SACRAMENTO—State Superintendent of Public Instruction Tom Torlakson announced Thursday that the California Department of Education has contracted with the State Controller’s Office to conduct an audit of California Virtual Academies (CAVA) and related charter schools because of serious questions raised about a number of their practices.

 “The goal of the audit is to make sure these schools are spending public education funds properly and serving their students well,” said Torlakson.

In 2015, CAVA’s corporate parent K12 paid its CEO Nathaniel Davis $5.3 million and CFO James Rhyu was making $3.6 million. Their base salaries were $700,000 and $478,500, respectively, which were dwarfed by additional pay and stock for their “performance.”

In all, K12’s five highest paid executives received a total of more than $12 million in compensation last year. That’s one of the reasons Center for Media and Democracy has called K12 Inc.’s former CEO, Ron Packard, the highest paid elementary and secondary school educator in the nation.

Nearly 90% of K12’s revenues–and thus its huge pay for executives–comes from Americans’ state or federal tax dollars.

Torlakson said that under the terms of the audit, the State Controller’s office will conduct a review of CAVA and related charter schools to verify whether these non-profit schools:

•  Are organizationally separate from K-12, Inc. a for-profit company that these non-  profit charter schools contract with.
•  Accurately reported attendance, enrollment, and dropout graduation rates to the California Department of Education.
•  Appropriately allocated and reported shared expenses.
•  Appropriately identified, accounted for, and disclosed related-party relationships.

 The audit is expected to be completed by March 2017.