L.A. District Revokes Pact of Dropout Charter School : Education: Action is taken amid reports of debt and disorganization. It is the first such failure in U.S.

Saying that the independent school for dropouts had become hopelessly disorganized and debt-ridden, the Los Angeles Unified School District board reluctantly revoked Edutrain Charter School’s contract Monday evening, marking the first charter failure in the nation.

The board gave the Downtown school--organized by educators and business leaders in 1993--the exclusive opportunity to reapply for one of the district’s 10 charter school slots before April.

But today district officials will take the first step toward shutting the school by interviewing its more than 200 students for possible placement in other public schools and independent study programs.

In canceling the charter contract on a 5-2 vote, the board rejected Edutrain’s plea for an additional three months to complete an extensive reorganization.

“When you violate our trust, the consequences are not one more chance,� said board President Mark Slavkin.

Winston Doby, president of Edutrain’s board of governors and a UCLA vice chancellor, said the board’s decision was unfair and did not acknowledge vast improvement since enrollment accounting irregularities were first uncovered last spring. Doby said Edutrain’s board will meet tonight to consider legal action.

“Everyone deserves due process and there has been no due process,� he said.

What will become of Edutrain’s debt--estimated by its own administrators at nearly $1 million--remained unclear Monday because of vagaries in state charter school legislation.

Charter law, passed in California in 1992, allows public schools to operate largely independent of district control, with the permission of the local school system. The contracts hold for five years, but may be revoked by the district if the school violates any of its own conditions.

In the case of Edutrain, district general counsel Rich Mason said violations included poor record-keeping in the areas of enrollment and financial expenditures and an inability to prove that it has met its academic goals.

Edutrain’s closure is a blow to the nation’s charter school movement--which has allowed 140 schools in five states to shed bureaucratic control--because it raises questions about whether less oversight is better.

So far, none of the other charter schools have failed, although eight in Michigan currently are in limbo after a judge’s ruling that charter law illegally usurps that state’s authority over public schools.

Yet some national charter proponents took the Edutrain news in stride, saying that the independent schools must be held accountable.

“The difference is, if charters fail, they will close,� said Barbara Barrett, director of a Michigan group that is fighting the judge’s ruling. “We have many regular schools that have been able to stay open whether they have been able to deliver or not.�

Edutrain began as a school in July, 1993, after Los Angeles Unified agreed to the conversion of an independent study program known as Edutrain Inc. Its goals were laudable: design a program and create a culture that would be attractive to the city’s most hard-core dropouts.

With shorter school days, on-site child care and a staff interested in solving personal as well as educational problems, Edutrain managed to attract more than 500 students by last spring. About 85% of the student body had arrest records and many students had been out of school for years, yet 68 of them graduated in June.

Then the patina of success began to tarnish, beginning with the random visit in May of a state financial auditor who uncovered large discrepancies between school enrollment reports--on which funding is based--and actual numbers of students in classrooms and roll books.

As outside scrutiny of Edutrain grew, so did disorganization and infighting, school teachers and administrators agree. By fall, the problems had manifested themselves in a dwindling student enrollment--to about 100 full-time students--the flight of several of the founding teachers and the layoffs of many more teachers, staff members and student workers.

“Edutrain to me was like a second home,� said Heather Jackson, a single mother of two who stayed on as a paid intern after her June graduation, only to be laid off in October. “No one ever gave us any kind of notice that our jobs were in jeopardy. Now I’m looking for a job and Christmas is around the corner.�

The sympathies of the Los Angeles Unified school board began to wane amid allegations contained in an Edutrain board-commissioned audit that while teachers lacked essential supplies, administrators treated themselves to significant perks: a school-leased $39,000 sports car, $500-a-month housing allowance and a bodyguard for the principal, a secret $7,000 retreat to Carmel for select staff members and a well-furnished administrative floor.

The vote to revoke came on the heels of federal indictments of the director and a consultant at another independent study program, the Institute for Successful Living, on charges of bilking Los Angeles Unified out of $700,000 by overestimating enrollment.

Although no intentional wrongdoing has been alleged at Edutrain, it was apparent Monday that the recent indictments heightened board members’ concern that they act quickly in response to reports of financial mismanagement.

As public discussion began to focus on Edutrain’s spending decisions, its board president, Doby, doggedly continued to try to turn the debate back to the school’s successes and the reorganization plan he had helped fashion, which called for replacing the top administrators and breaking the school into two smaller, more manageable pieces.

And even after Monday’s vote, Doby remained hopeful that a compromise could be reached, perhaps one under which the district would assume control of Edutrain.

“It may very well be that we can arrive at an alternative,� he said.