Audit finds some school reimbursements too high.

Byline: Anne Williams The Register-Guard

An audit released this week by the Oregon Secretary of State Audits Division found that school districts in 2003-04 wrongly claimed at least $318,000 in state school funds for students attending four publicly funded alternative education programs, including two in Eugene.

Another $807,000 in school funds, meanwhile, was distributed to the programs that year as a result of "questionable" practices by districts, auditors found.

Though not identified in the report, an official in the audits division said HomeSource, a home-schooling resource center in the Bethel district, and the Martin Luther King Education Center, a collaborative program for students referred through the courts, were among those audited.

Will Garber, deputy director of the audits division, said his department could not provide details about which districts are implicated or how much money each program inappropriately received until next week. Randy Harnisch, policy adviser with the state Department of Education, said the department had not yet been given those particulars.

"What I can tell you is the staff is going to be sitting down to meet and discuss our next steps on this in the middle of next week," said Harnisch, whose department asked for the audit more than two years ago due to concerns about how districts were handling alternative education referrals and funding.

Among the audit's findings:

Districts claimed nonresident students without the necessary referral forms or consent from home districts;

Districts made inaccurate student counts due to flawed attendance tracking and faulty calculations; and

In the case of one public program, inappropriately considered unlicensed assistants and interns as instructors, which inflated the per-pupil funding calculation.

The audit recommends that the department seek reimbursement of at least the $318,000, and possibly the additional $807,000. It also recommends that the department periodically verify district claims for funds; develop policies requiring districts to gather and maintain accurate data related to state school fund claims; and clarify policies regarding consent and use of assistants to determine instructional group size, which is a basis for different levels of funding for alternative programs.

In a response included in the audit, the department said it "generally" agreed with the findings and would seek reimbursement of the full $1.125 million.

Harnisch said the department has already corrected many of the questionable practices described in the audit , due in large part to stepped-up scrutiny of alternative education.

"I think this just verifies that the actions that we took were legitimate," he said.

Garber said the audit was not intended to penalize any particular program, but rather to give a sampling of practices that may have occurred throughout the state. According the report, the division "judgmentally selected" four programs, considering student population served, enrollment reporting method and the program operator.

The mix included programs operated by both public agencies and private entities. The MLK Education Center is run by the Lane County Department of Youth Services, Lane Education Service District and Lane Community College, while HomeSource is run by a private nonprofit organization.

Paula Praus-Williamson, founder and chief operating officer for HomeSource, said HomeSource had a chance to review preliminary findings from the audit over the summer, but she hadn't analyzed the final report.

"We don't know how much of (the money in question) applies to us," she said.

Because most HomeSource students in 2003-04 were released by other districts to Bethel for referral, Praus-Williamson said only Bethel and two other districts, Fern Ridge and Springfield, which did separate referrals, would be implicated.

Both she and Bethel Superintendent Colt Gill said it seemed surprising that the department would seek reimbursement, given that most of the practices identified as inappropriate followed advice given by the department itself and only rescinded in 2005.

"We could not have started without them directing us how to do it," said Praus-Williamson, who launched HomeSource in 1995.

John Aarons, a supervisor with Lane County Department of Youth Services, said referrals to the MLK Center go through Lane Education Service District. He said he didn't have details of the audit.