Responses to the Audit

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Alliance College‑Ready Public Schools

California State Auditor's Comments on the Response From Alliance

Alliance College‑Ready Public Schools

March 27, 2017

Dear Ms. Howle:

Thank you for the opportunity to respond to the draft audit report. We appreciate the professional and positive engagement from your team and believe the audit process was fair and objective. Alliance is dedicated to providing our students with a top-level education that prepares them for college and beyond. We therefore appreciate your acknowledgement of Alliance’s success in educating minority students in the lowest-income communities in Los Angeles. Additionally, we have taken a close look at the areas that you reviewed during the audit and have rapidly taken steps to improve the particular processes and procedures contained in your two recommendations.

The audit confirms that Alliance College-Ready Public Schools did not misuse or misappropriate ANY public funds and that NO funds were diverted from the classroom or elsewhere from where they belonged.
Alliance College-Ready Public Schools fully understands the responsibility that comes with being the steward of public funds and has been extremely diligent in ensuring that every public dollar we receive is spent in an appropriate manner in service of our mission to provide low-income students throughout Los Angeles with a rigorous college-preparatory education.

Alliance College-Ready Public Schools had an internal process to withhold student data upon parent request.

Alliance annually offered families an opportunity to opt-out of sharing student data with external parties. Based on these opt-out requests, Alliance removed student data sent to third parties; however, the auditor identified a need for additional disclosures as part of this process. As the auditor noted in its report, as of December 2016, Alliance has made and will continue to make these additional disclosures.

The new management at Alliance College-Ready Public Schools has either corrected or has begun to address the two recommendations made by auditors.
The audit’s two recommendations have been extremely helpful in bringing to our attention areas that need strengthening and improvement. Our action steps in response to the recommendations are shared below. We firmly believe that upon additional review by the California State Auditor, these issues will be considered fully implemented.

Recommendation 1: To ensure that it complies with federal laws regarding student privacy, Alliance should document its revised process for collecting, tracking, and monitoring the list of Alliance students and families who have opted-out of sharing their directory information with third parties.

In March 2017, Alliance College-Ready Public Schools revised its process for collecting, tracking and monitoring directory and opt-out information. The Alliance believes that this revised process fully implements the State Auditor’s recommendation.

Recommendation 2: The Alliance Home Office should fully implement its revised procurement policies and procedures, including the retention of vendor conflict-of-interest forms, and provide adequate training to ensure that appropriate staff members at both the Alliance Home Office and Alliance schools comply with the new policies and procedures.

The audit report uncovered policy and procedural inconsistencies related to contracting and procurement. None of these inconsistencies violated any law or statute. In January and March 2017, Alliance shared drafts of its revised policies with the auditors. By June 2017, Alliance will have implemented its revised procurement policies and procedures and the associated training per the audit’s recommendations.

Sincerely,

Dan Katzir, CEO
Alliance College-Ready Public Schools

Comments

CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM ALLIANCE

To provide clarity and perspective, we are commenting on the Alliance response to our audit. The numbers below correspond to the numbers we have placed in the margin of Alliance’s response.

Alliance’s comments indicate that it removed student data sent to third parties based on opt-out requests. However we note that, although Alliance provided parents with opt-out letters, it confirmed to us that before the 2016–17 school year it did not have an expectation that schools would retain letters submitted by parents requesting to opt-out of having student directory information shared and it did not have a process to verify the completeness of charter schools’ lists of opt‑out requests. As a result, we were unable to determine whether Alliance’s lists of parents who opted out were complete, or verify that Alliance had honored all opt‑out requests during the period we reviewed.

As part of its response to this report, Alliance submitted its revised process for collecting, tracking, and monitoring opt‑out information. If Alliance implements this revised process, we believe it will have fully implemented our recommendation.

Alliance is putting undue emphasis on the fact that the deficiencies we found related to its management processes do not violate specific provisions of law. Strong management processes, sometimes referred to as internal controls, help ensure that entities do not misuse public funds or otherwise violate the law. Our recommendations, which Alliance accepts, will help Alliance strengthen its internal controls.