The California state auditors found all four Magnolia Public Schools reviewed "grossly" underreported truancies – errors the charter network said it is addressing.
One Magnolia school, Academy 5, reported no truancies in the 2012-2013 school year, but in a report released Thursday, the auditors discovered the rate was more than 30 percent.
State auditors said the errors "could mislead parents of potential students and other interested stakeholders regarding the school environment."
Auditors also found issues with payroll and vendor payments, but concluded the once-struggling charter network was solvent as of July 2014
Magnolia's CEO Caprice Young said her staff didn't fully understand the state's truancy definition and are making corrections. Young said the truancy errors did not impact the organization's public school funding tied to average daily attendance, which she said is calculated separately.
The Los Angeles Unified School District moved to close two Magnolia Public Schools' eight campuses last year after the district's inspector general found missing and misused funds.
Magnolia disagreed with many of the findings and fought the closures in court with the help of the California Charter Schools Association.
Los Angeles County Superior Court Judge Luis A. Lavin sided with the charter network, and the schools remain open.
State auditors agreed "LAUSD may have acted prematurely when it rescinded its conditional approval of two academies," because it did not give Magnolia "sufficient time to respond to its criticisms."
"Was this vindicating? Absolutely!" Young said. "Do we have a lot of work to do? Yes."
Late Thursday, LAUSD issued a statement, saying it “acknowledges the actions on the part of the new leadership of Magnolia Public Schools to address the substantive concerns that the District raised in fulfillment of its oversight responsibilities.”
The District will follow through on its stated responses to the Auditor’s recommendations as part of our ongoing commitment to high quality charter school authorizing, as well as monitor Magnolia’s implementation of its action steps. As noted in the Audit, the District and Magnolia Public Schools were able to reach a settlement that allows both parties to move forward together in the best interest of students and in protection of taxpayers’ trust.
This story has been updated.