Charles Steven Cox, a former insurance executive, in short order grew into the largest charter school operator in California, with multiple campuses located throughout the state.
Cox chartered the first academy under the auspices of the Snowline-Joint Unified School District, which exists in the High Desert communities of Phelan and Pinon Hills. He then utilized the enthusiasm garnered from that formation to get Snowline to charter a second academy. In so doing, Cox made large donations to Bill Postmus, a board member with the Snowline School District who was then running for San Bernardino County First District supervisor. Cox also made Postmus a board member with California Charter Academy and provided his father, also named Bill Postmus, with a position as a teacher at one of the charter schools, instructing “leadership.” Cox then obtained two more charter sponsorships, one from the Orange School District in Orange County, and one from the Oro Grande School District, located in San Bernardino County’s High Desert.
Simultaneous to his founding of the non-profit California Charter Academy, Cox created Educational Administrative Services Corporation (EASC), a for-profit company which was then hired by all four charter schools to manage the day-to-day operations of the charter schools and provide academic supplies such as books, paper, pens, pencils, desks, chairs, projectors, computers, etc. The rates charged by EASC reflected in the billings were inflated. In some cases, educational materials that were paid for by the charter schools were never delivered.
Cox hired one of Postmus’ political associates, Tad Honeycutt, who later successfully ran for a position on the Hesperia City Council, to work with the California Charter Academy. In turn, Honeycutt created his own set of companies, Maniaque Enterprises and Everything For Schools, which like EASC delivered educational materials and services to the non-profit charter schools at a profit.
By 2003, teachers at several of the schools were going public with accounts of how students’ educations were being neglected and books and other educational materials were not being provided. In 2004, the superintendent of the California Department of Education, Jack O’Connell, launched an investigative audit into California Charter Academy, alleging financial irregularities. In August 2004, four years after California Charter Academy’s creation, it ceased operations abruptly, throwing teachers out of work and forcing students to hurriedly matriculate back into public schools, which were overburdened by the influx of unexpected numbers of students. The California Charter Academy’s records and books were in utter chaos. Student transcripts requested by the sponsoring districts were found to be incomplete or entirely unavailable. The California Charter Academy’s creditors and landlords in many cases made off with the academy’s assets.
On April 14, 2005, MGT of America, an auditing firm hired by the California Department of Education, and the state’s Fiscal Crisis and Management Team released their joint financial audit of California Charter Academy, showing $23 million in taxpayer money paid to the private management company Educational Administrative Services Corporation was misappropriated. Among the findings were that Cox had hired several of his family members into what were essentially do-nothing clerical and non-productive administrative positions, that Cox, his family members, other EASC and Charter Academy employees, and Honeycutt were provided with luxury automobiles, and that among the expenses accumulated by the Charter Academy were accommodations in Las Vegas, at Disneyland and the Disneyland Hotel, studio musical recording equipment, spa visits, fishing trips and jet skis.
The audit alleged multiple conflict-of-interest violations, the improper conversion of private schools to public charter schools, and the falsification of documents and claims to receive public funds
“The magnitude of waste of precious education funds outlined in the audit was appalling,” said O’Connell.
In late July 2007, public officials, including Bill Postmus, Postmus’ chief of staff and successor as supervisor Brad Mitzelfelt, Tad Honeycutt, Victorville councilwoman and charter school advocate JoAnn Almond and Hesperia School District board member Eric Swanson, who was one of Honeycutt and Postmus’ political associates and whose company had billed EASC/California Charter Academy for over $450,000 in computer equipment that could not be located, were subpoenaed as witnesses to speak on the matter before a special grand jury convened by the San Bernardino County district attorney’s office.
On September 4, 2007, Honeycutt and Cox were arrested after being indicted by a special grand jury for their alleged roles in the collapse of the California Charter Academy. Cox and Honeycutt were indicted on a total of 147 counts, including fraud, misappropriation of public funds and grand theft. Cox’s bail was set at $1 million dollars, while Honeycutt’s was logged at $500,000. Both were able to post bail. Law enforcement officials froze their assets, but little of the missing money that officials thought might be recovered was present in their accounts in local banking institutions. It is known that Honeycutt had made multiple trips to Vanuatu, Spain and Argentina in the early and mid-2000s. The criminal cases pending against Cox and Honeycutt have not yet gone to trial.
Some of the taxpayer money provided to the California Charter Academy was used to fund lawsuits brought by Cox and EASC against public entities. In one case, Cox and EASC filed suit against the California Department of Education, contending the state had illegally withheld funding from the California Charter Academy. Cox and EASC did not prevail in that suit. Cox brought another lawsuit alleging impropriety and political motivation on the part of public officials whose actions led to the closure of the California Charter Academy.
Another San Bernardino County-based charter school, the Public Safety Academy, fell short of both educational and accounting goals over the several years of its operation, then plunged into chaos last year, resulting in lawsuits that now may end up costing its sponsoring district hundreds of thousands or perhaps even millions of dollars.
What was to become the Public Safety Academy was founded as an unaccredited educational seminar in 2000 by Michael Dickinson, a one-time arson investigator, to prepare its attendees for careers in law enforcement and firefighting. In 2005, the school was given accreditation when Dickinson convinced the San Bernardino City Unified School District (SBCUSD) to charter the school as the Public Safety Academy. The academy appeared to have found a niche, with students intent on pursuing a career in fire science or law enforcement, as well as parents wishing to steer their children in that direction.  A number of local luminaries in those fields participated in the school as instructors, sponsors, mentors, and board members.
But the academy encountered difficulties along the way. Four years ago a financial review revealed the school had not kept accurate payroll and accounting records, and had spent $164,000 that was not budgeted for. There were also questions about $20,000 worth of expenditures for laptops that were either never delivered, misappropriated or stolen.  In January of this year, a report commissioned by the district found the academy’s accounting practices deficient and cataloged arrearages with regard to accounts payable.
Last spring, Michael Dickinson’s wife who served as a principal at one of the school’s campuses, Susan Dickinson, fell under the charter school board’s focus after a report surfaced that she had crossed the line in prepping her students for questions contained in the state’s Standardized Testing and Reporting exam. According to an inquiry into the matter, Susan Dickinson reviewed some of the material contained in the test with students at her school before the test was administered and recommended that other instructors at the academy do likewise.
The charter school’s head principal, Kathy Toy, had recommended that the board of trustees terminate Susan Dickinson. Before that vote took place, Michael Dickinson sacked the board of trustees.
On June 20, 2011 the Public Safety Academy board filed suit against Public Safety Academy Inc., an adjunct to the academy which was set up and controlled by Michael Dickinson, who received $121,000 per year in salary for his services. That suit sought to restore the authority of the board that Michael Dickinson had terminated. In July, the court ruled that the board had legal authority to run the charter academy, and the contracts of Michael Dickinson, as the chief executive officer, and Dickinson’s hand-picked chief financial officer, Mike Davis, who was paid $120,000 per year, were terminated.
Subsequently, the district was sued by the parents of one of its students, a 16-year-old girl. In that suit, it is alleged that the girl, who was then 15-years-old, had repeated sexual encounters with San Bernardino County sheriff’s deputy Nathan Gastineau, who was the girl’s mentor in her Police Explorer Scout activity that was coordinated at the academy. According to that suit, another student in October 2010 reported to officials at the Public Safety Academy an inappropriate relationship existed between the girl and Gastineau. A teacher told the principal at the school, who did not contact authorities, the lawsuit alleges. Depending on the outcome of the case, the San Bernardino City Unified School District, which chartered the Public Safety Academy, could be on the hook for millions of dollars.
In April 2011, the Adelanto Charter Academy was closed down when its sponsoring district, the Adelanto School District, revoked its charter after learning the academy was plagued with fiscal mismanagement, poor or non-existent record keeping, problems with teacher-to-student ratios and unsanitary food handling.
In February, 2011 the Victor Valley Union High School District Board of Trustees closed down the High Desert Academy of Applied Arts and Sciences based on the school’s failure, after nearly six years, to achieve accreditation.
In the Chino Valley Unified School District, the Oxford Preparatory Academy, a charter school, has had notable academic success, boasting the best Standard Testing And Reporting scores in San Bernardino County. The operation of the school, however, has put a financial strain on the district. Moreover, some parents of students who have not been accepted at the school have expressed disenchantment with what they consider to be an unjustifiable elitism in the arrangement that provides what appear to be unequal education opportunities to district students. The school board, under pressure from parents of children who attend Oxford Preparatory, in late December approved a five-year renewal of Oxford Preparatory Academy’s charter. But the district embittered critics when last month it denied a charter petition submitted by Neighborhood Arts and Sciences Academy because the school district lacked the financial means to fund that school.
Making its way through the legislature at this time is Assembly Bill 1172, which would permit school boards to turn down a charter school petition if that school would have a negative fiscal impact on the school district. The bill was recommended for a vote of the entire Assembly by a margin of 7 to 4 when it came before the Assembly Committee on Education on January 11.
Assembly Bill 1172 would amend existing charter school law so that school districts can deny a charter petition if the district has received a qualified or negative financial certification, or if the district demonstrates fiscal distress through its budget process, or if the district applies for or has received an emergency apportionment or loan under the oversight of a state administrator or trustee, or if the district, due to declining pupil enrollment, is closing a school that a charter school petition has identified as the proposed site for its charter school.
Under current law, a school board can deny a petition if the district has determined that the charter school has presented an unsound educational program in its charter request, or if the district makes a finding that the petitioners are unlikely to successfully implement the program, or if the petition fails to provide comprehensive descriptions of the school’s educational program, measurable student outcomes, governance structure and other operational requirements, or if the petition lacks the requisite number of signatures.
AB 1172 would provide many school districts  with grounds to deny a charter petition as most districts are reporting that they are likely to run deficits in 2013-14 without the imposition of severe cutbacks, including  laying off of teachers or other personnel.