Learning company that once served local districts focus of state audit
SACRAMENTO — An online learning company that once partnered with Lodi Unified School District to serve its students is the focus of a state audit, State Superintendent of Public Instruction Tom Torlakson announced this week.
The California Department of Education has contracted with the State Controller’s Office to conduct an audit of California Virtual Academies and the group’s related charter schools because serious questions have been raised about a number of their practices. It is expected to be completed next March.
“The goal of the audit is to make sure these schools are spending public education funds properly and serving their students well,” Torlakson said in a press release.
• Are organizationally separate from K-12, Inc. a for-profit company that these non-profit charter schools contract with.
• Accurately reported attendance, enrollment, and dropout graduation rates to the California Department of Education.
• Appropriately allocated and reported shared expenses.
• Appropriately identified, accounted for and disclosed related-party relationships.
According to a lawsuit filed in San Francisco two years ago, the same organization was accused of diverting students and money to its own charter schools.
The lawsuit was filed by David Ehrenfeld, a former employee of K12, Inc. who helped the company enter a contract with Lodi Unified to create an online learning program. He claimed in his lawsuit that K12 later tried to siphon students and money into a charter school owned by K12.
Ehrenfeld, who was seeking back wages and lost commissions from K12, was the national account manager for Lodi Unified, an online program for Elk Grove Unified School District and K12’s California Virtual Academy-San Joaquin, which was overseen by Stockton Unified.
Although not specifically named in the suit, Lodi Unified entered a contract in spring 2011 with K12 to begin an online learning program for students, but the program fizzled and was not continued after two school years.
The virtual academy used one part-time and one full-time district teacher specially trained by K12, and was overseen by an Independence School administrator at Henderson School. Students were required to visit Independence School regularly to meet with a teacher to discuss progress and turn in coursework.
But the academy closed in Lodi Unified in 2013, when district officials said enrollment expectations were not met. There were only 12 students during the first school year, according to district figures, although K12 had promised at least 100 students when the program was approved by the school board.
In his lawsuit, Ehrenfeld claimed that K12 diverted students into CAVA, shifting state money based on student attendance. His also contended that unnamed clients discovered and reported that K12 was diverting students intending to enroll in public school district-operated independent study programs into K12-operated public charter schools, including CAVA.
State records show that, while Lodi’s virtual academy sputtered for lack of students, state apportionment based on CAVA’s student enrollment nearly tripled — from 559 students to 1,512 — during the time period K12 served Lodi Unified, according to the State Department of Education.
The suit did not list damages to Lodi Unified or any other district that affiliated with K12, as Ehrenheld was solely seeking compensatory damages for personal wage and benefit loss. It is unclear whether there was a resolution in the case
In a previous interview, Tim Hern, Lodi Unified’s chief business officer, said records indicate the district split student income with K12, with the district drawing $46,380 and K12 receiving $17,615. The balance was used to offset the district’s cost of instructors for the program.
Under its contract with the district, K12 coordinated and oversaw student enrollment. Hern said that arrangement could mean the district would not have been aware of irregularities in student transfers.
“Because they were handling enrollment, I don’t think we would have ever known that, if it was happening,” Hern previously said.
The K12 program was launched before he joined the district, and the district officials who orchestrated the program have since left.