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Credit: Pexels \/ RDNE Stock project<\/p>\nCredit: Pexels \/ RDNE Stock project<\/p>\n
\u00a0This story was originally published by EdSource. Sign up<\/a> for their daily newsletter.<\/p>\n California\u2019s attempt to crack down on charter school fraud has hit a wall, at least for now.<\/p>\n Gov. Gavin Newsom\u2019s veto Monday of\u00a0Senate Bill 414<\/a>\u00a0leaves major oversight gaps in place for at least another year, despite bipartisan support and mounting concerns over charter school financial misconduct.<\/p>\n Six years after the operators of A3 charter schools were indicted for stealing more than $400 million in public funds, lawmakers had hoped to pass sweeping reforms aimed at preventing similar schemes.\u00a0<\/p>\n In his\u00a0veto message<\/a>, Newsom said the bill is too costly and overlooks some of the recommendations by a\u00a0task force<\/a>\u00a0convened to investigate systemic weaknesses exploited by A3 and operators of other nonclassroom-based [partially or entirely online, independent study or homeschool] charters.\u00a0\u00a0<\/p>\n \u201cI deeply appreciate the efforts of the author and the negotiating parties to develop legislation that builds on these recommendations,\u201d Newsom wrote. \u201cHowever, this bill falls short.\u201d<\/p>\n The governor did not specify what was missing from the more than 100-page bill, which passed with two-thirds of Assembly members and 60% of senators.\u00a0<\/p>\n \u201cThe \u2018falling short\u2019 language mystifies me,\u201d said Eric Premack, executive director of the Charter Schools Development Center, a nonprofit support and advocacy organization. \u201cIf anything, it goes overboard.\u201d\u00a0\u00a0<\/p>\n Newsom\u2019s office declined to elaborate, responding only that \u201cthe Governor\u2019s veto message speaks for itself,\u201d in an email to EdSource.<\/p>\n Premack was involved in the lengthy negotiations to combine SB 414, which was backed by charter advocates, and\u00a0Assembly Bill 84<\/a>, which had the support of teachers unions and other labor organizations.\u00a0<\/p>\n Negotiators kept the governor\u2019s office abreast of the talks, said Premack, but reported back that the staff were in \u201clistening mode\u201d and did not provide substantial feedback or indicate the governor\u2019s position.\u00a0<\/p>\n As the 2025 legislative deadline closed in for amending bills, negotiators said they had resolved about 90% of their differences, but the remaining issues proved intractable. When\u00a0talks broke down<\/a>, Assemblymember Al Muratsuchi, D-Torrance, withdrew AB 84 with plans to reintroduce it in the next legislative session.\u00a0\u00a0<\/p>\n Sen. Angelique Ashby, D-Sacramento, SB 414\u2019s author, was expected to do the same, but instead sent her bill to the Assembly, where it was amended to include the items agreed to during negotiations. As one of its final votes of the 2025 session, the state Senate approved it the following day and sent it to the governor.\u00a0\u00a0<\/p>\n \u201cAlthough we are disappointed in the Governor\u2019s veto, we are proud of the broad coalition that helped advance this bill and the significant progress we made together,\u201d said Myrna Castrej\u00f3n, president and CEO of the California Charter Schools Association, in a\u00a0statement<\/a>.<\/p>\n Newsom also cited cost concerns for his veto, pointing to federal cuts to education, health care and social programs.\u00a0\u00a0<\/p>\n \u201cWhile the oversight and auditing provisions are meaningful, other sections are unworkable, would face legal challenges, and require hundreds of millions to implement,\u201d he wrote.<\/p>\n Although not mentioned in the governor\u2019s veto message, one major cost driver was the creation of an Office of the Education Inspector General, envisioned as an independent agency to investigate allegations of financial misconduct. Legislative analysts estimated the office would cost about $13.5 million annually out of the state\u2019s $325 billion budget.<\/p>\n Leon Schorr, who led the A3 charter school investigation as assistant chief of the San Diego District Attorney\u2019s Special Operations Division, said California needs a dedicated education finance watchdog, either as an independent agency or housed within the state Attorney General\u2019s Office.\u00a0\u00a0<\/p>\n \u201cNo (district attorney\u2019s) offices, San Diego included, have the bandwidth to keep up with all the complaints we get,\u201d Schorr said. \u201cThere\u2019s still misuse of school money that could be uncovered and save substantial taxpayer dollars if there were more transparency and better statewide enforcement.\u201d<\/p>\n The California Teachers Association, which argued that even the amended version of SB 414 did not do enough to crack down on fraud in nonclassroom-based schools, urged the governor to veto it. \u201cWe are firmly committed to the critical work of addressing the need for oversight and transparency in California\u2019s nonclassroom-based charters,\u201d CTA President David Goldberg said in an email to EdSource.<\/p>\n Those efforts will now have to wait until lawmakers return in January 2026.<\/p>\n