2024-106 Highlands Community Charter and Technical Schools
Lax Oversight Allowed Highlands to Inappropriately Receive More Than $180 Million in K-12 Funding
Published: June 24, 2025
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
Recommendations to Legislature
Recommendation 1
To ensure that students receive quality education through smaller class sizes, the Legislature should consider establishing a maximum allowable student-to-teacher ratio for classroom-based adult-serving charter schools and establish a fiscal penalty for schools that exceed this maximum allowable student-to-teacher ratio.
Recommendation 2
To ensure that students in adult-serving charter schools progress toward a high school diploma, the Legislature should amend state law to require charter schools that provide instruction in exclusive partnership with a WIOA organization to be subject to the requirement that its students make satisfactory progress toward a high school diploma.
Recommendation 3
To ensure transparency about student assessment outcomes, the Legislature should expand state law to require charter high schools that do not offer 11th grade to administer the CAASPP English and Math assessments to students in the 12th grade.
Recommendation 4
To ensure that chartering authorities perform adequate oversight, the Legislature should clarify whether chartering authorities must conduct site visits to each school site location each year for multisite charter schools.
Recommendation 5
To ensure that chartering authorities are conducting the oversight necessary to ensure that charter schools they authorize comply with state law, including all conditions of K-12 funding, the Legislature should consider giving CDE the authority to establish a process to monitor chartering authorities, require corrective action for identified oversight deficiencies, and levy financial sanctions against chartering authorities that fail to conduct necessary oversight.
Recommendation 6
To ensure that chartering authorities charge facilities fees as the Legislature intended, the Legislature should specify in state law whether chartering authorities are allowed to charge up to 3 percent in oversight fees for revenue generated from site locations wherein the chartering authority does not provide the charter school with substantially rent-free facilities.
Recommendation 7
To ensure that charter schools appropriately address findings in extraordinary audits, the Legislature should consider requiring county offices of education to determine whether the findings are remedied within a reasonable amount of time. The Legislature should also require the county office of education to notify the chartering authority and CDE of each audit finding that it determines is unremedied in order to facilitate enforcement activities, such as the issuance of a notice of violation by the chartering authority or any necessary adjustments to apportionment by CDE.
Recommendation 8
To ensure chartering authorities are not placing themselves at financial risk, the Legislature should consider explicitly directing county offices of education, as part of their fiscal oversight responsibilities, to review how chartering authorities that authorize charter schools within their county fulfill their charter school oversight responsibilities.
Recommendation 9
To ensure that charter schools address misassignments and prevent uncredentialed teachers from negatively impacting students’ quality of education, the Legislature should consider requiring CDE, in collaboration with CTC, to assess fiscal penalties to chartering authorities when the charter schools they authorize repeatedly or consistently fail to address teacher misassignments.
Recommendations to Highlands Community Charter and Technical Schools
Recommendation 10
To ensure that it is eligible to receive K-12 funding for its classroom-based instruction, Highlands should, by December 2025, implement a system that allows it to track how long its students are actually attending its classroom-based instruction.
Agency response status:
Fully implemented
Date of implementation:
Oct. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On August 14, 2025, the first day of the 2025-2026 school year, HCCS implemented two five-period bell schedules, one for the morning and one for the evening. These five-period schedules provide greater structure throughout the school day and ensure accurate attendance tracking. Teachers are required to take attendance for each period throughout the day. HCCS uses its Student Information System (SIS), PowerSchool, to track attendance for each period in order to verify the length of time students spend in class receiving instruction at each school site.
Public Reasoning Behind State Auditor 60-Day Assessment
Although Highlands developed a policy for tracking whether students are attending each period, its formal operating procedure has not yet been approved by Highlands’ board. Full implementation of this recommendation will require an approved and implemented operating procedure.
6-Month Agency Response
On August 14, 2025, the first day of the 2025-2026 school year, HCCS implemented two five-period bell schedules, one for the morning and one for the evening. These five-period schedules provide greater structure throughout the school day and ensure accurate attendance tracking. Teachers are required to take attendance for each period throughout the day. HCCS uses its Student Information System (SIS), PowerSchool, to track attendance for each period in order to verify the length of time students spend in class receiving instruction at each school site. These attendance procedures are documented in the HCCS and CICA Attendance Standard Operating Procedures, which were board-approved on November 6, 2025. As outlined in the HCCS Attendance SOP on page 34, the Attendance Technician Lead monitors and tracks teachers’ daily attendance for each period to ensure teachers are entering attendance for all periods and staying in compliance with bell schedules. HCCS will continue tracking this and will provide it to the CSA from January through June 2026 in the one-year report.
Public Reasoning Behind State Auditor 6-Month Assessment
Highlands provided attendance procedures that require students to sign in and out for each period under the supervision of a teacher or appropriate staff. The procedures also specify that attendance staff will collect binders containing rosters that students used to sign in and out.
Recommendation 11
To ensure that it is eligible to receive K-12 funding for its classroom-based instruction, Highlands should, by December 2025, establish a policy to structure its classroom-based courses in such a way that it provides classroom-based instruction for the duration of the class day as indicated in its bell schedules and requires its students to attend for the duration of the class day.
Agency response status:
Fully implemented
Date of implementation:
Aug. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On August 14, 2025, HCCS implemented a master schedule with classroom-based instruction mandated for each of the five (5) periods. The expectation for students to stay for the whole day is clearly communicated in several ways. New Student Orientation for HCCS took place in August 2025 prior to the start of the school year, where students were given their schedules and student expectations. The 2025-2026 Student Handbook outlines attendance expectations on page 5. Consistent failure to adhere to attendance requirements will result in disenrollment, as detailed in the HCCS Attendance SOP and in Board Policies 5111.5 Disenrollment and Involuntary Removal, 5113.1 Attendance Enforcement, and 5120 Satisfactory Academic Progress. HCCS is also drafting a comprehensive attendance SOP detailing expectations for student attendance. The HCCS Attendance SOP will be Board-approved and fully implemented by December 2025.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands provided board policies to support that it requires students to attend for the duration of the day, but its operating procedure requiring teachers to provide classroom-based instruction for the duration of the class day has not yet been approved by Highlands’ board. An approved policy to structure its classroom-based courses in this way will be required for full implementation of this recommendation.
6-Month Agency Response
On August 14, 2025, HCCS implemented a master schedule with classroom-based instruction mandated for each of the five periods. The expectation for students to stay for the whole day is clearly communicated in several ways. HCCS New Student Orientation took place in August 2025, prior to the start of the school year, during which students were given their schedules and student expectations. The 2025-2026 Student Handbook outlines attendance expectations on page 5. Consistent failure to adhere to attendance requirements will result in disenrollment, as detailed in the HCCS Attendance SOP and in Board Policies 5111.5 Disenrollment and Involuntary Removal, 5113.1 Attendance Enforcement, and 5120 Satisfactory Academic Progress. HCCS drafted a comprehensive Attendance SOP detailing expectations for student attendance. On page 32 of the Attendance SOP, it specifies that teachers are providing direct instruction for all periods each day. The HCCS Attendance SOP was board-approved on November 6, 2025. HCCS teachers are providing classroom-based instruction for all periods throughout the day, as written in the SOP. This is monitored by the Director of Instruction and Professional Learning as outlined, and additional evidence will be provided from January to June 2026.
Recommendation 12
To avoid misreporting hours of attendance for those students who may rely on CalWORKs benefits, Highlands should, by September 2025, ensure that its policies and procedures for reporting student participation to county offices of human assistance for purposes of determining eligibility for assistance programs allow for and require accurate reporting.
Agency response status:
Fully implemented
Date of implementation:
Sept. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
Beginning September 10, 2025, HCCS will begin reporting student attendance hours to public assistance agencies for the 2025-2026 school year. Aligned with the newly drafted HCCS SOP Reporting to a Public Assistance Agency, HCCS will only report student attendance hours for which students were actively present in class, as verified through PowerSchool, its SIS. The maximum participation for each student each day is based on a five-period bell schedule for either the morning or evening. For the morning regular bell schedule, the maximum is 336 minutes per day or 5.5 hours. For the evening regular bell schedule, the maximum is 336 minutes or 5.5 hours per day. HCCS students will no longer receive attendance credit for homework. HCCS has met with representatives from Sacramento, Yolo, and Placer counties. Evidence of compliance with this policy will be available as the first reporting for the 2025-2026 school year will occur on September 10, 2025. In the six-month update, HCCS will supply all DHA reporting documents for September, October, November, and December as evidence of compliance.
Public Reasoning Behind State Auditor 60-Day Assessment
Although Highlands provided a draft operating procedure that allows for and requires accurate reporting to county offices of human assistance, the operating procedure has not yet been approved by Highlands’ board. Full implementation of this recommendation will require an approved and implemented operating procedure.
6-Month Agency Response
Beginning September 10, 2025, HCCS and CICA began reporting student attendance hours to public assistance agencies for the 2025-2026 school year for students who rely on CalWORKS benefits. On December 11, 2025, the HCCTS Board of Directors approved an HCCS and CICA SOP Reporting Student Hours to Public Assistance Agencies.
As outlined in the SOPs, HCCS and CICA will only report student attendance hours for which students were actively present in class or who completed sufficient work to receive independent study attendance as defined in the Attendance SOPs. The attendance hours reported to public assistance agencies are derived from official PowerSchool attendance records. The maximum participation for seat-based students is based on the five-period bell schedule. HCCS students do not receive attendance credit for homework. HCCTS has met with representatives from Sacramento, Yolo, and Placer counties to ensure attendance reporting practices align with agency expectations. In September 2025, HCCS and CICA completed individual attendance reports for each student using the updated process above. Beginning in October, HCCS and CICA began generating monthly reports. HCCS and CICA will provide all Department of Human Assistance (DHA) reporting documents for students at HCCS and CICA who receive CalWORKS benefits for October and November 2025, email correspondence between HCCTS and DHA offices, and the board-approved SOP as evidence of implementation. Student attendance for DHA will be reported in mid-January, therefore, December reports are not yet available. December 2025 to May 2026 will be provided in June 2026.
Recommendation 13
To ensure that it reports accurate attendance information, Highlands should, by December 2025, create and implement written policies and procedures for how it reports ADA to CDE for funding, including details about which days should and should not be excluded.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
In the 2024-2025 school year, HCCTS started drafting detailed attendance policies and procedures to ensure clarity for students, teachers, community partners, our authorizer, and state agencies. These Attendance SOPs for HCCS and CICA will be presented to the HCCTS board in the Fall of 2025-2026. Policies already implemented, and detailed in the SOP, include the use of a single instructional track, elements of the academic calendar, and the use of a 20-day attendance calendar. The SOP also defines the conditions to be met for generating classroom-based attendance, including the requirement that students attend in person under the supervision of a credentialed teacher. For classroom-based and independent study programs, it is clearly stipulated that ADA can only be generated on scheduled instructional days per the academic calendar, and that students claimed for apportionment must reside within the school’s service area.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands provided draft standard operating procedures with ADA reporting information; however, the final approved and implemented policies and procedures should provide direction for details about how it reports ADA to CDE for funding, including details about which days should and should not be included. Page 16 of our report discusses misreported and unsupported attendance, including that Highlands inappropriately omitted periods of lower attendance from students’ ADA, and full implementation of this recommendation will require policies with details that will ensure the attendance Highlands reports to CDE for funding is accurate and appropriate.
6-Month Agency Response
Beginning August 14, 2025, HCCS and CICA implemented a single attendance track. This creates clarity as to which dates are included when HCCS and CICA report ADA. This reflects the commitment made by HCCTS to implement a single track in January 2025. In order to codify in policy the practice already in operation, HCCTS worked with Charter Impact to draft a new policy on ADA reporting. On December 22, 2025, the HCCTS Board of Directors approved the newly drafted policy, BP 5113.2 ADA Reporting. This policy outlines procedures for how HCCS and CICA report average daily attendance (ADA) to the California Department of Education, including which days should and should not be excluded.
Recommendation 14
To ensure that it reports accurate attendance information, Highlands should, by December 2025, create and implement written policies and procedures that require maintaining documentation such as sign-in sheets that support the attendance it records in its attendance reporting system for HCCS.
Agency response status:
Fully implemented
Date of implementation:
Aug. 2025
State Auditor assessment status:
Fully Implemented
60-Day Agency Response
In January 2025, HCCS mandated daily paper-based attendance sheets as a secondary verification for daily attendance in PowerSchool. Since then, every teacher in every classroom-based class is required to have a paper sign in sheet for all students in each period. These paper-based attendance records are stored and maintained for three years. These requirements are detailed in the draft of the HCCS Attendance SOP. HCCS teachers are required to use student rosters generated by PowerSchool for paper-based attendance documentation. Procedures for creating compliant attendance sheets are described in the HCCS Attendance SOP. Teachers are required to certify that each daily attendance roster is accurate. Procedures for corrections to attendance records are detailed in the HCCS Attendance SOP. Teachers are instructed to retain records in supplied attendance binders in a readily accessible manner. The retention of attendance records for a minimum of three years is mandated by Board Policy 3581: Data Retention and Record Management. All HCCS teachers were trained on these new policies and procedures during the 2024-2025 school year and during August professional development training days for the 2025-2026 school year. An attendance team has been established to pull attendance reports daily.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands’ policies and procedures seem to adequately address the recommendation, but full implementation will require that Highlands formally approve and implement the policies and procedures.
6-Month Agency Response
In prior years at HCCS, teachers were instructed to have and keep paper-based attendance as a back-up to their electronic PowerSchool attendance records and many teachers kept paper-based attendance records. Following the California State Audit recommendations, HCCS began enforcing a stricter paper-based attendance process starting in January 2025. The new process required teachers to show evidence with weekly verifications of these paper-based records to ensure all teachers were fully compliant. In May 2025, HCCS began drafting updated Attendance SOPs based on feedback from TRUSD and the CSA recommendations. In Spring 2025, HCCS established an attendance team to support the new process. In August 2025, during all-staff professional development training prior to the start of the 2025-2026 school year, teachers were trained on the updated processes. In October 2025, HCCS teachers were retrained on attendance procedures in alignment with the HCCS Attendance SOPs. The HCCS Attendance SOPs were board-approved on November 6, 2025. As outlined in the HCCS Attendance SOP, HCCS teachers are required to use student rosters generated by PowerSchool for paper-based attendance documentation. Procedures for creating compliant attendance sheets are described in the HCCS Attendance SOP. Procedures for implementing, maintaining, and storing written sign-in sheets are detailed on pages 18-25. HCCS teachers are required to certify that each daily attendance roster is accurate. Procedures for corrections to attendance records are detailed in the HCCS Attendance SOP. Teachers are instructed to retain records in attendance binders in a readily accessible manner. The retention of attendance records for a minimum of three years is mandated by Board Policy 3581: Data Retention and Record Management.
Recommendation 15
To ensure that it reports accurate attendance information, Highlands should, by December 2025, define what constitutes sufficient work products from CICA students and implement a policy ensuring that it only reports attendance for students who provide documentation for that work.
Agency response status:
Fully implemented
Date of implementation:
Aug. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
Implemented in the 2025-2026 school year, CICA now requires all student work samples to include the date completed, student name, and a grade or points assigned. CICA attendance procedures require that work samples be representative of work completed during the learning period. These policies will be detailed in the CICA Attendance SOP, currently in draft form, to be approved by December 2025. Board Policy 6158.2 mandates that content must be aligned to grade-level standards substantially equivalent to in-person instruction. In order to ensure all work samples and attendance are accurate and compliant, CICA has hired a compliance team, including a Compliance Coordinator who oversees this process and ensures compliance with education code standards and HCCTS board policies.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands has partially implemented this recommendation by drafting operating procedures for CICA attendance and an independent study board policy for CICA. Full implementation of this recommendation will require an approved and implemented operating procedure. Further, in order for the recommendation to be fully implemented, the policies will need to include requirements similar to those in Highlands’ response to this recommendation, that CICA now requires all student work samples to include the date completed, student name, and a grade or points assigned. In addition, the policies will need to include a procedure ensuring that Highlands will only report attendance for students who provide documentation for that work.
6-Month Agency Response
At the start of the 2025-2026 school year, CICA began implementing recommendations from the CSA to define sufficient work products and meet instructional minutes requirements for long-term independent study students. CICA determined, through the CICA Independent Study Compliance Team, with the support of legal counsel, that the best way to track this was for teachers to track all students’ assignments through assigned work records verified by each teacher for all students. On November 6, 2025, the HCCTS Board approved CICA’s Attendance SOPs, which require all independent study student work samples to include the date completed, student name, and a grade or points assigned. CICA will only report attendance for students who provide documentation for that work. These details can be found on page 10, and the conditions under which IS attendance can be generated are found on pages 10-12. CICA attendance procedures require that work samples be representative of work completed during the learning period. As outlined in the SOP, CICA will only report attendance for students who have completed appropriate work based on the time-value of work completed and verified through the assigned work record. Board Policy 6158.2 mandates that content must be aligned to grade-level standards, and substantially equivalent to in-person instruction. In order to ensure all work samples and attendance are accurate and compliant, CICA has appointed a compliance team, including hiring a Compliance Coordinator who oversees this process and ensures compliance with Education Code standards and HCCTS board policies. CICA maintains assigned work records for all students and will provide them to the CSA upon request.
Recommendation 16
To ensure that Highlands spends K-12 funding appropriately, Highlands should, by December 2025, implement policies and procedures that outline the allowable uses of public funding, criteria for assessing and selecting vendors, and a purchasing process that includes separation of duties and requirements for multiple approvals.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Partially implemented
60-Day Agency Response
HCCTS has created a number of board policies to govern the use of public funds. Board Policy 3100 establishes a timeline for a transparent budget development process with defined roles for the Board of Directors, Executive Director, and Chief Business Official. Board Policy 3310 establishes criteria for selecting and assessing vendors, segregation of duties, and thresholds for purchases requiring Board approval for all purchases over $35,000. Additional board policies, including 3350 BP Travel and Expense Reimbursement, 3360 BP Gifts, Grants, and Bequests, and 3365 BP Distribution of Promotional Items, establish guardrails for the use of public funds. Board Policy 3410 establishes rules for the allowability of costs for federally funded programs.
In order to maintain transparency, HCCTS’ new Executive Director has instituted a policy of presenting all contracts for Board approval and providing monthly fiscal updates to the Board.
HCCTS is continuing to update its fiscal policies and procedures. It will present a set of updated fiscal policies and procedures, including board policies and administrative regulations, for Board approval on September 4, 2025.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands provided a number of board policies that address the components of our recommendation but the board has not yet approved its fiscal policies and procedures. Full implementation of this recommendation will require approved and implemented policies.
6-Month Agency Response
HCCS has developed and updated multiple fiscal policies and procedures in order to ensure the responsible spending of public funds, which were approved on the following dates:
January 9, 2025- BP 3100 Budget Development and Oversight
February 6, 2025 BP 3365 Distribution of Promotional Items
February 6, 2025- BP 3360 Gifts, Grants, and Bequests
September 4, 2025- BP 3310 Purchasing and Vendor Selection approval
September 4, 2025- Fiscal Policies and Procedures Manual
November 6, 2025- BP 3350 Travel and Expense Reimbursement
December 22, 2025- 3310 BP Purchasing and Vendor Selection (Revised)
December 22, 2025- Fiscal Policies and Procedures Manual (Revised)
On November 6, 2025, BP 3310 was updated to address standardized contracts and language: “All vendor engagements must use HCCTS pre-approved board templates; if a selected vendor refuses, the contract language must be reviewed by legal counsel and by the Executive Director or designee prior to execution. This applies to all contracts and agreements for consulting services and leases.”
In order to ensure multiple layers of approval for all contracts, BP 3310: Purchasing and Vendor Selection was updated on December 22, 2025, along with the Fiscal Policies and Procedures Manual, with the following language:
“All independent contractor agreements must be presented and approved by the HCCTS Board of Directors, regardless of value. This must take place prior to contracts being implemented and prior to payments being made to contractors.”
Public Reasoning Behind State Auditor 6-Month Assessment
Highlands has implemented policies and procedures that seem to outline criteria for selecting vendors and a purchasing process that includes separation of duties to address this recommendation, but it will still need to implement policies and procedures that outline the allowable uses of public funding at Highlands to have fully implemented this recommendation.
Recommendation 17
To ensure that it does not execute inappropriate or wasteful contracts, Highlands should, by December 2025, implement comprehensive contracting policies and procedures that require multiple approvals, standardized contracting language, and proof of delivery of services.
Agency response status:
Not fully implemented
Date of implementation:
Jan. 2026
State Auditor assessment status:
Partially implemented
60-Day Agency Response
In the 2024-2025 school year, HCCTS drafted a new Independent Contractor Template and MOU Template with standardized contracting language and requirements for proof of delivery of services. HCCTS Board Policy 3310 requires departments to obtain three competitive quotes for purchases over $100,000, which will be reviewed by the Fiscal Department. As of August 2025, all contracts for HCCTS are presented to the Board regardless of value.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands provided a board policy and contract template that partially implemented this recommendation. To fully implement this recommendation, Highlands’ policies and procedures should require multiple approvals, standardized contracting language, and proof of delivery of services.
6-Month Agency Response
On December 22, 2025, HCCTS Board of Directors approved updates to BP 3310: Purchasing and Vendor Selection and updated HCCTS Fiscal Policies to reflect the following changes: To address multiple approvals: “All independent contractor agreements must be presented and approved by the HCCTS Board of Directors, regardless of value. This must take place prior to contracts being implemented and prior to payments being made to contractors.” To address standardized contracts and language: “All vendor engagements must use HCCTS pre-approved board templates; if a selected vendor refuses, the contract language must be reviewed by legal counsel and by the Executive Director or designee prior to execution. This applies to all contracts and agreements for consulting services and leases.” HCCTS is in the process of drafting an Administrative Regulation to outline how to track the delivery of services for all vendor contracts.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation of this recommendation will require implemented contracting policies and procedures that require multiple approvals and the method for tracking proof of delivery of services.
Recommendation 18
To ensure that it does not violate state laws prohibiting conflicts of interest, Highlands should, by December 2025, implement a policy to provide annual conflict of interest training to all designated staff members and implement procedures to prevent employees from entering into contracts in which they have a financial interest, such as with a spouse.
Agency response status:
Not fully implemented
Date of implementation:
Jan. 2026
State Auditor assessment status:
Partially implemented
60-Day Agency Response
HCCTS 9270 BP Conflict of Interest Code requires that all Board members and all other employees involved in decision-making that may have an impact on financial interests participate in financial disclosures. All employees designated according to the Conflict of Interest Code receive annual training on their disclosure category and the appropriate filing of Form 700. Form 700 training was implemented on March 15, 2024, with the Board of Directors and all supervisory employees and will continue once per year.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands’ response does not indicate that it has implemented a policy to provide annual conflict of interest training to all designated staff members or to implement procedures to prevent employees from entering into contracts in which they have a financial interest. BP 9270 was approved in 2013 and was therefore ineffective in preventing the potential conflicts of interest we identified, described on page 23 of our report. Further, Highlands provided evidence that its board received training in March of 2024, more than a year before our report was released, but no evidence that any staff attended the training, or that the training occurred in 2025. Full implementation of this recommendation will require implementation of new and expanded policies and procedures as described in the recommendation.
6-Month Agency Response
On December 22, 2025, HCCTS Board of Directors approved updates to BP 3310: Purchasing and Vendor Selection and updated HCCTS Fiscal Policies. To address conflict of interest training: “All purchase approvers must disclose any actual or potential conflicts of interest (financial, familial, or personal) related to procurement decisions; they will participate in annual training conducted by a third-party expert and recuse themselves from affected bids or approvals, with the action documented in the procurement record.” HCCTS 9270 BP: Conflict of Interest Code requires that all Board members and all other employees involved in decision-making that may have an impact on financial interests participate in financial disclosures. All employees designated according to the Conflict of Interest Code will receive annual training on their disclosure category and the appropriate filing of Form 700. All staff who are approvers will complete annual training by January 30, 2026, and then each year thereafter. We have also incorporated the conflict of interest training into our onboarding process for new employees to ensure that they are trained within ninety (90) days of commencing employment. All training certificates completed in the 2025-2026 school year will be provided to the CSA as evidence by June 2026. On July 7, 2025, long-time HCCTS Board Member and Treasurer of the board, Sonja Cameron, was removed due to a conflict of interest violation. This action demonstrates a high level of commitment to improving ethics and removing conflicts of interest by the new Executive Director, Jonathan Raymond. In order to ensure proper implementation of its conflict of interest policies, HCCTS requires all vendor contracts to be approved by the HCCTS Board and is developing a contracting standard operating procedure outlining the necessary steps to bring any contract before the board, which will be provided by January 2026.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation of this recommendation will require Highlands to have implemented procedures to prevent employees from entering into contracts in which they have a financial interest, such as with a spouse.
Recommendation 19
To ensure transparency in its purchasing practices, Highlands should, by December 2025, revise its policies to require that all purchases and contracts over $115,000 be approved by the board. Highlands may adjust the amount annually in accordance with the state superintendent’s inflation-adjusted bid threshold amount.
Agency response status:
Fully implemented
Date of implementation:
Aug. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On June 5, 2025, Highlands approved Board Policy 3310, which requires Board approval for all purchases and contracts over $100,000. However, to improve fiscal oversight and improve transparency, HCCTS is revising this spending limit and at the September 4, 2025 board meeting the updated 3310 is being recommended to change spending limits from $100,000 to $35,000. Furthermore, starting August 2025, it is the practice of the new Executive Director to bring all contracts before the Board regardless of value.
Recommendation 20
To ensure that it hires employees with proper qualifications for their roles, Highlands should, by December 2025, implement policies and procedures that formalize its hiring process, including deciding on a position’s minimum qualifications before hiring begins, maintaining documentation of each step of the process for each candidate, standardizing the creation of job descriptions, implementing recruitment practices that include external and internal applicants, and standardizing the interview and job offer process.
Agency response status:
Not fully implemented
Date of implementation:
Jan. 2026
State Auditor assessment status:
Partially implemented
60-Day Agency Response
Board Policy 4111 establishes formalized hiring practices including posting of all positions externally and internally, a multi-step interview process, and standardized interview questions with rubrics. In compliance with 4111 BP, Human Resources at Highlands has begun prescreening applicants through Edjoin, requiring that all applicants supply evidence of meeting requirements for each position.
In addition, Administrative Regulation 4111.1 will be presented to the HCCTS Board for authorization on September 4, 2025. This regulation establishes a standardized system for requesting, reviewing, and approving staffing positions across HCCS and CICA. These procedures ensure that all staffing decisions align with organizational priorities, available resources, and compliance requirements.
HCCTS has hired a Chief Operations Officer to ensure policies and procedures are in place and that all operations are in compliance. To assist with developing and implementing hiring policies and procedures, HCCTS is hiring an independent contractor to ensure a comprehensive overhaul of all policies and procedures is fully implemented by January 2026.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands’ board policy addresses some components of our recommendation. However, the policies and procedures need to include maintaining documentation of each step of the process for each candidate and standardizing the creation of job descriptions.
6-Month Agency Response
On September 18, 2025, the HCCTS Board of Directors approved updates to Board Policy 4111 to formalize hiring practices across the organization. These updates established requirements for posting all positions both internally and externally, implementing a multi-step interview process, and using standardized interview questions. In November 2025, HCCTS developed a minimum qualification matrix for all certificated employees. This was board approved on December 11, 2025. Beginning in September 2025, the Human Resources Department pre-screened all applicants in Edjoin to ensure they meet minimum qualifications before advancing to the interview stage, in accordance with BP 4111. In alignment with these policy updates, HCCTS has developed standardized templates for creating new job descriptions and revising existing positions. The HR Department is in the process of developing written procedures for developing and implementing templates to be provided by January 2026. HCCTS has also implemented a standardized interview process along with a consistent system for collecting and organizing documentation at each stage of the hiring process. HCCTS will continue to retain documentation of all steps of the hiring process, and written procedures requiring this documentation are under development to be provided by January 2026. To further ensure that all candidates meet required qualifications, HCCTS has established a job description matrix outlining minimum qualifications for certificated positions and will develop and implement a comparable matrix for classified positions in January 2026. All previously board approved job descriptions are in the process of being updated to reflect the new matrix for education and experience requirements that were approved by the onboard on December 11, 2025. All HCCTS job postings are posted on Edjoin and accessible to external and internal applicants for a minimum of 14 days, however in most cases positions are posted until they are filled.
Public Reasoning Behind State Auditor 6-Month Assessment
Highlands has taken steps to implement the recommendation with the updates to board policy 4111 and its proposed procedures. Full implementation will require board approval of the procedures that include deciding on a position’s minimum qualifications before hiring begins, standardizing the creation of job descriptions, and maintaining documentation of each step of the process for each candidate. Highlands will also need to show that it has implemented recruitment practices that include external and internal applicants.
Recommendation 21
To ensure that no current employee at Highlands has the power to influence the hiring of their relative, Highlands should, by December 2025, require job applicants to assert whether they are related to a current employee at Highlands and require job interviewers to assert that they are not related to the individual they are interviewing. It should also develop or revise its policies to prohibit employees from being involved in the hiring and interview process for their relatives.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On December 5, 2024, HCCTS approved Board Policy 4212.8, Anti-Nepotism and Employment of Relatives, which prohibits employees from participating in any hiring, promotion, evaluation, disciplinary, or related process involving a relative. Job applications now require all potential new employees to declare anyone within the organization who they currently know and current employees are not allowed to participate in the interview process for any family members or close personal friends.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands’ board policy contains two elements of the recommendation, but lacks the requirement that applicants assert whether they are related to a current employee at Highlands. Highlands’ response says that job applications now require all potential new employees to declare anyone within the organization who they currently know, but Highlands did not provide a documentation stating this.
6-Month Agency Response
As part of the updated HCCTS hiring process, employment applications now require candidates to disclose whether they have any relatives or close personal friends currently employed by the organization. Additionally, all staff participating in interviews are required to complete and sign the Interview Panel Confidentiality & Conflict of Interest Statement, affirming that they are not participating in the interview of a relative or close personal friend.
On September 17, 2025, the Human Resources Department distributed a Staff Conflict of Interest Survey to all employees to identify whether any personnel were related to other HCCTS employees and whether any employees directly or indirectly supervised a family member. The results of the survey confirmed that no employees were supervising their relatives.
On November 6, 2025, the HCCTS Board of Directors approved revisions to Board Policy 4212.8 – Anti-Nepotism and Employment of Relatives. These updates clarified the definitions of “nepotism” and “close personal relationships” and explicitly prohibited employees and Board members from supervising or being supervised by relatives within the same department.
Recommendation 22
To ensure that pay is assigned equitably and based on merit and performance, Highlands should implement policies by December 2025 to create a merit-based structure for devising its salary schedules, evaluating staff, assigning salaries and salary increases, and deciding on annual bonus amounts.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On February 20, 2025, HCCTS adopted Board Policy 4111.2, establishing a structured and equitable promotion process that recognizes demonstrated competence. In alignment with this policy, HCCTS will collaborate with an independent contractor to develop policies and procedures that ensure a fair and consistent pay structure. Additionally, HCCTS has implemented staff evaluations through the third-party platform Frontline, providing a centralized system for storing and referencing all evaluations. To further support transparency and consistency, HCCTS has drafted Administrative Regulation 4111.1, which defines the procedures for staffing requests and approvals and will be presented to the HCCTS Board for authorization, September 4, 2025.
Public Reasoning Behind State Auditor 60-Day Assessment
Highlands’ board policy establishes a structured promotion process, but does not provide a clearly documented merit-based structure for the associated salary increases. To the extent that Highlands’ contract with Frontline includes a merit-based structure for evaluating staff or other elements of this recommendation, Highlands will need to provide documentation of that structure for review. Full implementation of this recommendation will require documentation of a merit-based structure for devising Highlands’ salary schedules, evaluating staff, assigning salaries and salary increases, and deciding on annual bonus amounts.
6-Month Agency Response
Between September and November 2025, the Director of Human Resources at HCCTS led a team in a comprehensive review of all employees’ salaries and salary schedules to ensure pay is being assigned equitably. This team also reviewed all job descriptions.
Following this review, HCCTS adopted two administrative regulations on December 11, 2025: AR 4111a Hiring Practices – Salary Placement for Teachers and Counselors and AR 4111b Hiring Practices – Salary Placement for Classified and Administrative Personnel. These regulations establish a step and column system to determine compensation based on years of service and qualifications.
Compensation is explicitly not tied to evaluations, as noted in the regulations “Salary schedule movement shall not be based on performance evaluations or ratings. Performance reviews will be conducted, but will not impact compensation.”
With regard to bonuses, HCCTS Board Policy 4111.2 specifies, “HCCTS does not provide bonuses or other discretionary monetary awards to employees. Employee compensation is determined through the established salary schedules, contracts, or approved wage structures.”
Recommendation 23
To prevent favoritism and pay inequity, Highlands should, by December 2025, implement a policy to adhere to its salary schedules and not allow executive management to approve increases outside of salary schedule limits.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
Currently no employees at HCCTS have salaries that are outside of the salary schedule based on their job description. HCCTS’s new Chief Operations Officer (COO) is currently reviewing all salaries to identify and address potential pay inequities and continuing to improve the process of determining starting salaries for all employees. The COO will work with an independent contractor to ensure that a comprehensive set of policies and procedures, including salary schedules and pay increases, is in place and fully implemented by January 2026.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require a documented policy for Highlands to adhere to its salary schedules and not allow executive management to approve increases outside of salary schedule limits.
6-Month Agency Response
On August 1, 2025, HCCTS hired a new Chief Operations Officer (COO) who reviewed all salaries to identify and address potential pay inequities and continued to improve the process of determining starting salaries for all employees. Through this process the COO ensured that no HCCTS employees are being paid outside of the applicable salary schedule for their position. HCCTS Board Policy 4111.2, as revised and adopted on December 22, 2025, disallows salary increases outside of approved salary schedule limits. This policy ensures consistency and helps prevent pay inequities and favoritism in compensation decisions.
Recommendation 24
To ensure that students receive a quality education from credentialed teachers, Highlands should, by December 2025, document and implement a process to ensure that its teachers are properly credentialed and appropriately assigned to classes, including ensuring that paraeducators do not teach classes.
Agency response status:
Fully implemented
Date of implementation:
Aug. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On February 20, 2025, HCCTS approved Board Policy 4112.2, which requires all certificated employees to maintain valid and appropriate credentials. On July 2, 2025, HCCTS approved Board Policy 4112.21, which ensures that all staff hold valid credentials for the instructional settings to which they are assigned. On February 20, 2025, HCCTS approved Board Policy 4111, which requires credential verification for all positions requiring certification during the hiring process. HCCTS has partnered with UMass Global to support teachers in obtaining single-subject credentials as mandated by the California Commission on Teacher Credentialing. On June 5, 2025, the HCCTS Board of Directors approved the contract with UMass Global. On May 15, 2025, HCCTS also approved and implemented Board Policy 4112.3, Teacher Credentialing Reimbursements, to support proper credentialing. HCCTS also reports teacher assignments, with documentation of appropriate credentialing, to TRUSD on a monthly basis.
Recommendation 25
To ensure that Highlands’ instructors can provide students with a quality education through smaller class sizes, Highlands should, by December 2025, create a policy to establish an appropriate student-to-teacher ratio for its classroom-based instruction and calculate and monitor its ratios at both HCCS and CICA.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On June 5, 2025, the HCCTS Board of Directors approved Board Policy 6170, which outlines the Student-to-Teacher and Paraeducator Ratios at HCCS and CICA. HCCTS maintains the mandated 25:1 independent study Student-Teacher ratio for CICA. Student-Teacher ratios at HCCS are currently capped at 30:1. HCCTS uses an updated implementation of PowerSchool and Schoolytics, a data analysis platform, to track class sizes. As an additional layer of accountability HCCTS sends enrollment reports to TRUSD for both HCCS and CICA on a monthly basis.
Public Reasoning Behind State Auditor 60-Day Assessment
Although it provided class listings showing maximum roster sizes that align with the ratios in its response, Highlands’ policies state ratios that differ from what it included in its response and lack a clear description of how it will establish, calculate, and monitor ratios. Policies that include those descriptions will be required for full implementation of this recommendation.
6-Month Agency Response
On June 5, 2025, the HCCTS Board of Directors approved Board Policy 6170, which outlines the Student-to-Teacher and Paraeducator Ratios at HCCS and CICA. HCCTS maintains the mandated 25:1 independent study student-to-teacher ratio for CICA. Student-to-teacher ratios at HCCS are currently capped at 30:1. HCCTS uses an updated implementation of PowerSchool and Schoolytics, a data analysis platform, to track class sizes. On December 22, 2025, the HCCTS Board of Directors approved the revised BP 6170 with the following changes: the implementation of an ongoing process to monitor ratios, a requirement that ratios be reviewed quarterly, a specified method of calculation, and the Chief Academic Officer is designated as the party responsible for calculating and tracking class size ratios, effective immediately. The updated BP 6170 also outlines the course for corrective action and reporting.
Recommendation 26
To ensure transparency about its student outcomes and to avoid misleading its stakeholders, Highlands should implement a policy by December 2025 to comply with all School Accountability Report Card requirements, including the missing tables highlighted by CDE, and using the correct graduation rate methodology.
Agency response status:
Not fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Partially Implemented, Department did not address all aspects of the recommendation
60-Day Agency Response
In the 2024-2025 school year, HCCTS overhauled its SARC to comply with recommendations from the CDE. The 2024-2025 SARC will comply with all requirements and will include the four- to five-year cohort graduation rates as reported on the California Dashboard. HCCTS has contracted with Charter Impact to assist with the data collection and reporting. HCCTS is also in the process of hiring a Data Specialist to support these efforts
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require a policy outlining how Highlands will comply with all SARC requirements, including the missing tables and using the correct graduation methodology.
6-Month Agency Response
In the 2024-2025 school year, HCCTS overhauled its SARC to comply with recommendations from the CDE. The 2024-2025 SARC will comply with all requirements and will include the four- to five-year cohort graduation rates as reported on the California Dashboard. HCCTS has contracted with Charter Impact to assist with the data collection and reporting. On December 22, 2025, HCCTS Board of Directors approved a School Accountability Report Card Policy ensuring that both HCCS and CICA will comply with all regulations and best practices including those recommended by its authorizer.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation will require more detail in its policy about how it will comply with the requirements, including the missing tables highlighted by CDE and using the correct graduation rate methodology.
Recommendation 27
To comply with state law and provide transparency about the effectiveness of the education it provides, Highlands should, by December 2025, implement procedures to require participation in the California Science Test annually.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
On January 23, 2025, an LEA CAASPP Coordinator for HCCS was appointed. HCCS implemented CAST testing in the 2024-2025 school year. In 2025-2026, HCCS and CICA will implement CAST testing, with an LEA CAASPP Coordinator designated for the school year, and CAST incorporated into the 2025-2026 assessment calendar. The CAST assessment window for the 2025-2026 school year will be open from March 16, 2026 to April 30, 2026 for both HCCS and CICA.
Public Reasoning Behind State Auditor 60-Day Assessment
Although Highlands provided evidence that it completed CAST testing in 2025 and plans to also do so in 2026, full implementation of this recommendation will require documented procedures to require participation in the California Science Test annually.
6-Month Agency Response
HCCS implemented California Science Test (CAST) testing during the 2024-2025 school year. The outcome of this testing is currently publicly available on the California School Dashboard. On December 22, 2025, the Board of Directors approved BP 6162.2 – Annual CAST Participation Policy, to require annual participation in the CAST assessment for both HCCS and CICA. The HCCTS CAASPP Coordinator will ensure that all eligible students are accurately entered into the Test Operations Management System (TOMS) no later than January 1, 2026. The CAST assessment window for the 2025-2026 school year will be open from March 16, 2026, through April 30, 2026, for both HCCS and CICA. Following the completion of testing, HCCTS will retain all records required for state reporting, auditing, and authorizer review.
Recommendations to Twin Rivers Unified School District
Recommendation 28
To ensure that Highlands’ students receive a quality education from appropriately credentialed teachers, Twin Rivers should, by December 2025, implement procedures to verify that its charter schools address and resolve identified misassignments within 30 calendar days, as state law requires.
Agency response status:
Not fully implemented
Date of implementation:
Start of the 2026-27 School Year
State Auditor assessment status:
Pending
60-Day Agency Response
The District’s implemented policies and procedures for this area are governed by the CTC and are strictly followed. The District will monitor HCCTS teacher assignment using the additional guidance recently provided by the CTC.
Public Reasoning Behind State Auditor 60-Day Assessment
The district did not provide documentation of procedures it implemented in response to this recommendation. Full implementation will require documented and implemented procedures to verify that the District’s charter schools address and resolve identified misassignments within 30 calendar days, as state law requires.
6-Month Agency Response
The District continues to consistently satisfy its credential monitoring obligations as outlined by the Education Code and the Commission on Teacher Credentialing (“CTC”). The District’s policies and procedures for this process are governed by the CTC and are strictly followed. A draft of the District’s policies and procedures is being submitted here with our 6-month reply.
Public Reasoning Behind State Auditor 6-Month Assessment
TRUSD has provided a draft of its policies and procedures for verifying that charter schools address and resolve identified misassignments that appears to include resolving identified misassignments within 30 calendar days. Full implementation of this recommendation will require the district to implement those procedures and to ensure that those procedures include verification that its charter schools address and resolve identified misassignments within 30 calendar days.
Recommendation 29
To ensure that the charter schools it authorizes provide transparency about the quality of education they provide, Twin Rivers should, by December 2025, implement a mechanism in its annual oversight procedures to verify that schools meet the conditions of apportionment regarding participating in state testing requirements.
Agency response status:
Not fully implemented
Date of implementation:
Start of the 2026-27 School Year
State Auditor assessment status:
Pending
60-Day Agency Response
The District is in the process of developing and implementing an enhanced set of policies and procedures designed to strengthen accountability and oversight in this area for all of our authorized charter schools. As part of that effort, the District has retained the services of outside consultants who will continue to support us in both the development of enhanced procedures as well as the practical implementation. This work includes an evaluation process that will be piloted and tested during the 2025-26 school year to ensure the new systems are both effective in practice and fully aligned with state charter oversight requirements.
As part of this process, it is anticipated that the District will conduct multiple phases of review, refinement, and validation to confirm that the updated policies and procedures operate as intended and support consistent, high-quality oversight. Following this testing period, additional adjustments may be incorporated based on findings and stakeholder feedback before the policies are finalized. We anticipate completing this process, including all refinements and approvals, by June 2026.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ implementation of a mechanism in its annual oversight procedures to verify that schools meet the conditions of apportionment regarding participating in state testing requirements.
6-Month Agency Response
The District will review the California School Dashboard’s data from the 2024-25 school year when it is released. The Dashboard will include the CAST assessment beginning with the 2025-26 school year, enabling us to monitor each charter school’s academic and engagement metrics. Additionally, the District continues to work with outside consultants to review and update our oversight policies and procedures, which include monitoring participation in required assessments. A draft of the District’s policies and procedures is being submitted with our 6-month reply.
Public Reasoning Behind State Auditor 6-Month Assessment
Twin Rivers has drafted a policy and procedure for its annual oversight procedures to monitor participation in state testing requirements. Full implementation of this recommendation will require the district to finalize and implement policies and procedures.
Recommendation 30
To ensure that the schools it authorizes comply with state law and their charters, and that staff and officials are aware of Twin Rivers’ expectations in conducting such oversight, by December 2025, Twin Rivers’ board and management should create and implement comprehensive policies and procedures that require staff to ensure that the charter schools it authorizes sufficiently address audit findings and recommendations, including reviewing documentation to verify that recommendations are implemented.
Agency response status:
Not fully implemented
Date of implementation:
Start of the 2026-27 School Year
State Auditor assessment status:
Pending
60-Day Agency Response
The District is in the process of developing and implementing an enhanced set of policies and procedures designed to strengthen charter school accountability and our oversight in this area. This work includes an evaluation process that will be piloted and tested throughout the 2025-26 school year.
As part of this process, it is anticipated that the District will conduct multiple phases of review, refinement, and validation to confirm that the updated policies and procedures operate as intended and support consistent, high-quality oversight. Following this testing period, additional adjustments may be incorporated based on findings and stakeholder feedback before the policies are finalized.
We anticipate completing this process, including all refinements and approvals, by the start of the 2026-27 school year.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ creation and implementation of comprehensive policies and procedures that require staff to ensure that the charter schools it authorizes sufficiently address audit findings and recommendations, including reviewing documentation to verify that recommendations are implemented.
6-Month Agency Response
As stated in our May 27, 2025, letter to the auditor’s office, the District has already updated policies and procedures regarding audit recommendation follow-up. A draft of the District’s policies and procedures is being submitted with our 6-month reply.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation of the recommendation will require the district to approve and implement comprehensive policies and procedures that require staff to ensure that the charter schools it authorizes sufficiently address audit findings and recommendations, including reviewing documentation to verify that recommendations are implemented.
Recommendation 31
To ensure that the schools it authorizes comply with state law and their charters, and that staff and officials are aware of Twin Rivers’ expectations in conducting such oversight, by December 2025, Twin Rivers’ board and management should create and implement comprehensive policies and procedures that provide staff with expectations for reviewing and approving new and renewal charter petitions, including what constitutes a reasonably comprehensive description in the petition and what documentation staff must provide to the board to demonstrate the adequacy of their review.
Agency response status:
Not fully implemented
Date of implementation:
Start of the 2026-27 School Year
State Auditor assessment status:
Pending
60-Day Agency Response
The District is in the process of developing enhanced policies and procedures in this area. Since the District does not have any charter renewals for the current school year, the testing of the updated policies and procedures will likely occur in the upcoming 2026-27 school year.
Once the updated processes and policies are tested, additional updates may be needed before they are finalized. We anticipate this process being completed by June 2027.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ creation and implementation of comprehensive policies and procedures that provide staff with expectations for reviewing and approving new and renewal charter petitions, including what constitutes a reasonably comprehensive description in the petition and what documentation staff must provide to the board to demonstrate the adequacy of their review.
6-Month Agency Response
While the current policies and procedures meet Ed code requirements, the District is updating our policies and procedures regarding the petition review process, as part of our ongoing efforts to improve our processes and maintain consistent practices year to year. The District will utilize reputable resources to support the petition review, such as the FCMAT petition review checklist or the California Charter Authorizing Professionals (CCAP) petition review checklist. For renewals, the District anticipates using the CCAP renewal checklist once it is published and made accessible. While the draft policies and procedures are not finalized, we have included the draft instructions for petitioners when submitting new petitions for review.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ creation and implementation of comprehensive policies and procedures that provide its staff with expectations for reviewing and approving new and renewal charter petitions, including what constitutes a reasonably comprehensive description in the petition and what documentation district staff must provide to the board to demonstrate the adequacy of their review.
Recommendation 32
To ensure that the schools it authorizes comply with state law and their charters, and that staff and officials are aware of Twin Rivers’ expectations in conducting such oversight, by December 2025, Twin Rivers’ board and management should create and implement comprehensive policies and procedures that require staff to conduct sufficient charter school oversight activities that align with state guidance and key best practices, and which, for key determinations, do not solely rely upon the annual audit or a charter school’s assertions. It should also require that the results of this information and a description of the methodology staff used for reviewing the items be summarized in the annual oversight reports.
Agency response status:
Not fully implemented
Date of implementation:
Start of the 2026-27 School Year
State Auditor assessment status:
Pending
60-Day Agency Response
The District is in the process of developing enhanced policies and procedures and has retained the services of outside consultants. These processes will be tested through oversight activities during the current 2025-26 school year and will be updated as needed.
In July 2025, the District met with representatives from all of the TRUSD authorized independent charter schools to outline the enhanced oversight policies and procedures and to communicate expectations for the current school year. The District will evaluate the efficacy of these enhanced oversight polices at the conclusion of the school year, and once the testing phase has concluded, we will evaluate whether additional changes are required. Ongoing efforts will be monitored throughout the year, and we anticipate finalizing policies and procedures by the start of the 2026-27 school year.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ creation and implementation of comprehensive policies and procedures that require staff to conduct sufficient charter school oversight activities that align with state guidance and key best practices, and which, for key determinations, do not solely rely upon the annual audit or a charter school’s assertions. The policies and procedures should also require that the results of this information and a description of the methodology staff used for reviewing the items be summarized in the annual oversight reports.
6-Month Agency Response
The District has met and continues to meet all statutory oversight requirements outlined in the CSA, as specifically defined in Education Code Section 47604.32. In accordance with applicable law, the District continues to rely upon multiple oversight tools, including the annual independent audit, interim financial reports, budget reviews, and formal site visits to determine whether the charter schools have been operating in compliance with state law and their charters.
The District remains committed to continuous improvement and is in the process of reviewing and updating our oversight processes and procedures. A draft of the District’s policies and procedures is being submitted with our 6-month reply.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation of this recommendation will require finalization and implementation of comprehensive policies and procedures that require staff to conduct sufficient charter school oversight activities that align with state guidance and key best practices, and which, for key determinations, do not solely rely upon the annual audit or a charter school’s assertions. The policies and procedures should also require that the results of this information and a description of the methodology staff used for reviewing the items be summarized in the annual oversight reports.
Recommendation 33
To ensure that the schools it authorizes comply with state law and their charters, and that staff and officials are aware of Twin Rivers’ expectations in conducting such oversight, by December 2025, Twin Rivers’ board and management should create and implement comprehensive policies and procedures that require staff to ensure that charter schools obtain approval for material revisions of their charters when charter schools add new school site locations, grade levels, or other material changes described by state law.
Agency response status:
Not fully implemented
Date of implementation:
Start of the 2026-27 School Year
State Auditor assessment status:
Pending
60-Day Agency Response
Since the District believes that the process for the approval of material revisions of charters is governed by the Education Code, the implementation of comprehensive policies and procedures in this area is not necessary. However, to clarify expectations and accountability, the District expressly identified this requirement in MOU Amendment No. 3 entered into by and between the District and HCCTS in January 2024 for HCCS and CICA, and we are in the process of updating the MOU with other authorized charter schools to reflect the same.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ creation and implementation of comprehensive policies and procedures that require staff to ensure that charter schools obtain approval for material revisions of their charters when charter schools add new school site locations, grade levels, or other material changes described by state law.
6-Month Agency Response
In accordance with the Education Code, the District requires all charter schools under its authorization to submit a material revision request when proposing to expand operations to one or more additional sites or grade levels, or seeking other material changes to their charter. A draft of the instructions to charter school leaders and of the District’s policies and procedures is being submitted with our 6-month reply.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ finalization and implementation of comprehensive policies and procedures that require staff to ensure that charter schools obtain approval for material revisions of their charters when charter schools add new school site locations, grade levels, or other material changes described by state law.
Recommendation 34
To ensure that the schools it authorizes comply with state law and their charters, and that staff and officials are aware of Twin Rivers’ expectations in conducting such oversight, by December 2025, Twin Rivers’ board and management should create and implement comprehensive policies and procedures that outline the specific steps for investigating and resolving potential violations of state law or the charters, including that, upon the determination that a significant violation has occurred, Twin Rivers must provide the charter school with written notice of the violation that could lead to revocation of a school’s charter if not resolved.
Agency response status:
Not fully implemented
Date of implementation:
Start of the 2026-27 School Year
State Auditor assessment status:
Pending
60-Day Agency Response
The District is in the process of developing and enhancing policies and procedures, which we will be testing and monitoring during the 2025-26 school year. This testing will help to ensure the changes made are both effective and efficient in meeting our charter oversight obligations.
Once the updated processes and policies are tested, additional updates may be needed before they are finalized. We anticipate this process being completed by the start of the 2026-27 school year.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ creation and implementation of comprehensive policies and procedures that outline the specific steps for investigating and resolving potential violations of state law or the charters, including that, upon the determination that a significant violation has occurred, Twin Rivers must provide the charter school with written notice of the violation that could lead to revocation of a school’s charter if not resolved.
6-Month Agency Response
The District continues to meet all statutory oversight requirements outlined in the CSA, as specifically defined in Education Code Section 47604.32. The District remains committed to ongoing improvement and will review and update our policies and procedures to further refine and document our approach for addressing an authorized charter school’s potential violation of state law and/or its charter. A draft of the District’s policies and procedures is being submitted with our 6-month reply.
Public Reasoning Behind State Auditor 6-Month Assessment
Full implementation of this recommendation will require documentation of Twin Rivers’ finalization and implementation of comprehensive policies and procedures that outline the specific steps for investigating and resolving potential violations of state law or the charters, including that, upon the determination that a significant violation has occurred, Twin Rivers must provide the charter school with written notice of the violation that could lead to revocation of a school’s charter if not resolved.
Recommendation 35
To ensure that the schools it authorizes comply with state law and their charters, and that staff and officials are aware of Twin Rivers’ expectations in conducting such oversight, by December 2025, Twin Rivers’ board and management should create and implement comprehensive policies and procedures that require staff to establish a method for tracking Twin Rivers’ actual costs for charter oversight and collect only the oversight and facilities fees allowed in state law.
Agency response status:
Will not implement
State Auditor assessment status:
Will not implemented
60-Day Agency Response
As stated in our May 27, 2025, letter to the Auditor’s office, this recommendation imposes a standard or expectation for charter authorizers beyond what is currently required by the CSA, and therefore, is not legally enforceable. The District finds the implementation of this recommendation to be impractical and functionally impossible to implement. While there is no statutory or regulatory requirement for itemized tracking, and no practical method exists to allocate personnel time with precision across a vast network of oversight contributors, the District remains committed to responsible and compliant oversight of the charter schools under its authorization in accordance with current law.
Public Reasoning Behind State Auditor 60-Day Assessment
As we stated in our comments on Twin River’s response to the audit, state law allows a chartering authority to charge the charter schools it authorizes and oversees for the actual cost of oversight, not to exceed 3 percent of the charter school’s revenue, if the charter school is able to obtain substantially rent-free facilities from the chartering authority. Our recommendation aligns with the wording of the law, and we do not see how Twin Rivers can determine the amount of its actual costs if it has no method to track them. Therefore, we stand by our recommendation.
6-Month Agency Response
The District is dedicated to partnering with state and county oversight agencies, as well as the Legislature, to enhance oversight practices and foster stronger collaboration across all educational entities.
Public Reasoning Behind State Auditor 6-Month Assessment
As we stated in our comments on Twin River’s response to the audit, state law allows a chartering authority to charge the charter schools it authorizes and oversees for the actual cost of oversight, not to exceed 3 percent of the charter school’s revenue, if the charter school is able to obtain substantially rent-free facilities from the chartering authority. Our recommendation aligns with the wording of the law, and we do not see how Twin Rivers can determine the amount of its actual costs if it has no method to track them. Therefore, we stand by our recommendation.
Recommendations to California Department of Education
Recommendation 36
To ensure that schools participate in their required testing and to ensure transparency about student assessment outcomes, by December 2025, CDE should propose including a procedure in the K-12 audit guide to verify that schools meet the condition of apportionment regarding participating in state testing requirements.
Agency response status:
Fully implemented
Date of implementation:
Nov. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
CDE continues to determine the feasibility of proposing a procedure for inclusion in the K-12 Audit Guide to verify charter school compliance with state testing requirements, which is a condition of apportionment. As part of that process, CDE’s School Fiscal Services Division and the Assessment Development and Administration Division met in July 2025 for an initial discussion of requirements for statewide assessment participation, existing data collection methods, and other considerations to be aware of (see Agenda on p. 2-3). This workgroup will meet again in August 2025 to continue the audit procedure drafting process, and then on an ongoing basis, as necessary, to present a proposal for adding a procedure to the 2026-27 K-12 Audit Guide.
6-Month Agency Response
CDE drafted a proposed audit procedure to verify participation in the California Assessment of Student Performance and Progress (CAASPP) statewide testing program for charter schools serving adult students through an exclusive partnership with a federal workforce program under Education Code section 47612.1.
On November 13, 2025, as part of the annual process of updating the audit guide, the CDE presented the proposed audit procedure to the K-12 Audit Guide Workgroup. The CDE addressed questions and concerns from the Workgroup participants, which include representatives from statewide education associations, school business officials, county superintendents, teachers’ organizations, certified public accountants, and the Fiscal Crisis and Management Assistance Team (Education Code 14502.1).
Due to the lack of statutory authority, the proposed procedure did not receive sufficient support for inclusion in the 2026-27 Audit Guide. An amendment to the Education Code would be necessary before it could be considered. Additionally, there is concern that the proposed procedure would only be marginally effective because it does not address certain practices noted in the California State Auditor’s report, such as modifying student enrollment to avoid placing students in grade levels where testing is mandated, which would require a legislative change to prohibit.
CDE has fully complied with the CSA’s recommended action and remains committed to keeping the lines of communication open and will continue internal discussions on measures to identify and remedy future instances of noncompliance.
Recommendation 37
To ensure that it takes appropriate action related to Highlands, the state superintendent should direct CDE to immediately investigate whether Highlands has sufficiently complied with state law, met the conditions of K-12 funding, and appropriately claimed K-12 funding. To the extent that CDE determines that Highlands has failed to significantly address the audit findings in this report and others, or that Highlands has committed any violations of state law, has not met the conditions to receive K-12 funding, has not demonstrated improved pupil achievement, or inappropriately claimed K-12 funding, the state superintendent should take appropriate action, including pursuing adjustments to Highlands’ apportionments and making a recommendation to the State Board of Education to take appropriate action, up to and including revoking Highlands’ charters.
Agency response status:
Not fully implemented
Date of implementation:
Dec. 2026
State Auditor assessment status:
Pending
60-Day Agency Response
The CDE sent management decision letters to both Highlands Community Charter and California Innovative Career Academy regarding the following: (1) disallowed average daily attendance identified in the audit; (2) informing the local educational agencies (LEAs) about their rights to appeal; and (3) the timeline for doing so.
LEAs have 60 days from the date the final audit report was issued to seek a formal appeal, and 30 days to seek summary review. The CDE has been in communication with legal counsel for the LEAs who requested additional information regarding the CDE’s calculations. Highlands filed a request for summary review with the Education Audit Appeals Panel (EAAP) on July 24, 2025, and a formal appeal is expected to follow.
The CDE is also closely monitoring the follow up actions of Twin Rivers Unified School District, which sent a Notice of Violation to Highlands for its failure to submit its 2023-24 annual audit. Twin Rivers has informed CDE that Highlands’ annual audit will be completed by September 1, 2025, and the CDE will review the information once it is received by the department and follow up as necessary with the appropriate parties.
6-Month Agency Response
As previously noted, both Highlands Community Charter (Highlands) and California Innovative Career Academy (CICA) have sought summary review of the audit findings from the Education Audit Appeals Panel (EAAP). Summary review was denied, and formal appeals were filed. Those matters have been referred to the Office of Administrative Hearings by EAAP and both the State Controller’s Office and Department of Finance are representing the interests of the State in the audit appeal. The CDE is not a party to the audit appeals, which are currently scheduled for April 6, 2026 (Highlands) and June 8, 2026 (CICA).
Twin Rivers Unified School District (Twin Rivers) issued a “Notice of Intent to Revoke” to Highlands over various concerns which have not been resolved. A hearing concerning revocation was conducted on December 2, 2025, and a final determination is expected to be made by the Twin Rivers board at a meeting scheduled for January 13, 2026. As previously stated, CDE continues to closely monitor the follow-up actions of Twin Rivers, which will assist in determining potential future actions by CDE.
The CDE has not received Highlands’ 2023-24 annual audit which was due on December 15, 2024, and therefore, has not been able to conduct any review or follow-up on any concerns which may be identified in the audit; however, once the audit is submitted and provided to the CDE, we will review the information and follow up as necessary with the appropriate parties.
Public Reasoning Behind State Auditor 6-Month Assessment
Implementation of this recommendation will require CDE to investigate Highlands and take appropriate action to address any determinations that Highlands has failed to significantly address the audit findings in this report and others, that Highlands has committed any violations of state law, that it has not met the conditions to receive K-12 funding, that it has not demonstrated improved pupil achievement, or that it inappropriately claimed K-12 funding.
Recommendation to California Commission on Teacher Credentialing
Recommendation 38
To ensure that LEAs, including charter schools, resolve teacher misassignments as state law requires, by December 2025, CTC should initiate promulgation of regulations defining the standards for LEAs that consistently misassign educators and what sanctions CTC may impose on those agencies.
Agency response status:
Not fully implemented
Date of implementation:
8/1/2027
State Auditor assessment status:
Pending
60-Day Agency Response
The Commission’s Assignment Monitoring Program (AMP) has developed a sanction concept and solicited approval from agency leadership. In summary, it involves requiring administrators and district superintendents to complete Commission sanctioned trainings if the Local Educational Agencies (LEA) they are responsible for meet the thresholds for egregious misassignments. If they do not complete trainings, the Commission will take action against their credentials.
The next steps are to present the proposal to the Commission on Teacher Credentialing at the December 2025 meeting for potential approval and, if approved, solicit stakeholder feedback and necessary resources to pursue the proposal.
Public Reasoning Behind State Auditor 60-Day Assessment
We will review the proposal and any other documentation, along with the results of the December 2025 CTC meeting, when the CTC submits its next response.
6-Month Agency Response
Commission staff presented the proposed plan for sanctions during the December Commission Meeting in Item 3A: Certificated Educator Assignment Monitoring Sanctions. The Item was approved, and the agency will move forward with the development of regulations.
The next steps are to solidify the finer details of the plan through stakeholder engagement and data analysis. The Commission also requested that staff present another Item with a final proposal. Staff is slated to present the resulting comprehensive plan and draft regulations at the April Commission Meeting. If approved, staff will immediately start the rulemaking process.
Public Reasoning Behind State Auditor 6-Month Assessment
We will review the comprehensive plan, draft regulations, and results of the April commission meeting when the CTC submits its next response.
Recommendations to Sacramento County Office of Education
Recommendation 39
To ensure that the audits it requests lead to meaningful reductions in identified deficiencies, the Sacramento COE should, by December 2025, implement procedures to verify that all LEAs within the county’s jurisdiction sufficiently address audit findings and recommendations from those audits, such as by reviewing documentation or following up to verify that the agency addressed the findings and recommendations.
Agency response status:
Fully implemented
Date of implementation:
Nov. 2025
State Auditor assessment status:
Partially Implemented, Department did not address all aspects of the recommendation
60-Day Agency Response
The California Department of Education (CDE) directly communicates with charter schools that have audit findings and it includes the Sacramento County Office of Education (SCOE) in these communications with the schools. SCOE monitors the interactions between CDE and the charter school to ensure that the charter school responds appropriately, and if it fails to do so, SCOE reaches out to the charter school’s authorizer. We note that SCOE does not have any direct authority over charter schools and cannot compel a charter to address audit findings.
We are working on documenting our current practices, which will include requesting documentation from charter school authorizers demonstrating that they ensure the charter schools they authorize address audit findings and recommendations. As part of this process, we will notify the CDE and the State Board of Education of any issues with a charter school and its authorizer.
Public Reasoning Behind State Auditor 60-Day Assessment
Full implementation of this recommendation will require documented procedures to verify that all LEAs within the county’s jurisdiction sufficiently address audit findings and recommendations from those audits, such as by reviewing documentation or following up to verify that the agency addressed the findings and recommendations.
6-Month Agency Response
The California Department of Education (CDE) directly communicates with charter schools that have audit findings and it includes the Sacramento County Office of Education (SCOE) in these communications with the schools. SCOE monitors the interactions between CDE and the charter school to ensure that the charter school responds appropriately, and if it fails to do so, SCOE reaches out to the charter school’s authorizer. We note that SCOE does not have any direct authority over charter schools its Board has not authorized and cannot compel such a charter to address audit findings.
We have updated our procedures as of November 2025 to review annual and extraordinary audit report exceptions and findings for school districts and charter schools, focusing on fraud, misappropriation of funds, or other illegal fiscal practices. If the school district or charter school fails to adopt a plan to correct significant audit findings or the plan is inadequate, SCOE will notify the California Department of Education, the State Board of Education and, if applicable, the authorizing school district of its concerns. SCOE may consider the authorizing school district’s response as part of its fiscal oversight of school districts.
Public Reasoning Behind State Auditor 6-Month Assessment
Sacramento COE provided a memo with procedures to determine whether the school district or charter school has developed a plan of correction for findings and exceptions in extraordinary audits, but does not include procedures to review documentation to follow up to verify that LEAs sufficiently addressed findings and recommendations. To ensure that the audits it requests lead to meaningful reductions in identified deficiencies, Sacramento COE will need to do more than just verify that a plan is in place to address findings and recommendations. Its procedures should include reviewing documentation or following up to to verify that the agency has addressed those findings and recommendations.
Recommendation 40
To ensure that chartering authorities within its county are not placing their financial stability at risk through insufficient oversight of the charter schools they authorize, the Sacramento COE should, by December 2025, implement procedures for reviewing how chartering authorities fulfill their charter school oversight responsibilities.
Agency response status:
Fully implemented
Date of implementation:
Nov. 2025
State Auditor assessment status:
Fully implemented
60-Day Agency Response
State law does not require county superintendents to monitor the oversight activities of a charter school authorizer nor does it provide county superintendents with authority to compel a charter school authorizer to take action against a charter school. However, in the past, the Sacramento County Office of Education (SCOE) has reviewed a school district’s relationship with, and oversight of, the charter schools it has authorized when the schools pose a fiscal risk to the district. SCOE is working on documenting our fiscal oversight procedures to ensure that a school district’s authorized charter schools are not a fiscal risk to them due to the district’s insufficient oversight.
Public Reasoning Behind State Auditor 60-Day Assessment
Implementation of this recommendations will require Sacramento COE to document and implement procedures for reviewing how chartering authorities fulfill their charter school oversight responsibilities.
6-Month Agency Response
Fiscal oversight of charter schools is primarily the responsibility of the charter’s authorizing school district. The authorizing school district is responsible for adequate and appropriate oversight, including determining if a charter school is following prudent business practices and generally accepted accounting principles for revenues and expenditures and preparing financial reports. An authorizer can be liable for the debts of a charter school if it fails to provide the oversight required by law.
We have updated our procedures as of November 2025 to require each school district within the jurisdiction of the SCOE that has authorized one or more charter schools to submit to SCOE with its adopted budget each year policies and procedures demonstrating it is fulfilling its charter oversight responsibilities. As part of SCOE’s evaluation of a school district’s budget and its risk for fiscal insolvency, SCOE will consider a school district’s policies and procedures demonstrating it is fulfilling its oversight responsibilities.
