Controller: Budget bill cracks down on education fraud

"Every dollar intended for California's students should reach the classroom and not lost to fraud, waste, or abuse,” Controller Malia Cohen said in a press release. “Public trust depends on strong financial oversight, and this legislation gives California better tools to strengthen accountability, improve transparency, and detect fraud before it diverts resources from the students who need them most.”

Cohen and other employees of the State Controller’s Office did not make themselves available for an interview with The Center Square on Friday.

The Center Square also reached out to Newsom’s press office on Thursday afternoon for additional comments about the bill and California’s efforts to root out fraud in the state’s charter schools.

“The Controller’s release speaks for itself,” Marissa Saldivar, assistant deputy director of communications for Newsom’s press office, wrote via email to The Center Square on Friday.

The legislation was praised by Assemblymember Nick Schultz, D-Burbank and a member of the Assembly Budget Committee.

“The reforms included in AB 126 strengthen oversight and transparency for our education funding. It’s a win for communities and students across California,” Schultz told The Center Square in an email. 

Others on the Assembly budget and education committees did not respond Friday to The Center Square's request for comment.

According to the press release, in 2019, the San Diego County District Attorney’s Office prosecuted 11 people who committed fraud by falsely enrolling students in the Academics Arts and Action Education network, which was made up of 19 individual charter schools. The 11 who were prosecuted were also charged with manipulating enrollment figures and ultimately funneling $400 million into companies controlled by the people who ran the network.

In response to that fraud, San Diego Superior Court Judge Robert Longstreth signed a court order in 2023 approving the creation of the Multi-Agency Charter School Audits Task Force, and designating the state controller as the task force chair. The newly formed group was tasked with auditing California charter schools and developing guidelines for charter schools and local and state educational agencies to identify misconduct or financial issues.

“We are encouraged to see so many reforms being implemented as a result of the charter school fraud case our office investigated and prosecuted," Summer Stephan, the San Diego County district attorney, told The Center Square via email on Friday. "These changes represent important progress in protecting taxpayer dollars and strengthening oversight of public education funds. We remain committed to ensuring that every dollar intended to educate children is used for that purpose and that those entrusted with public funds are held accountable.”