1T6-511 teaching - Network Analysis and Troubleshooting Updated: 2024

Leaked voice recordings expose a patronage network within South Africa’s Department of Higher Education, implicating Minister Dr Blade Nzimande and NSFAS Chair Ernest Khosa. The Organisation Undoing Tax Abuse (OUTA) demands their resignations, alleging kickbacks from service providers in return for tenders and protection. OUTA releases recordings supporting their claims, calling for investigations by authorities. The recordings detail corrupt practices, leading OUTA to open a criminal complaint against Nzimande, Khosa, and others. Concerns rise about mismanagement affecting thousands of students and the potential impact on accommodation tenders. OUTA urges students to scrutinise leadership with integrity.

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Media release from The Organisation Undoing Tax Abuse (OUTA)

Leaked voice recordings contain damning allegations about a patronage network in the Department of Higher Education, implicating the minister, NSFAS chair and several others

The Organisation Undoing Tax Abuse (OUTA) calls for the resignation of Dr Blade Nzimande, Minister of Higher Education and Training, and Ernest Khosa, chairperson of the National Student Financial Aid Scheme (NSFAS) board. “If they don’t resign, we call on President Cyril Ramaphosa to fire them immediately,” says Rudie Heyneke, OUTA’s Investigations Manager.

In support of this call, OUTA releases voice recordings of two meetings between Khosa and a representative of a service provider which reveal how service providers allegedly paid millions of rand in kickbacks to Nzimande and Khosa, as well as at least R1 million to the South African Communist Party (SACP). This was done in return for tenders and protection for service providers.

The recordings and OUTA’s accompanying report are the latest bombshell exposing corruption and mismanagement at NSFAS. The scheme admitted earlier this week that at least 20 000 students countrywide are still waiting for 2023 allowances to be paid. The payment system to students all but collapsed after four new service providers were awarded the tender for facilitating direct payments to students since July 2023. They are: Coinvest Africa (Pty) Ltd, Tenet Technology (Pty) Ltd, Ezaga Holdings (Pty) Ltd and Norraco Corporation (Pty) Ltd.

OUTA had warned as early as October 2022 that awarding the tender to these service providers would lead to problems with student payments while costing taxpayers millions of rand in additional funds. Since then, OUTA has published several more reports detailing mismanagement of funds meant for students, while also exposing the role of NSFAS CEO Andile Nongogo, tracing his nefarious activities back to his tenure as CEO at the Services SETA (SSETA). (See here.)

OUTA’s latest detailed investigative report and the voice recordings will be shared with authorities, including the Special Investigating Unit (SIU), Public Protector, SARS and the Auditor-General’s office. According to Heyneke, the voice recordings have already been shared with the SIU, which has been investigating corruption at NSFAS since 2022. “There needs to be a thorough investigation into the vast web of corruption in the higher education sector, which OUTA’s various reports and these recordings reveal,” says Heyneke. 

The recordings – leaked by a whistleblower – document two separate meetings that took place after the NSFAS board resolved (on 16 August 2023) that the CEO, Andile Nongogo, was to be placed on special leave while a board-ordered investigation into his conduct was being undertaken. At the time of the meeting, the board’s decision hasn’t been made public yet. The investigation followed on another OUTA report detailing Nongogo’s relationship with the directors of Coinvest, one of the NSFAS direct payment service providers, that could be traced back to Nongogo’s tenure as CEO of the Services SETA (SSETA). (Read more here.)

The announcement of Nongogo’s leave of absence came a day after Khosa met with Thula Ntumba, husband of Tshegofatso Ntumba (who is one of two Coinvest directors).

During this meeting Khosa told Ntumba and an unidentified third person that he was familiar with the contents of the OUTA report and the allegations against Nongogo. Khosa said the only way the NSFAS board could react was to put Nongogo on special leave and then report to Parliament on the steps the board would take to handle the situation. Khosa also said the OUTA report was not the biggest problem, but rather a conspiracy from inside the ANC – he specifically mentioned Deputy Minister of Higher Education and Training, Buti Manamela – that wanted to get rid of Khosa and Nzimande.

During this meeting Khosa further stated that the board granted him the sole authority to draft the terms of reference for an investigation, which gave him the opportunity to exclude everything that would possibly create a problem for Nongogo. Khosa said since he was aware of Nongogo’s wrongdoing in the past, he would make sure that they would not be caught out.

Khosa then mentioned another big problem: the need to appoint a legal firm that he would be able to control. He asked Ntumba for suggestions. Ntumba responded by suggesting Werksmans Attorneys for the investigation, and promised to supply Khosa the name of a partner that NSFAS would be able to control.

The third, unidentified person asked Khosa about certain letters that Nongogo had to sign. Khosa not only confirmed that he had seen the letters but even admitted to changing the contents. He warned that the minister was thinking that their relationship with the service providers would become known, adding that he suspected that investigators were tracking their cell phones to establish if there were meetings between the minister, the chairperson, and the service providers.

Heyneke says it is unethical, highly irregular and against all the principles of good governance for the chairperson of the board to meet with service providers and request input on board decisions. “Why was it even necessary for Khosa to meet these people and to update them on internal matters and request their input for the way forward?”
The answer to this question can be found in the recordings of a second meeting between Khosa, Ntumba and an unidentified third person about two weeks after the first meeting.

The recording of this meeting revealed that millions of rand were paid to the SACP, Minister Nzimande and Khosa. During the first part of the meeting, which lasted for one and a half hours, Ntumba and the unidentified person discussed Khosa and his conduct at length. They also conspired how to place him under pressure to extend the investigation period into Nongogo’s conduct for at least three months.

They alleged that it was Khosa’s intention to threaten them with the termination of the Coinvest/NSFAS contracts so that they would pay him to prevent the termination of the contracts. Ntumba furthermore alleged that Khosa met with the chairperson of Fundi, another company doing business in the higher education sector, and suggested that Fundi may have paid Khosa and was now putting pressure on him. (Fundi tendered for several NSFAS contracts but was never awarded any.)

They also discussed the criminal charges against Khosa while he was the CEO of the Mpumalanga Economic Empowerment Commission (now known as the Mpumalanga Economic Growth Agency), previous meetings they had with him and the minister and how Khosa allegedly openly talked about a bribe of R6 million in the presence of another NSFAS board member and former president of SASCO, Bamanye Matiwane. Ntumba also mentioned a meeting he had with Nzimande where his special advisor, Nqaba Nqandela, was present.

When Khosa joined the two men, he assured them of his good relationship with Minister Nzimande and briefed them on the ongoing investigation by Werksmans Attorneys, which he confirmed he appointed on Ntumba’s advice. Khosa referred to OUTA’s investigation into Nongogo’s term as SSETA’s CEO, repeating that he did not believe Nongogo had done anything wrong at NSFAS.

Khosa discussed the progress of the Werksmans’ investigation, after which Ntumba requested that – should the Werksmans report suggest cancelling the service provider contracts – that it should be done in such a way that Coinvest would not look “guilty”. Ntumba also referred to Coinvest’s sponsorship by Nedbank, saying that it was too important to lose if they were found to be involved with any irregularities.

Both men informed Khosa that, although everything did not go according to plan, the “top players” were still willing to supply “incentives” even if these had to come from “other sources”. Ntumba reminded Khosa that he paid R1 million towards the SACP conference, together with Star Sign and Print which printed T-shirts and bags for the conference. Ntumba’s wife is a director of Star Sign and Print, the company OUTA previously exposed for charging the SSETA heavily inflated prices for printing and branding services while Nongogo was the CEO.

Ntumba left the meeting early because of another appointment. When he walked out, the recording stopped, strongly suggesting that he was the person who had the recording device. It is not clear why he recorded the conversation, but it is OUTA’s view that he needed something to have some leverage on the chairperson.

OUTA believes that the recordings confirm a lot of what OUTA has stated in the past, particularly about patronage networks within the Department of Higher Education as well as higher education institutions. Public officials and service providers apparently use these networks to enrich certain individuals in turn for being awarded tenders and contracts.

Companies linked to Ntumba were awarded tenders worth millions in the past by different SETAs and also more recently at NSFAS. The recordings confirm that Ntumba and his associates financially looked after people like Nzimande, Khosa and Nongogo. They in turn rewarded Ntumba and companies linked to him with contracts. This has already been exposed by several of OUTA’s investigation reports.

Heyneke said that the findings of the Werksmans’ report vindicated OUTA’s findings on Nongogo’s involvement with the awarding of tenders to Coinvest, Ezaga, Norraco and Tenet Technology (also known as Tenetech). “OUTA is satisfied with the outcome of the Werksmans’ investigation. While Khosa – on the advice of Ntumba – appointed Werksmans in the mistaken believe that they would be able to control the firm and influence the outcome of the investigation, this plan definitely backfired,” says Heyneke.

“While NSFAS acted on Werksmans’ recommendation that Nongogo should be removed as CEO, it remains unclear why the four service providers haven’t been removed yet, especially since thousands of students countrywide are still waiting for allowances and tuition fees for last year to be paid – it is clear for everyone to see that the service providers are not capable of doing the job. It seems that Khosa did indeed heed the call not to terminate the contracts of the service providers as was discussed in the recordings, although it was one of the Werksmans’ recommendations.” The recordings indicate that Ntumba was concerned that the contracts should not be cancelled immediately even if Werksmans recommended this, and this was discussed at length. To date, OUTA understands that the service providers have not received any notification of any cancellation.

OUTA is very concerned that the accommodation tenders awarded by NSFAS have the potential to again leave thousands of students without accommodation at the start of this academic year. By 4 October 2023 NSFAS reported to the Higher Education Portfolio Committee in Parliament that a mere 25 803 (or 6.5%) of the required beds had been accredited. “It is highly unlikely that there will be enough beds accredited in time for the new academic year that starts in a couple of weeks,” says Heyneke.

He says NSFAS students do not deserve this kind of treatment. “It is clear that the students are the last thing on the minds of the minister, the chairperson, NSFAS management and the service providers who were appointed to serve the students. With elections around the corner, we remind students that they should not allow self-serving leaders with questionable integrity to remain in powerful positions, or for similarly tainted leaders to be elected to those positions. As future leaders, students have important decisions to make about their own futures as well as that of the country.”

Apart from sharing the recordings and investigation report with authorities and writing to President Ramaphosa requesting Nzimande’s removal as cabinet minister and Khosa’s removal as NSFAS chairperson, OUTA will also open a criminal complaint against Nzimande, Khosa and Ntumba. “We expect the SAPS to thoroughly investigate the corruption charges that OUTA will submit,” says Heyneke.

OUTA will also inform Nedbank of the conduct of their client Coinvest. “Nedbank needs to thoroughly investigate their client and reconsider their sponsorship.”

Read also:

General education requirements may be found in the College Catalog and are copied below:

General Education for the Classes of 2020, 2021, and 2022:

A Bates Education is structured around a major, General Education requirements, and other elective courses. Some students declare two majors; many declare a major and minor.

The General Education requirements include the following types or groups of courses:

1. Two four-course concentrations

Each student successfully completes two General Education concentrations. A concentration consists of four courses chosen from a faculty-designed menu that is structured on the basis of a clearly articulated organizing principle. Some concentrations may include relevant co-curricular experiences such as significant community service, orchestra, chorus, theatrical productions, or volunteer work.

Concentrations may focus on a particular issue or course or area of inquiry identified by several professors working across different disciplines; examples include “Environment, Place, and History” and “Public Health.”

Concentrations may also be formed within a single department or program; examples of these include “Chinese Language” and “Philosophy.”

If a student elects a second major, it counts as one of the two required concentrations. If a student elects a minor, it counts as one of the concentrations.

2. Three writing-attentive courses

Each student successfully completes three writing attentive courses, one at the first-year level [W1], one at the sophomore or junior level [W2], and one at the senior level, usually the senior thesis [W3]. W courses help students refine their writing skills as they move through their Bates career, so that they are well-prepared to undertake significant writing for a senior thesis or capstone project.

3. Three courses focused on scientific reasoning, laboratory experience, and quantitative literacy

Each student completes: a) one course that focuses on scientific reasoning [S], which may or may not have a laboratory; b) one course that includes a regularly scheduled laboratory component [L]; c) one course focused on quantitative literacy [Q]. Though many Bates courses fulfill two or three of these requirements, the requirements must be met by three distinct courses.

General Education for the Class of 2023 and beyond:

The faculty revised the General Education requirements effective with the Class of 2023 and beyond. Students in the classes of 2020, 2021, and 2022 should follow the General Education requirements in the 2018-2019 catalog.

1. One Concentration.

In addition to the major, students successfully complete course work in a second area of study, whether a General Education Concentration (GEC), a minor, or a second major. A concentration consists of 4 courses chosen from a faculty-designed menu that is structured around a clearly articulated organizing principle. Some concentrations also include relevant co-curricular experiences such as significant community service, musical ensembles, summer research, or volunteer work that may be applied in lieu of a course toward fulfillment of the concentration. Most co-curricular experiences, though counting toward a concentration, may not be counted toward the total credits needed for graduation. Some concentrations allow the use of one or two non-Bates courses if they are preapproved by the concentration coordinator as comparable to the Bates courses in the concentration.

Concentrations are of two basic types: 1) concentrations focusing on a particular issue or course or area of inquiry identified by self-constituted groups of faculty in different disciplines; 2) concentrations within a single discipline.

Regardless of how a student satisfies the requirement for a second area of study, whether by completing a GEC, minor, or a second major, the name of the second area of study appears on the student’s transcript and is a permanent part of the student’s academic record.

Requirements in both the major and the second area of study may be simultaneously satisfied by individual courses without restriction. However, some GECs, minors, and second majors are unavailable to students pursuing certain majors if the course work is deemed too closely related to ensure breadth. Any such exclusions are detailed in the descriptions of majors, minors, and GECs in the college catalog.

2. Three Writing-Attentive Courses.

Students successfully complete 3 writing-attentive courses, one in their first year at the first level [W1], a second [W2] in the sophomore year or later and before the W3, and a third course [W3] during the senior year. First-level courses [W1] are typically first-year seminars. The third-level writing-attentive requirement [W3] is usually fulfilled by completing a senior thesis. When appropriate, writing-attentive courses may also be used to fulfill any other degree requirements at Bates. All three writing-attentive courses must be taken at Bates.

3. Modes of Inquiry.

To acknowledge the importance of the entire scope of the liberal arts and to ensure additional breadth of education beyond the major and the second area of study, students successfully complete 5 courses with distinct approaches to scholarly inquiry.

Courses that satisfy these requirements, which are labeled as such in the college catalog, significantly engage students with the particular mode of inquiry. In addition to providing opportunities for students to develop facility with the mode of inquiry, instructors may encourage students to critically evaluate the values, strengths, and limits of mode-specific methodology. Students can then reflect on the epistemological differences between varied approaches to constructing knowledge.

1. Analysis and Critique [AC]
   This mode examines cultural products and processes to consider how and why meaning is created and contested, arguments are constructed, art is produced, and values are established. Courses with this designation help students understand how forms of representation create and communicate meaning as they explore the workings of language, rhetoric, informal reasoning, and systems of belief. Students analyze, for example, aesthetic patterns, artistic traditions, philosophical argumentation, and rhetorical strategies to acquire the critical skills to identify and investigate the complex dynamics, norms, beliefs, and agencies at play within cultural products and processes.
2. Creative Process and Production [CP]
   This mode provides the skills requisite for the creation and production processes and experiments with ways to express, test, and/or supply form to ideas. Whether making art, composing music, writing creatively, producing film, envisioning the world in a new language, or performing in various ways, students in courses with this designation engage with and develop their ideas and imagination. Students enter into a dialogue with past and current practices, reexamining them and gaining an understanding of the fields from a maker’s, experimenter’s, or performer’s point of view.
3. Historical and Social Inquiry [HS]
   This mode of inquiry explores the history and complexity of the individual, human societies, and social interaction, from the intimate to the global, across time and space. Courses with this designation pay attention to the diverse tools scholars use to examine systematically the way in which humans experience, construct, and behave within the social worlds they inhabit, around the world and across the millennia. They often consider how social structures define and distribute wealth, power, and status amog different human populations. As students investigate the bidirectional relationships between individuals and groups, groups and societies, and socieities and nations, they note how contextual variables at each level of anaylsis influence how people understand themselves and others and foster an empathetic understanding of the human condition.
4. Scientific Reasoning [SR]
   Scientific reasoning is an interative process that uses empircal observations to develop and test theories about the natural world. Courses with this designation teach students the utility of scientific reasoning when developing explanatory models that unify a broad range of systematic observations. Students explore the process of testing hypotheses and theories by comparing predictions to observations. Through activities that may include gathering, analyzing, and interpreting empirical measurements, students learn the value of reliable data for drawing scientific conclusions.
5. Quantitative and Formal Reasoning [QF]
   Quantitative reasoning is the application of basic mathematics and statistics to interpret data, draw conclusions, and solve real-world problems. Formal reasoning involves developing, understanding, and manipulating symbols based on an explicit set of rules. Courses with this designation sharpen students’ facility with numerical, logic, and other symbolic systems. By applying basic mathematics and analysis tools (e.g., graphing, simple statistics), students learn to extract meaning from real-world data. Experience with formal systems such as logic, computer programming, and mathematical proofs hones students’ ability to make valid deductions in abstract contexts and sound judgments in everyday life. Learning how and when to engage explicit rules for decision making enables students to formulate and assess quantitative arguments and logical constructions.

No double-dipping is allowed among [AC], [CP], [HS], [SR], and [QF] courses; these requirements must be met by five distinct courses. If an individual course is designated by two different modes of inquiry, the student may elect one mode or the other, but not both simultaneously. However, students may apply a total of up to two courses from the combined major and the second area of study toward fulfilling the mode of inquiry requirements. Consequently, students must fulfill at least three modes of inquiry from courses outside the major and the second area of study. Non-Bates courses can be applied to the Modes of Inquiry requirements if they are determined to be equivalent to a Bates course that is tagged with mode designations.

Pass/Fail and General Education. Courses taken pass/fail do not count toward General Education requirements.

Inspire, a home school charter network that once served tens of thousands of students statewide, for years lacked records to justify its claims for state funding and tens of millions of dollars in transactions among its schools and related organizations, a new state audit found.

The Inspire network, which included two schools authorized out of San Diego County, also overreported student attendance and, as a result, collected about $609,000 more in public money than it was supposed to, according to the audit, which scrutinized the network’s activities from 2017 to 2020.

The audit’s findings suggest that Inspire’s lapses resulted in part from some of the same financial practices and weaknesses in oversight that have allowed other California charter school operators to get more taxpayer money than they were entitled to — including the A3 charter school leaders who were indicted four years ago after fraudulently obtaining $400 million from the state.

At the heart of many of Inspire’s issues, according to the audit and past reporting by The San Diego Union-Tribune, was a charter management organization that operated outside of the public eye and wielded control over virtually all aspects of the schools’ operations and finances. That control, auditors found, extended to the point that it was moving money between the schools and some outside entities — and even moving students and staff between schools — without the individual schools’ knowledge or approval.

Auditors said the Inspire charter management organization either lost or destroyed many required records and supporting documentation needed to justify its financial transactions and how it claimed student attendance, which is the basis for how the state allocates funding to schools. Inspire kept records in such poor condition that it could not reconcile many transactions, to the point it could be considered negligence, auditors added.

“When you have a lack of records, unreliable records, all those things, that sends up lots of red flags,” said Michael Fine, the CEO of the Fiscal Crisis Management and Assistance Team, the state’s education auditing agency that conducted the review of Inspire.

Auditors said they were not able to conclude whether fraud may have occurred, largely because Inspire’s records were in such poor condition.

They also couldn’t get enough information because the person who was central to the Inspire network and responsible for much of its decision-making, founder and former CEO Herbert “Nick” Nichols, did not participate in the audit.

Staff at the individual schools cooperated, but they were of limited help because their parent corporation had withheld so many records from them, Fine said.

“Adequately reviewing and resolving allegations regarding audits of this type is often difficult when the quality of the record-keeping, accounting practices and oversight by a sole member (charter management organization) is significantly poor,” auditors wrote. “This type of situation also provides more opportunities for fraud and can lead to the appearance of fraud when none has occurred.”

The audit’s findings “should be of great concern” to the Inspire schools, their authorizers and their county offices of education, and they “require immediate intervention to limit the risk of fraud, mismanagement and/or misappropriation of assets,” auditors wrote.

Auditors recommended that state schools Superintendent Tony Thurmond use their findings to recover state funding that some Inspire schools shouldn’t have received and supply funding to other Inspire schools that had been underfunded based on the incorrect attendance reporting.

Each of the eight county superintendents who requested the audit must present the report’s findings, along with their recommendations, to the board of each charter school in their county that was part of the Inspire network, according to state law.

After that, each charter school will have 15 days to tell the county superintendent what steps it will take in response.

‘In the rear view’

While the audit has relevance and policy implications for California, Fine said, the report may be less relevant to the Inspire schools themselves because they no longer exist as a network.

The schools cut ties with the Inspire charter management organization years ago, and the network has since broken up. The charter management organization, a nonprofit corporation that used to be called Inspire District Office and later Provenance, had shut down as of last year, according to its tax filings.

The leaders of the two Inspire schools authorized in San Diego County, Cabrillo Point Academy and Pacific Coast Academy, said the problems identified in the audit were with their former charter management organization, not their own schools. They said they have been working with state auditors and their authorizer, Dehesa School District, in recent years to address the issues that auditors raised.

“We very much believe these issues are in the rear view for the current school,” Cabrillo Point Academy Executive Director Jenna Lorge said in an email.

The superintendent of Dehesa, a small East County district that as an authorizer is charged with oversight of its charter schools, said in an email that “there were no major surprises in the report as many of the concerns raised previously were with the previous charter management organization.” Dehesa has also since beefed up oversight of its five charter schools and implemented an in-depth annual oversight process.

But it’s unclear if money owed to Inspire schools by the former leader of Provenance has been fully repaid.

Nichols, the charter management organization’s former CEO, resigned in October 2019, when county officials were starting to ask for a state audit. By that time, all the Inspire schools had met and taken a vote of no confidence in him, according to the audit report, and Provenance was intending to fire him, according to his separation agreement.

As part of that agreement, by December 2020 Nichols was required to repay, with interest, $1.1 million in payroll advances that he had taken from multiple Inspire schools and Provenance.

As of January 2020, Nichols still had $840,000 in principal to repay. But Fine said he doesn’t know if Nichols ever repaid all of it, or if the schools he was borrowing from have received all the money due.

Nichols did not respond to requests for comment for this story.

Missing records, byzantine spending

The state audit began months after the Union-Tribune reported in 2019 on the Inspire network’s financial and organizational practices, which included high-interest borrowing and inter-borrowing among Inspire schools and other affiliated entities. The Inspire schools, which Nichols founded, were paying 15 percent of their revenue to Provenance, which Nichols also led.

The Inspire network grew rapidly in enrollment. Part of Inspire’s draw was that it gave students thousands of dollars a year to purchase activities such as horseback riding lessons and dinner theater performances under the guise of enrichment and education; after the Union-Tribune’s reporting, Inspire restricted what families could buy with school enrichment funds.

By February 2020 eight county superintendents, including San Diego County’s, had asked the state to audit the Inspire network. They cited concerns about attendance reporting irregularities, enrichment funds practices, manipulation of student enrollment and revenue across its schools and affiliated corporations, and interrelated transactions and conflicts of interest among Inspire executive officers and directors, among other things.

The superintendents said they were concerned that Inspire’s activities could be similar to those of the A3 charter network.

The state auditing agency studied Inspire’s activities from only 2017 to 2020 because that was the scope that the eight superintendents had requested almost four years ago. Eight of Inspire’s 15 schools were audited.

A number of factors delayed the audit, including the pandemic, travel restrictions, Inspire staffing shortages and scheduling conflicts, auditors said.

But chief among them was the fact that Inspire’s records were so inconsistent and incomplete that they were unreliable.

Auditors said Inspire’s charter management organization failed to provide records or supporting documentation for any of the school years studied to justify its reporting of student attendance. Individual Inspire schools’ attendance reports did not match up with the reports that the charter management organization was sending to the state to claim public funding, the audit found.

Provenance was not reconciling transfers or borrowing between the schools and affiliated organizations, so it was impossible to know how much a school was truly owed, auditors said. In one year, half of the transfer balances among Inspire entities did not match up with each other, and accounts in the Inspire network could have been out of balance by as much as $1 million, auditors found.

For $37.5 million worth of transactions made by Inspire entities — more than half of the transaction dollars that auditors reviewed — auditors found significant problems. Some transactions were missing supporting documentation; for others, the educational purpose could not be identified. In some cases, Provenance had failed to notify a school of a transaction involving its own money.

“A Inspire charter school that had no relationship, interest, or anything to do with an expenditure may have paid for the expenses or purchases of any entity throughout the Inspire network,” auditors wrote.

The summer session problem

One of the biggest problems auditors found, Fine said, was that Inspire was collecting additional state funding through a summer school program, which state law does not allow.

Inspire was using a multi-track calendar system, serving students on different calendar tracks during the same school year. Inspire offered a summer program at some schools through a Track A program that began in July, according to the audit.

State law allows schools to run multiple tracks, but only if each track serves students for 175 days, the length of a full school year.

Inspire was enrolling students in Track A for only the summer, at most eight weeks, auditors said. And it geared the summer program primarily toward students who were attending other district or charter schools, so students were simultaneously enrolled at their regular schools and in Inspire schools through the summer program, Fine said.

Some school district authorizers had even asked their own charter schools to provide a summer-only program for their district students because those districts couldn’t offer their own, Inspire staff told auditors.

While California taxpayers were already paying for a full school year’s worth of education for those students at their regular schools, they were also paying extra money for students enrolled in Inspire’s summer school, Fine said.

Staff at the individual Inspire schools told auditors that the intent of the summer program was not to profit off the state. The Inspire parent organization “may have misunderstood the issue” of receiving attendance funding for summer-only programs, auditors said.

This misuse of the multi-track system isn’t unique to Inspire. Fine said he has seen this happen with schools multiple times before, and it’s one of the same techniques that A3 charter school leaders exploited to get more state funding than they were allowed.

Inspire managers canceled their Track A summer program after the A3 indictment, according to the audit.

‘Tightened up’ transparency

The audit’s findings also highlight transparency issues with charter management organizations, Fine said.

Provenance hid records and information from the schools, so the schools didn’t know what the corporation was doing with their own money and the schools’ boards weren’t making their own decisions, according to the audit.

“You can’t use a related third-party organization to hide your records … in essence, that’s probably what they were doing,” Fine said.

The relationship between the Inspire corporation and the Inspire schools was not unique, either. Multiple California charter school networks have similar arrangements, where the schools pay a chunk of their revenue to a separate corporation, which in turn provides virtually all of the schools’ operations such as curriculum, financial management, enrollment services and more.

Under a 2019 state statute, charter management organizations are subject to transparency laws, including the Brown Act and the Public Records Act, just as school districts and charter schools are.

Yet such organizations frequently refuse to disclose their records, arguing they are contracted vendors, not charter management organizations — even though they handle much of the schools’ operations and essentially all of their revenue is public funding through the charter schools. Provenance had previously denied public record requests by the Union-Tribune using this claim.

Fine said oversight officials need to make sure they are enforcing transparency laws on third-party charter management organizations.

“The structure that we have that allows the charter management organizations, and all of that, probably needs to be tightened up a little bit,” Fine said.

The issue of oversight

Oversight of charter schools is largely supposed to come from their authorizer, usually a school district or county office of education, which approves a charter school’s opening and renewals.

Oversight is also supposed to come from hired auditors — every year, school districts and charters must get an audit of their finances and attendance accounting.

But A3 and Inspire highlighted ways in which those checks can fail.

Many charter authorizers are tiny, rural school districts that don’t dedicate much time or resources to oversight. These small districts also have a financial incentive to authorize and keep more charter schools, because they receive oversight fees from these schools.

And because schools hire their own auditors, they can simply replace an auditor if they don’t like its findings.

It’s the responsibility of charter authorizers, auditors and county offices of education to certify that schools’ attendance reporting is in compliance, Fine said. He said misuse of a multi-track system is “a very simple thing to detect” and that existing layers of oversight should catch it.

“But when each party in those layers fails — when the charter authority fails to provide adequate oversight, when the independent auditor fails to do their job accurately, when county superintendents on the (attendance) issue just sign off without any due diligence — that lack of follow-through destroys those layers of protection for the taxpayers,” Fine said.

The San Diego County Office of Education does not review schools’ attendance reporting by calendar track, said county Deputy Superintendent Michael Simonson.

“That’s a conversation we also need to have with the districts about what information they could or should be requesting from the charters to verify,” he said.

On Friday, the county superintendent recommended to Cabrillo Point Academy that it work with an auditor to see about submitting a corrected attendance report for past years, ensure its internal controls and record-keeping practices are solid and review its Track A attendance reports. Simonson will present about the audit to Pacific Coast Academy at its board meeting Thursday.

Dehesa School District, which authorizes Cabrillo Point Academy and Pacific Coast Academy and used to authorize A3 schools, began conducting annual oversight reviews of its charter schools in 2019.

It contracts with the Small School Districts’ Association to produce an annual oversight report, hundreds of pages long, of its five charter schools that checks the schools’ governance, educational program, finances, operations and more.

Dehesa Superintendent Bradley Johnson, who has helped spearhead these new oversight efforts, took the helm of the district in 2020 after former leader Nancy Hauer was indicted in the A3 case.

“It is one of the most comprehensive reviews a district has implemented since A3 and beyond what the state mandates,” Johnson said of his district’s oversight in an email.

Purpose

To provide a forum for School Education Directors to:

• meet to discuss and directly contribute to education policy development for taught programmes;
• share experiences and best practice;
• share ideas and discuss common challenges across school and faculty boundaries.

The School Education Director Role Description is here.

Membership 

Associate Pro Vice-Chancellor - Learning and Teaching (Chair) - Dr Mark Allinson
School Education Directors (Taught Programmes)
FPIIO rep - Bex Coveney
Academic Quality Manager, AQPO - Sam Jones
Quality Support Officer, AQPO (Secretary) - Melissa Bevan

The Pro Vice-Chancellor for Education and Students and the Faculty Education Directors (UG and PGT) are invited to attend meetings if they wish.

Meeting Dates 2023-24

• Wednesday 27 September 2023
• Wednesday 25 October 2023
• Wednesday 6 December 2023
• Wednesday 24 January 2024
• Wednesday 13 March 2024
• Wednesday 1 May 2024
• Wednesday 12 June 2024

Mode of Operation

The Network will normally meet at least five times per year.

We welcome suggestions from School Education Directors or other University colleagues for discussion items or presentations on courses of common interest; please email Melissa Bevan (melissa.bevan@bristol.ac.uk). 

Notes of Meetings and circulated papers (Members only)

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Get ready for an extraordinary musical journey at the Jazz Education Network (JEN) conference from January 3-6, where jazz enthusiasts, beginners, and experts converge for an unparalleled experience. A unique blend of a music festival, networking hub, and educational powerhouse, the annual conference draws thousands from across the globe. The JEN conference offers a diverse array of events, including sessions and clinics tailored to every jazz interest imaginable – from education and research to technology, industry insights, music business, improvisation, composition, engaging panel discussions and more.

You can also dive into the JENerations Jazz Festival, running concurrently with the Annual JEN Conference, where schools, community ensembles and performing groups showcase their talents. Launched in 2012, the JENerations Jazz Festival has expanded each year, now featuring three venues and involving over 800 musicians of all ages. You can explore other program performances like the Young Composer Showcase, Sisters in Jazz Collegiate Combo, and more.

For those seeking unforgettable jazz performances, the conference boasts day-long showcases and evening concerts that alone justify the registration cost. Don’t miss this once-in-a-lifetime experience that celebrates the artistry, education, and camaraderie of jazz. Learn more about the JEN conference and view the complete schedule of events here.