Halau Lokahi Public Charter School

“Charter school lessens debt, kin exit board.” Honolulu Star Advertiser 6/17/11

In response to its first financial audit, Halau Lokahi Public Charter School in Kalihi is working to fix accounting problems and repay its debts, and has removed family members from the local school board that oversees it.

"Halau Lokahi has made changes and taken immediate corrective actions as recommended by the auditor," said June Nagasawa, chairwoman of the local board for the 10-year-old, Hawaiian-focused school, which employs several members of the director's family and touts its atmosphere of ohana...

The independent auditor that reviewed Lokahi's books cited problems with internal financial controls, unrecorded liabilities, payments to related parties and a lack of verification of employee advances. The school ended the 2010 fiscal year $425,000 in debt. Halau Lokahi's director, Laara Allbrett, said it has erased most of that liability this fiscal year, thanks to an infusion of federal stimulus money that went toward teacher salaries.

The charter school has 244 students in kindergarten through 12th grade. Half are enrolled in its Hawaiian project-based curriculum, and the rest take classes online with Elite Element Academy, a local private school.

Halau Lokahi's 22-member staff includes Allbrett, two daughters, a son, a son-in-law and the son's girlfriend. Allbrett's son is a project manager, her son-in-law is a teacher and the others handle mostly administrative and clerical tasks. One daughter was also the treasurer of the local school board until stepping down from that volunteer position at the advice of the auditor, along with her brother, who was the board's secretary...

"The families come to us because they are sending their children to be educated by a family," said Leo Akana, a cultural and performing arts specialist at the school. "That's the way our families look at us, and that's how we look at them. We consider it an honor, a privilege and a huge responsibility to be their makua, their parents during the day. The Western notion of family comes first, favoritism — that is not the case here at all."

This year all of Hawaii's 31 charter schools were required for the first time to submit independent financial audits for the 2010 fiscal year to the state Charter School Review Panel. Halau Lokahi missed the deadline early this year and submitted its audit last month. It was one of five schools that had negative or marginal net assets and the only charter whose auditor declined to render an opinion, also known as a "disclaimed" audit, according to Bob Roberts, chief financial officer of the Charter School Administrative Office. Carbonaro CPA & Associates of Hilo, which audited most of the state's charters, said it was unable to form an opinion of Halau Lokahi's finances because it could not rely on internal controls at the school and was reviewing only one year's accounts.

"One audit was disclaimed, and that's not a good audit opinion, and the panel feels that it should look into that," said Ruth Tschumy, chairwoman of the state Charter School Review Panel. "It was discussed in the Finance Committee meeting, and the panel has put it on the agenda for its June 23 meeting."

...The [test] scores combine the performance of its day students with its "cyber" students who are studying with Elite Element Academy. That nonprofit online school was opened in 2007 by Heather Kanoe Ahuna and Reydan "Tita" Ahuna, and charges its private students $7,200 per year in tuition. The Charter School Review Panel has asked that the test scores be separated for review.

"The panel has had a hard time determining whether the students are students of Halau Lokahi or Elite Academy," Tschumy said...