pener ugc nofollow" target="_blank" href="https://youtu.be/iLJ3HUe5ffg?t=66">Fiscal mismanagement, that would trigger revocation." - Jose Cole-Guitierrez
Generally Accepted Accounting Principles (GAAP) are the standards by which interested parties are assured that an organization's records reflect its true financial health. In the case of charter schools, interested parties would include parents who send their children to the school with the expectation that it will remain open through the end of the school year. Potential creditors, like bondholders and landlords, also need to know that the organizations that run these schools have the ability to pay their debts. In cases where the school is relying on donations, donors also have the right to know that they are not sending their money into a bottomless pit.
When the LAUSD authorizes a charter school, they assume responsibility for ensuring these rules, including the ones governing accounting, are followed. The district has delegated this responsibility to the Charter School Division whose employees are supposed to oversee the hundreds of charter schools operating within the district. The person the board has placed in charge of this division is Jose Cole-Gutierrez, who formerly "served as general manager of the Los Angeles Region for the California Charter Schools Association." With the fox in charge of the henhouse, the results have been predictable.
As previously reported, charter schools currently owe the LAUSD over $13.5 million in unpaid overallocation fees. According to a district source, 20 of the 58 charter schools that owe these fees, which are assessed according to a formula set by state law, have not paid any portion of their bill. This source also states that only $40,311.99 was paid in the third quarter of 2021. Unlike any other tenant who refused to pay fees outlined in their lease agreement, these delinquent charter schools are still allowed to occupy space in district schools.
The Citizens of the World nationwide chain of charter schools is one the largest debtors to the district under this program. Under GAAP, the $1,068,684.79 that they owe to the LAUSD should be recorded as a liability on their books. This is true even if the amount is disputed, especially if there is an "ability to make a reasonable estimate of the amount of the prospective loss." The existence of a state formula for determining this fee and agreements signed with the district should make this estimate an easy endeavor.
According to information obtained by the Charter School Division during oversight visits, Citizens of the World "has not accrued the amounts [due] as liabilities." However, instead of taking action against fiscal irregularity, the division has said it will continue to "monitor this matter through oversight."
Oversight for the public good involves more than uncovering flaws in the operation of an organization, it must also include taking the steps to ensure compliance. Since part of this debt goes back to the 2016-17 school year, Jose Cole-Gutierrez and the Charter School Division have had plenty of time to force charter schools to pay the money that they owe. The fact that the matter continues to be unresolved is proof that Cole-Gutierrez is either unwilling or unable to perform his duties of good governance. It is time for new leadership in the charter school division.
Carl Petersen is a parent advocate for students with special education needs and public education. He is an elected member of the Northridge East Neighborhood Council and serves as the Education Chair. As a Green Party candidate in LAUSD's District 2 School Board race, he was endorsed by Network for Public Education (NPE) Action. Dr. Diane Ravitch has called him "a valiant fighter for public schools in Los Angeles." For links to his blogs, please visit www.ChangeTheLAUSD.com. Opinions are his own.
