MGT Investigative Audit Results in Charter School Indictments
Steven Cox, founder of the California Charter Academy (CCA), one of California's largest charter school networks, was recently indicted on 113 felony counts of misappropriation of funds and grand theft.
The criminal investigation into CCA’s operations began after an MGT investigative audit report of CCA was released to the public. Also indicted was Tad Honeycutt, a city councilman, on 15 counts of misappropriation of funds, 15 counts of grand theft, three counts of failure to file a state tax return and one count of filing a false tax return. Cox and Honeycutt face up to 64 and 20 years in prison, respectively.
In June 2004, as a result of multiple indications of irregularities in CCA’s business processes, the state Superintendent of Public Instruction, in collaboration with the county offices of education of Orange and San Bernardino counties, initiated an investigation of the CCA. The counties contracted with the Fiscal Crisis and Management Assistance Team (FCMAT) to lead the investigation. FCMAT then contracted with MGT to conduct the investigation of the CCA charter schools’ business operations.
MGT developed specific audit procedures, including an extensive document review of contract and vendor files, financial statements, accounting records, and personnel files. As a result, MGT identified numerous instances of potential criminal wrongdoing and recommended that the findings be referred to appropriate law enforcement officials.
Click here to learn more about the recent indictments. For more information regarding the initial investigative audit conducted by MGT, please contact Tyler Covey, at (916) 443-3411.
