After hours of public comment and an extended debate, the Oakland school board voted to keep American Indian Public Charter School II open -- despite a pending financial investigation and against the recommendation of the district's charter school office.

Before an overflow crowd of students and parents, district staff gave a litany of reasons for rejecting the school's charter renewal, from a lack of governing board oversight to potential conflicts of interest to allegations of financial fraud. But the school's near-perfect test scores -- 990 out of a possible 1,000 points on California's Academic Performance Index, the second-highest of any middle school in the state -- proved to be its trump card.

"We don't have one school in the Oakland school district with that kind of score," said board member Alice Spearman, who has described the founder, Ben Chavis, as a friend. Spearman added, "I, for one, don't want to be on CNN as part of a group of people that can't even see beyond."

The downtown Oakland middle school is one of three schools run by an Oakland-based nonprofit organization, American Indian Model Schools, which offers a highly structured and academically demanding environment.

An ongoing financial investigation into the organization is not complete, as supporters repeatedly reminded the board Wednesday. But in a recent progress report, auditors from the Fiscal Crisis & Management Assistance Team reported finding preliminary evidence of financial irregularities and potential conflicts of interest involving Chavis, who also owns the school buildings, and his wife, Marsha Amador, who until recently was the school's financial administrator.


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Oakland school district staff members say state auditors plan to more closely inspect some $3 million in transactions, including: $500,000 in checks to Chavis' businesses for school construction projects; more than $100,000 in checks, cashed by Chavis, for the school's mandatory summer institute; and annual payments of $100,000 while he was no longer involved in day-to-day operations.

Chavis announced his retirement in 2007 and returned to the school, full time, in 2011. He said he was a paid adviser during the years in between. The audit team reported that it will also look into questionable credit card purchases, why the school paid vehicle registration fees when it doesn't have vehicles, and why bank accounts were closed and opened without permission of the governing board.

The president of American Indian's governing board, Michael Stember, categorically denied all of the allegations of mismanagement. He wasn't prepared to discuss many of the specifics, however. After he was called to the podium to respond to the concerns outlined in the staff report, Stember quickly delegated that portion of the presentation to school staff members. When Oakland Unified board members insisted that Stember himself respond, he called on the school's new financial administrator to help him answer the questions, saying he couldn't read her notes. He then stood by as she presented the information.

Stember emphasized that the school's governing board was new and that it was working to implement the internal controls recommended by the auditors.

The public speakers who turned out Wednesday spoke overwhelmingly in support of the school, saying the city's public school system offers nothing like it. If there was wrongdoing, many argued, the violators should face consequences, not the students.

"This school is necessary. It needs to be here," said Thunder Aung, student body president at American Indian Public High School.

In the end, the board voted 4-3 to renew the school's charter for another five years on the condition that the organization train its governing board, institute stricter accounting measures and return in two years to prove it had done so.

Spearman made the motion, and board members Noel Gallo, Chris Dobbins and Jumoke Hinton Hodge supported it. David Kakishiba, Gary Yee and Jody London did not, citing concerns about the capacity of the school's governing board to properly oversee the school's operations and publicly funded dollars.

As a result of the renewal, the school, now serving about 300 children in grades 5 to 8, will also be allowed to expand to include elementary school grades in the fall.

Michael Mei, a 10th-grader at American Indian Public High School whose younger sister attends American Indian Public Charter School II, was one of the many people who stayed until the end. Until the roll call, the decision seemed like it could go either way.

"I just felt very lucky that we won," he said. "It was a very close game."

Read Katy Murphy's Oakland schools blog at www.IBAbuzz.com/education. Follow her at Twitter.com/katymurphy

to be investigated
Oakland school district officials say they will audit $3 million in transactions involving American Indian Public Charter School II, founded by Ben Chavis. Here's an audit breakdown:
$500,000: Amount in checks to businesses owned by Chavis for school construction projects
$100,000: Amount in checks cashed by Chavis for the school's mandatory summer institute
$100,000: Amount in annual payments while Chavis was no longer involved in day-to-day operations