The State Auditor says Highlands adopted all 18 reforms recommended in a 2025 audit, but the changes have not been independently tested.
SACRAMENTO, Calif. — The California State Auditor has determined that Highlands Community Charter and Technical Schools carried out all 18 corrective actions recommended specifically for the organization. However, the Auditor cautions that the designation does not mean the reforms have been independently tested or proven effective over time.
This story continues below.
The determination does not change the audit’s original findings, including that Highlands inappropriately received more than $180 million in K-12 funding.
In 2025, the California State Auditor found Highlands had improperly received more than $180 million in K-12 funding from the state, engaged in wasteful spending, and lacked proper teaching credentialing. According to the auditor’s office, just because it was found that Highlands implemented these recommendations to address these issues, it does not mean the original findings of the audit are changed or withdrawn.
The audit also found significant problems with the way Highlands tracked and reported student attendance, which is used to determine state funding.
Highlands said it has made reforms including stronger documentation requirements, updated fiscal policies, improved oversight practices, and stronger systems for transparency and accountability.
The audit came with 40 recommendations total, but only Recommendations 10-27 were specifically for Highlands. The remaining recommendations were directed to the Legislature and agencies involved in charter-school oversight, including Twin Rivers Unified School District, the California Department of Education, the Sacramento County Office of Education, and the California Commission on Teacher Credentialing.
The recommendations directed Highlands to strengthen how it tracks and reports attendance, which affects how much state funding it receives. They also addressed independent-study records, standardized testing, and the accurate reporting of student outcomes.
Other recommendations focused on financial controls and staffing, including hiring properly credentialed teachers based on merit, preventing conflicts of interest, and requiring multiple approvals for contracts. Highlands was also directed to document that contracted services were delivered before payments were made.
“This is a meaningful step forward for Highlands,” Executive Director Jonathan Raymond said in a press release. “The work was not easy. It required stronger systems, better documentation, difficult conversations, and follow-through across the organization. We took the audit seriously, did the work, submitted the evidence, and the State Auditor has now recognized that all 18 recommendations directed to Highlands have been fully implemented.”
Raymond also expressed optimism in his written statement about the future of Highlands.
“Integrity means we do what we say we are going to do. Standards mean we raise expectations and strengthen systems. Care means we build an organization that can serve students better. Full implementation of these recommendations reflects all three.”
But the State Auditor’s Office told ABC10 that “fully implemented” has a specific meaning. Chief of Communications for the California State Auditor, Dana Simas, responded to multiple questions from ABC10 about Highlands receiving the “fully implemented” designation.
“When we designate a recommendation as ‘fully implemented,’ it means the auditee has provided sufficient evidence that it has carried out the corrective actions we recommended,” Simas said. “Determining whether those reforms are effective over the long term is different and would require new audit work beyond our recommendation follow‑up process.”
Simas also said any independent testing of new policies or systems implemented by Highlands would also require a new audit altogether, and that once the auditor’s office identifies a recommendation as “fully implemented,” it is not revisited unless a new audit is authorized by state lawmakers or other officials.
Simas added that continued evaluation of Highlands, and enforcement of the law governing California public schools now rests with Highlands’ oversight agencies, including Twin Rivers Unified School District, the Sacramento County Office of Education and the California Department of Education.
Twin Rivers Unified is the school district that holds Highlands’ charter. In a statement to ABC10 on these latest developments, a spokesperson for Twin Rivers said in part:
As chartering authority, the District’s oversight of Highlands Community Charter and Technical Schools includes review of records and reports, site visits, and ongoing monitoring of academic, fiscal, governance, operational, and legal compliance, consistent with the Education Code and the terms of the charter and MOU. Monitoring findings are documented and, where applicable, shared with the Twin Rivers Unified School District Board of Trustees in public session.
When concerns or areas of non-compliance are identified, the District addresses them through its statutory authority, which can include issuing Notices of Concern, denying a charter renewal petition where statutory criteria are not met, and/or initiating revocation proceedings.
The California Department of Education told ABC10 that charter-school oversight begins locally with the school’s authorizer. County offices of education provide the next level of oversight, while the state serves as the final tier of accountability. Highlands is also subject to an annual audit conducted by an independent auditor.
ABC10 asked whether CDE plans to compare Highlands’ attendance records with classroom activity and state funding claims. The department did not commit to conducting that review, saying it could not anticipate what might warrant additional scrutiny but would continue fulfilling its monitoring and review responsibilities.
“CDE takes the Highlands audit results very seriously,” the department said. “Effective oversight requires clear accountability at every level, sufficient authority to identify and address problems, and greater transparency to ensure public funds are being used appropriately.”
Twin Rivers’ statement did not say whether it has independently tested the new reforms or whether any concerns remain.
ABC10 also reached out to the Sacramento County Office of Education about its role in continued oversight of Highlands with this latest development concerning the state audit. A spokesperson sent back a statement reading:
“State law does not provide SCOE authority to exercise direct oversight of charter schools that have been authorized by school districts in the county, such as Highlands. Fiscal oversight of the charter school is the responsibility of the charter’s authorizing school district. The authorizing school district is responsible for adequate and appropriate oversight, including determining if a charter school is following appropriate business practices.
However, we do review the audit reports for all school districts and charter schools in the county, including Highlands, to identify exceptions and findings, and will notify the California Department of Education and the authorizing school district of any concerns we have identified. In addition, as part of our regular fiscal evaluations of the school districts in the county, we review the charter oversight policies and procedures of the districts which have authorized charter schools.”
Highlands is appealing the audit-related determination involving more than $180 million in state funding. The appeal is scheduled for an administrative hearing Oct. 19–21.
The Auditor’s Office said Highlands’ implementation of the 18 recommendations does not affect the appeal or the process for determining whether state funding should be adjusted.
Highlands also told ABC10 that it has taken individuals to small-claims court in an effort to recover money connected to spending criticized in the audit. Highlands has not identified the defendants, the cases or the amount it is seeking to recover.
WATCH THE ENTIRE SERIES: Every episode of the award-winning series that you can see any time.