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Exhibit 5

LA Times: L.A. Unified ends effort to close embattled charter schools

03/11/2015

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L

OCAL / L.A. Now

L.A. Unified ends effort to close embattled charter

schools

By Teresa Watanabe Contact Reporter

MARCH 11, 2015, 3:10 PM

os Angeles Unified has dropped efforts to shut down three campuses operated by an embattled charter

school chain accused of financial irregularities in a district audit.

Caprice Young, chief executive officer of the Magnolia Public Schools, hailed the Board of Education fo

enewing the charters of campuses in Palms, Northridge and Bell under a legal settlement approved this week.

Charters are independent, publicly funded campuses; most are non-union.

The statewide charter organization, which enrolls 4,000 students in 11 academies focused on science and math, h

denied allegations of financial mismanagement and sued the districtlast year to overturn the decisions to close t

ampuses. A court injunctionhas kept them open.

Kindergarten teacher Claudia Garcia, left, gives instructions as students work on projects at Magnolia Science Academy #7 in Northridge, w

s one of three schools ordered shut down by the L.A. Unified School District last year. The school board has dropped efforts to shut the schown. (Anne Cusack / Los Angeles Times)

L.A. Unified ends effort to close embattled charter schools - LA Times

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This is just plain good news and will give the schools the stability they need," Young said Wednesday. "I am

hankful to LAUSD for giving us the opportunity to let us do our job well."

Under the settlement, Magnolia agreed to bring in a new auditor and an educational services provider and subm

iscal oversight by a state financial management organization. An audit performed last year for the districts Offic

of the Inspector General found that Magnolia was $1.66 million in the red, owed $2.8 million to the schools it

oversees and met the federal definition of insolvency. The Palms academy also was insolvent, the audit found.

n addition, the review found fiscal mismanagement, including a lack of debts disclosure, weak fiscal controls ov

he principals use of debit cards and questionable payments for immigration fees and services.

Since then, Magnolia hired Young, a former L.A. Unified school board president, along with a new chief financial

officer and controller. The organization also has added new controls over spending, staff training and other

mprovements.

It's actually very common for charter organizations to face operational challenges when they've just come throu

a heavy growth period," Young said. She added that Magnolia was now "fiscally stable and sound."

District officials have acknowledged that the Magnolia schools are performing well academically, with test scores

well above the state's target of 800 on the 1,000-point Academic Performance Index.

oung added that the foundation has taken other steps to address concerns raised in the audit, including freezin

he use of H1-B visas to bring in foreign teachers and administrators. Young said Magnolia schools currently emp

1 staff members on such visas but that she hoped to work with L.A. Unified to improve the process before

ontinuing it.

She also dismissed concerns that the schools may be improperly influenced by a U.S.-based Turkish cleric,

Fethullah Gulen. Critics have asserted that the Magnolia schools are among more than 100 campuses with ties to

Gulen and seek to cultivate pro-Turkey sentiments.

I think it's unfounded," she said of the criticism. "I wouldn't criticize anyone of any ethnicity or national origin f

tarting a great school."

She noted that 85% of Magnolia students were Latino, many of them low-income. She said programs to share

Turkish culture through language study and other programs would enrich students, just as other charter schools

offer classes in Arabic, German, Spanish and French. She also said the schools follow California learning standar

which require lessons about the Armenian genocide at the hands of the Ottoman Turks.

oung said the campuses in Bell and Northridge have extensive waiting lists, and the Palms school is near capaci

Twitter:@TeresaWatanabe

Copyright 2016, Los Angeles Times

This article is related to: Charter Schools, L.A. Unified School District, Bankruptcy

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