Study Service Firm Allegedly Bilked Schools by Filing Phony Claims

The Los Angeles Unified School District allegedly was duped out of hundreds of thousands of dollars by an independent study service that charged the district for students who were not enrolled and instructors who did not exist, according to court records.

The California attorney general’s office served a search warrant Tuesday on The Institute for Successful Living Inc., seizing computer files, student records and other documents for 1988 through 1991, according to an affidavit filed in Los Angeles Superior Court.

Though a spokesman for the state attorney general refused to comment on the investigation, court documents said there was reason to believe that the institute’s executive director, Arnese Clemon, committed grand theft by submitting false claims to the district.

The documents also say that the district’s auditors found numerous irregularities in student records, including unsigned student contracts and apparently fabricated student work assignments.

“These records will substantiate a charge of grand theft against Arnese Clemon and/or other current or former employees, subcontractors, and/or directors of ISL,” the document states.

The affidavit also contends that Clemon skimmed more than $70,000 from the institute for her brother, U.W. Clemon, who is on the firm’s board of directors.

Clemon did not return phone calls Thursday.

The Los Angeles school board was to vote last Monday on whether to continue its relationship with the institute, which since 1982 has contracted with the district to provide alternative educational opportunities for students who have dropped out or been expelled from regular schools.

District members delayed approving the $206,456 contract--which would go from February to June, 1992--for two weeks in order to ensure that the institute had met all district requirements for the contract. The district learned Tuesday of the state attorney general’s investigation and postponed indefinitely final approval of the contract, said Deputy Supt. Sidney A. Thompson.

“We will not bring the contract forward until the situation involving the attorney general is clarified,” Thompson said.

The district contracts with independent study services to provide an alternative for dropouts and expelled students in the hope that they will either acquire enough credits to return to a regular campus, or to go on to pursue higher education or employment. Such programs must follow stringent record-keeping guidelines to prove daily attendance rates and show that student-teacher ratios stay within contractual limits.

The affidavit alleges that the district was often billed for students who were not enrolled. In February, 1991, the district paid $2,520 to the institute for 10 students who did not attend the educational site or complete work assignments during the specified time, according to an interview between a state investigator and a district official cited in the document.

The last contract that the district held with the firm was for the 1990-91 school year. Thompson said the district did not enter into a new contract with the service because of questions that arose out of a 1990-91 district audit showing an “insufficient amount of substantiation” for more than $300,000 in charges. However, Thompson said, Clemon was able to provide documentation for all but $11,000 of that amount to the auditor’s satisfaction.

Thompson added that though there were irregularities discovered during past audits of the institute, “we found nothing back then that (showed) there was any deliberate attempt to subvert funds from the district,” he said. “What we found was basically a question of the records and record-keeping.”