Report 2016-141 Recommendation 18 Responses
Report 2016-141: Charter Schools: Some School Districts Improperly Authorized and Inadequately Monitored Out‑of‑District Charter Schools (Release Date: October 2017)
Recommendation #18 To: Acton-Agua Dulce Unified School District
To better ensure effective oversight of its charter schools' finances, Acton-Agua Dulce Unified should place a district representative as a nonvoting member on each charter school's governing board.
Annual Follow-Up Agency Response From October 2021
The District has consistently pointed out that Recommendation 18 is illegal - nonvoting members cannot serve on non-profit public benefit corporation boards and all District-authorized charter schools are governed by non-profit public benefit corporations.
The District has consistently declined to place a voting member on the boards of independently operating charter schools. Under state law, charter schools are supposed to exist independently from their authorizers. Entangling the two entities could undermine independence, accountability, and oversight. Additionally, given that the law has been clarified to state that charter school board members are unequivocally subject to California's various conflict of interest laws, the District is concerned that any potential benefit to District oversight would be offset by the conflicts of interest that could arise for the District-appointed charter board member.
- Completion Date: October 2019
California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement
We stand by our recommendation that Acton-Agua Dulce Unified should exercise its right to place a district representative as a nonvoting member on each charter school's governing board. As noted in Figure 3 of the audit report, a school district we reviewed waited nine months for its district representative to be appointed to the governing board of one of its charter schools. During that time, the charter school's governing board entered into a questionable lease and did not report that lease to the district, thus exacerbating the charter school's financial issues. Therefore, we believe that Acton-Agua Dulce Unified could ensure timely oversight of its charter schools by placing a district representative on each charter school's governing board.
- Auditee did not address all aspects of the recommendation
Annual Follow-Up Agency Response From October 2020
The District has consistently pointed out that Recommendation 18 is illegal - nonvoting members cannot serve on non-profit public benefit corporation boards and all District-authorized charter schools are governed by non-profit public benefit corporations.
The District has consistently declined to place a voting member on the boards of independently operating charter schools. Under state law, charter schools are supposed to exist independently from their authorizers. Entangling the two entities could undermine independence, accountability, and oversight. Additionally, given that the law has been clarified to state that charter school board members are unequivocally subject to California's various conflict of interest laws, the District is concerned that any potential benefit to District oversight would be offset by the conflicts of interest that could arise for the District-appointed charter board member.
California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement
We stand by our recommendation that Acton-Agua Dulce Unified should exercise its right to place a district representative as a nonvoting member on each charter school's governing board. As noted in Figure 3 of the audit report, a school district we reviewed waited nine months for its district representative to be appointed to the governing board of one of its charter schools. During that time, the charter school's governing board entered into a questionable lease and did not report that lease to the district, thus exacerbating the charter school's financial issues. Therefore, we believe that Acton-Agua Dulce Unified could ensure timely oversight of its charter schools by placing a district representative on each charter school's governing board.
Annual Follow-Up Agency Response From November 2019
The District has consistently pointed out that Recommendation 18 is illegal - nonvoting members cannot serve on non-profit public benefit corporation boards and all District-authorized charter schools are governed by non-profit public benefit corporations.
More recently, the State Auditor has suggested that the District could use Education Code section 47604(b) to place a voting representative on each charter school's board. While that authority exists, the District has consistently declined to place a voting member on the boards of independently operating charter schools. Under state law, charter schools are supposed to exist independently from their authorizers. Entangling the two entities could undermine independence, accountability, and oversight. Additionally, given that the law has been clarified to state that charter school board members are unequivocally subject to California's various conflict of interest laws, the District is concerned that any potential benefit to District oversight would be offset by the conflicts of interest that could arise for the District-appointed charter board member.
California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement
We stand by our recommendation that Acton-Agua Dulce Unified should exercise its right to place a district representative as a nonvoting member on each charter school's governing board. As noted in Figure 3 of the audit report, a school district we reviewed waited nine months for its district representative to be appointed to the governing board of one of its charter schools. During that time, the charter school's governing board entered into a questionable lease and did not report that lease to the district, thus exacerbating the charter school's financial issues. Therefore, we believe that Acton-Agua Dulce Unified could ensure timely oversight of its charter schools by placing a district representative on each charter school's governing board.
1-Year Agency Response
District-authorized charter schools operate as, or are operated by, non-profit public benefit corporations. California Corporations Code section 5047 prohibits non-voting directors on boards of non-profit public benefit corporations. Therefore, it would be illegal for the District to place non-voting directors on the charter schools' boards.
- Response Date: October 2018
California State Auditor's Assessment of 1-Year Status: No Action Taken
The district notes that California Corporations Code section 5047 prevents it from implementing this recommendation with regard to nonvoting board members. However, California Education Code section 47604(b) also allows districts to place a representative on the board of directors of their charter schools' nonprofit public benefit corporations. Thus, we believe that districts can still place a district representative on a charter school's board.
6-Month Agency Response
The District's authorized charter schools operate as, or are operated by, non-profit public benefit corporations. The District believes that California Corporation section 5047 prohibits non-voting directors on boards of non-profit public benefit corporations. The District continues to consider alternatives to non-voting directors.
- Estimated Completion Date: October 2018
- Response Date: June 2018
California State Auditor's Assessment of 6-Month Status: Pending
Per Acton-Agua Dulce Unified's response, its implementation of this recommendation is currently pending.
60-Day Agency Response
The District's Administration will present the District's Board with the Auditor's recommendation that the District place a non-voting member on each authorized charter school's governing board. However, the District's authorized charter schools operate as, or are operated by, non-profit public benefit corporations. The District believes that California Corporation section 5047 prohibits non-voting directors on boards of non-profit public benefit corporations. The District continues to consider alternatives to non-voting directors.
- Estimated Completion Date: June 2018
- Response Date: February 2018
California State Auditor's Assessment of 60-Day Status: Pending
Per Acton-Agua Dulce Unified's response, its implementation of this recommendation is currently pending.
All Recommendations in 2016-141
Agency responses received are posted verbatim.