School misused funds, audit finds

An unorthodox charter school operation bilked the state of more than $7.5 million, engaged in blatant nepotism, and spent tens of thousands of dollars on personal travel, expensive meals and assorted luxuries -- including a $20,000 aquarium -- according to the results of an audit released Friday by the Los Angeles County Department of Education.

The audit focused primarily on the finances of the Gorman Learning Center, an independent-study program that opened in 2000 and now serves about 2,200 students. It is operated out of churches in several counties including Los Angeles, Orange and San Bernardino.

Waldo Burford, Gorman’s executive director, acknowledged that mistakes were made in applying for state funds and conceded that bookkeeping and oversight were lax during the school’s rapid expansion. But he denied any intentional wrongdoing and said improvements have been made in overseeing the finances of the program.

“This [audit] chronicles a six-year history from when we opened and were operating out of a two-seat office with folding chairs,” Burford, 57, said. “Were our policies perfect? Far from it. Are we perfect yet? No. Are we getting better each year? Yes.”

No criminal charges have been filed as a result of the audit, but county education officials forwarded the findings to district attorney offices in Los Angeles and San Bernardino.

State education officials, meanwhile, said they plan to aggressively seek reimbursement from the school.

“The public trust has been badly abused by officials running the Gorman Learning Center,” state Supt. of Public Instruction Jack O’Connell said in a prepared statement. The audit “shows that millions of dollars were overspent and tens of thousands of dollars that were supposed to be used for educational purposes were misspent for the personal gain of a few.”

Charter schools are publicly funded, independently run schools that, in exchange for being freed from many of the restrictions placed on traditional schools, are expected to boost student achievement.

The main finding of the audit, which examined three years of the school’s finances through 2006, was that Burford’s operation over-claimed $7.7 million when applying to the state for operating funds.

To maximize the amount of taxpayer money they receive, “nonclassroom” charter schools like Burford’s -- where students complete most of their studies independently and meet infrequently with a teacher -- must prove that they spend a certain amount of the funds each year on teacher salaries and other education-related expenses.

The Gorman Learning Center failed to report hundreds of thousands of dollars in noneducation expenses and filed faulty and incomplete information on teacher salaries, the audit concluded.

In a written response that was released along with the audit, Gorman officials promised to resubmit funding applications for past years. Regarding teacher salaries, however, school officials wrote that the audit’s findings were “premature.”

Much of the rest of the audit focused on questionable expenses paid with school funds. For example, Burford, who received at least $190,000 in salary and bonuses in 2005, treated himself to perks such as an $1,800 office chair and $2,500 treadmill, the audit found.

Public funds also were allegedly used to pay $18,000 in rent for the school’s human resources director over a 21-month period.

One of the more eye-catching details of the report was the $20,024 paid for the purchase and upkeep of an aquarium.

Burford said he “stands by” the purchases mentioned in the audit.

The aquarium, he said, is kept in Gorman’s main office and is a helpful teaching tool for students when they visit.

He acknowledged, however, that it had been a mistake to hire his daughter and pay her an inflated wage to help review student writing samples, as the audit claimed. Though he said his daughter no longer works for the school, Burford defended his decision to continue to employ his son-in-law as a director of the team that assesses the writing samples.

The audit also examined the financial links between Gorman and Lifeline Education, a second charter that Burford started in 2002. The audit found that Gorman may have overstated by $113,000 expenditures it made for Lifeline. Burford said he no longer has any role at the second school.

Gorman Learning Center is the latest in a series of charter school scandals. In 2005, the California Charter Academy, which enrolled 4,500 students at sites all over the state, was closed after its founder was found to have misused millions of dollars in state funds and distributed money to his family and friends. And state education officials are currently battling with another independent-study program to reclaim up to $57 million in alleged overpayments.

Of the state’s 619 charter schools, about 140 are nonclassroom based, said Marta Reyes, who oversees charters for the state’s Department of Education. She emphasized that abuses are rare and efforts to tighten financial reporting rules in recent years have been effective.

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joel.rubin@latimes.com