OAKLAND -- American Indian Public Charter School II has the highest test scores in the city and the second highest of any public middle school in the state. But its exceptional story might come to an abrupt end this year.

On Wednesday, the Oakland Unified Board of Education will vote on a recommendation to close the school, which has about 300 students in grades 5 to 8.

Staff members with the Oakland school district's charter schools office cited a host of reasons for the recommendation to reject the school's charter school renewal application. At the forefront is an ongoing state investigation into allegations of fraud and other illegal activity at American Indian Model Schools, the organization that manages this charter school and two others. School district staff say investigators with the Fiscal Crisis & Management Assistance Team are reviewing more than $3 million in questionable transactions by the organization during a recent three-year period.

Late last year, a former employee's claims of financial misappropriation and cover-up prompted the district and county superintendents to request a special audit. The former employee said funds for an after-school program were redirected to a company owned by Ben Chavis, the organization's director.

A progress report provided to county officials last week says the audit team found, among other "preliminary concerns," questionable credit card expenditures; it also has evidence to suggest that Chavis was paid during a time when he was not involved in the school's day-to-day operations.


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The auditors also said they had determined that the school's governing board had "no involvement" in overseeing the school's finances. "When an organization lacks internal controls and governing board oversight is minimal, the likelihood of fraud greatly increases," the lead auditor wrote in a March 28 letter to Alameda County Superintendent Sheila Jordan.

The full report isn't expected to be completed until the end of the month.

Alice Spearman, an Oakland school board member, said she doesn't believe closing the school is an appropriate response to the ongoing investigation -- "even if it turns out to be true."

"Nothing has been proven yet," she said. "The school is not fiscally unsound, they have a million dollars in the bank, and their academic progress is unprecedented in this city."

The American Indian Public Charter School II had a composite state test score of 990 out of 1,000 possible points in 2010-11, as did the original middle school.

The original American Indian charter school opened in 1996 to help the city's Native American students and others who were struggling in the traditional system. Chavis took over in 2000 and later added a high school and second middle school, American Indian Public Charter School II. (As of 2010-11, only two of the students at the original school and none of the students at the second middle school were Native American.) The newer middle school leases a building in downtown Oakland from Chavis; it's owned by one of his companies.

The first American Indian middle school received a National Blue Ribbon Award in 2007, a distinction given to the top public and private schools in the nation. But while many praised Chavis for the schools' academic performance, he drew scrutiny for his unorthodox disciplinary practices and incendiary treatment of some students, teachers, parents and visitors. The most famous example was an assembly in which he shaved a student's head as punishment for stealing. (The student later said his mother gave permission first.)

Chavis formally stepped down in 2007 after a district investigation into the complaints against him, though he said he had already been planning to retire to Arizona. In 2009 he published a book, "Crazy Like a Fox: One Principal's Triumph in the Inner City," about his approach to education. He returned to American Indian last fall as director, and quickly stirred controversy by adding a fifth-grade class at the end of October.

Chavis did not immediately return a phone call seeking comment.

Troy Flint, a spokesman for the Oakland school district, said the school has not complied with many of its previous agreements, and that it appeared its board had no plans to remedy the numerous legal issues the district had raised.

Still, he described the decision as "an agonizing choice."

"It's very difficult in the current environment, especially at the middle and high school level, to propose closing any school that's high performing," Flint said. "I don't think the charter school office made this decision lightly."