Caprice Young

* UPDATED

Magnolia Public Schools, which has fought bitterly with the LA Unified school board to keep several of its schools open, has turned to an old LAUSD hand to take over its leadership.

Caprice Young, a long-time education reform advocate and former school board president has been named Magnolia’s new Chief Executive Officer.

Young confirmed her appointment in a text message to LA School Report.

Young served four years on the LA Unified school board, from 1999 to 2003, and worked closely with then superintendent Roy Romer in helping the district make gains in student achievement and in launching an ambitious program of school facilities renewal. She served as board president in her last two years.

During her first year on the board, Young and her colleagues launched a complete overhaul of the district’s organizational structure.

Young plans to continuing working part-time through April in her current post as President of the National Charter Resource Center. Then, she intends to start full-time with Magnolia, which operates 11 schools across the state. Many of them have been subject to recent scrutiny over management practices.

But her resume could serve as a chronology of the education reform movement, making her an ideal choice to lead the group. After leaving the district, she founded the California Charter Schools Association and served as its first president. It has grown to become one of nation’s most powerful state associations and accelerated the growth of charter schools throughout the state.

Following that, she moved into the business of technology in education, reformists’ cause du jour these days.

Young’s name was first floated by Magnolia consultants and advisors as a possible candidate for the position in mid-December, Magnolia spokesman Mike MeCey told LA School Report.

“She is very dynamic and what she’s done is very impressive,” MeCey said, adding that Young’s history with the district will be a boon for the charter school group.

“Her experience can only improve communications between Magnolia and the board,” he said.

In late June, the school board moved to close two of the organization’s eight charter schools in LA Unified — Magnolia Science Academy 6 in Palms and Magnolia Science Academy 7 in Van Nuys — for fiscal mismanagement and a slew of other accounting irregularities. Magnolia took LA Unified to court, and a judge overturned the board’s decision ruling that the two schools could remain open under certain conditions.

One stipulated that the parent company could no longer do business for the two schools with its primary educational service vendor, a non-profit called Accord Institute for Education Research. It had to maintain a 5 percent cash reserve for each of its charter schools and cannot engage in deficit spending; and Magnolia had to provide the district with monthly updates of the the charter schools’ profit and loss statements, balance sheets, cash flow and bank statements, check registers, and expense reports.

Magnolia complied but that didn’t restore the district’s faith in the groups accounting practices.

In November, the board voted unanimously to deny the renewal for Magnolia Science Academy Bell. Members rejected the school’s five-year renewal application based on a report by the district Inspector General that found the charter management group is “fiscally insolvent.”

Jerry Simmons, a lawyer representing the school, pleaded with the board to keep it open. “As of this morning, Magnolia has $9,462,000 in its bank account,” he contended.

The closure of the South LA school at the end of the school year brings the number of Magnolia campuses under the purview of LA Unified to seven.

*Clarifies timing of her move to Magnolia.

Magnolia Science Academy 6 charter school

* UPDATED

LA Unified today finally released a report that confirming that two charter schools, Magnolia Science Academy 6 and Magnolia Science Academy 7, were operating with insufficient funds and for years and have been financially mismanaged.

The 78-page report, prepared by an outside firm for the district’s Office of the Inspector General, concludes that the Magnolia schools in Palms and Reseda are financially insolvent, spending more money than they’re bringing in.

Other accounting irregularities found on the OIG report included loans between schools, payment of immigration fees for unspecified persons, the possible use of school funds for a European field trip, and what seems like an unsustainable over-payment to a charter management organization providing services that are the purview of the charter group.

The review, which was completed in mid-June but withheld by the district, does not examine the Magnolia schools’ parent company, Magnolia Educational and Research Foundation, known as MERF, beyond June 2014 despite assertions by Superintendent John Deasy that the Inspector General would be looking into all eight of the district’s Magnolia schools.

The district’s Charter School Division based its denial of the two schools’ charter renewal petition on the findings of the report as presented to the school board over the summer. But the revocation of the charter was overturned in court and the schools were allowed to reopen this year. A court hearing is scheduled for January to determine whether they can continue to operate.

Officials from the Magnolia schools said they were heartened by the release of the report, saying that the detailed findings, now public, would help them mount a stronger legal case against the district in arguing to keep the schools open.

Kim Onisko, MERF’s accountant, sounded relieved after reviewing the executive summary. “Getting the numbers lets us trace back to where their figures came from to see if they’re right or wrong,” he told LA School Report.

“Basically the discussion is exactly the same as it was in June, it’s just we have more meat in this report so we can actually give a better response than we did to the prior report which didn’t tell us very much.”

What MERF officials contended then — and now — is that they operate as a company, not as individual entities, a difference that might show deficits at individual schools but not with the company.

“There is no inter-company borrowing because Magnolia operates as one entity, under one tax number. As such, you can not make a loan to yourself,” Onisko explained. “You can transfer money between departments, but there are no loans because you can’t contract with yourself.”

Onisko also denied the use of public money to fund a student field trip to Europe in 2011.

LA Unified officials declined to comment citing pending litigation.

Previous Posts: Magnolia schools remain open but relationship with Accord changes; Magnolia Charter troubles in LAUSD highlight larger concerns; Fiscal mismanagement’ cited in closing 2 Magnolia charters

* Clarifies that the report released yesterday was completed in June.