Magnolia Science Academy #6 and #7 ordered CLOSED after forensic audit

http://laschoolreport.com/two-lausd-charter-schools-face-closure-after-fiscal-audit/

Two high performing LA Unified charter schools, Magnolia Science Academy 6 and Magnolia Science Academy 7, have been ordered to shut down after failing a new round of scrutiny, leaving the possibility that 450 students will be looking for a new school in the fall.

The two schools had initially been approved for renewal by the school board in March, pending the results of an internal fiscal audit by the district’s Inspector General. But the findings of that audit, which was concluded late last month, led the LAUSD Charter School Division to call off the four-year renewals.

“We are empathetic that parents and families are in this situation but it doesn’t touch the level of disruption it would cause if the schools were to shut down mid-year,” board member Steve Zimmer told LA School Report about the last minute closure.

“What is happening now is a function of our obligation as an authorizer. We have an obligation to make sure all of our schools are sound and to make sure the laws are followed,” said Zimmer, in whose district Magnolia Science Academy 6 is located.

Last week the schools’ management organization, Magnolia Charter Schools, filed an injunction in Los Angeles Superior Court to prevent the closures. A hearing is set for July 24th.

It’s unclear exactly how the schools violated the district’s guidelines — district officials declined to elaborate — but at the time of the renewal application the district was looking into the long-term fiscal viability of the two schools. Both have struggled to meet enrollment targets and were planning to eliminate grade levels next year. And neither school maintained the district’s recommended 5 percent in cash reserves as a rainy day fund.

Another issue that has dogged the schools’ operator in the past has been its ties to the Gulen movement, a Turkish Islamist group that has founded schools, think tanks, and media outlets around the world.

At the school board meeting in March, Inspector General Ken Bramlett confirmed claims of the association, “We have done some looking into that allegation and there is some evidence that some members of the Magnolia organization do have ties with the Gulen movement, but we have not found anything currently that would be grounds for denial.”

Instead, Jose Cole-GbEuitierrez, Director of the Charter School division told the board, “we want to do a deeper dive” into the schools’ financial state, before adding, “our expectation is that there [will be] no material weaknesses found in that review.”

But the findings of that audit apparently revealed enough damaging information that it triggered the non-renewal.

At last week’s board meeting Janelle Ruley, an attorney representing the Magnolia Science Academy schools, challenged the Charter School Division’s decision and its timing,

Below is the forensic audit for Magnolia #6 and #7, page 5 indicates these schools paid over $200,000 for h1-b immigration visas and many were not employees of the school.  MERF, one of the parent companies over the Magnolia Science Academies owes the schools $2.8 million. 

Magnolia Science Academy #6, Magnolia Science Academy #7 by laschoolreport