OAKLAND (CBS 5) — The state is taking action against the Oakland Unified School District, because of a private religious school that has been taking taxpayer money, while students are sent out to panhandle.

A joint CBS 5 and California Watch investigation found Saint Andrew Missionary Baptist School inflating attendance numbers to get federal funds. Meanwhile, students are still out on the streets asking for money.

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It’s turning into a nasty finger-pointing battle to discover who is responsible for the private school, which is located in West Oakland.

Multiple state and local agencies are scrambling to find out how the private school has remained open and how it received federal funding, despite the ongoing scrutiny.

The CBS 5 investigation started two years ago when we spoke with the panhandling kids and they told us that they were being mistreated by the school leaders. Since then, we have teamed up with California Watch to follow the money trail.

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CBS 5 Report On School With Panhandling Students
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School Board Hears From Parents Of Panhandling Students

Last week, a CBS 5 undercover camera discovered that the students were still out panhandling at Oakland’s busy Rockridge BART station. School pastor Robert Lacy Sr. was seen in his pressed suit, watching from the shadows. When he saw our producer, he said, “Are you taking pictures of us? I’m gonna call the police if you are.”

The last time we saw Lacy and his son Robert Lacy Jr., they didn’t want to talk to us either. It was just outside the Oakland Unified School Board’s building on June 13th. CBS 5 caught up with them after an emotional meeting, during which angry parents of former Saint Andrew students blasted the school district for its lack of action.

After the parents complained of abuse and neglect, the district launched an investigation. According to Oakland Unified School Board member Noel Gallo, the district will stop funding to Saint Andrew if it finds that the federal funds were misused.

CBS 5’s investigation also found that the school was forcing its students to panhandle at night while raking in hundreds of thousands of federal education dollars. It partially managed to do so by inflating class size.

The school claimed to have 195 students, but we found a paper trail showing they have fewer than 20. That claim has allowed them to receive up to $50,000 in taxpayer money annually for the past 12 years.

So how is it possible that this private school has been getting public funding?

CBS 5 asked the California Department of Education’s Director of Communications, Paul Hefner. He said that private schools are allowed to get money under the No Child Left Behind act, but how much is determined by the Oakland Unified School district.

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Hefner said that the district is responsible not just for distributing the funds. “They’re responsible for monitoring those funds, for supervising the use of those funds, for making the determination with regard to eligibility and again deciding who it chooses to work with in the provision of those services,” he said.

However, district spokesman Troy Flint disagrees. He fired back and said, “I would expect them (state officials) to say that because it’s self-serving, and it allows them to pass off the responsibility to the local school districts.”

Flint pointed out that the district bases the funding for Saint Andrew on enrollment numbers that the state collects from the school in a sworn affidavit.

“We have responsibility for managing contract implementation, but in terms of the level of funding, that is based on the enrollment which is determined by CDE, the agency that collects the affidavit from public schools, certifying that that’s the number of students attending,” Flint said.

But is the state supposed to verify the numbers like the district suggests? According to its website, it’s not. It clearly states, “…the information filed in the affidavit is not verified and the (California Department of Education) takes no position as to its accuracy.”

Neither agency is taking full responsibility. In the meantime, both the state and the local district are investigating independently.

CBS 5 has just learned that the state has moved up its regular review of the Oakland Unified School district because of our reports. A monitor will be sent out in September to check and see if the district was in compliance with federal guidelines when it distributed money to Saint Andrew’s. Originally, the monitor was not scheduled to arrive until January of 2013.

If the state finds that the district is not in compliance, Oakland Unified may have to pay back some of the money.

Hefner said, “If there’s a finding that money was spent out of compliance then what would happen is the district would have to use its general fund dollars to refund those federal dollars that would be used to provide services in Oakland.”

The state could force the district to pay back all the money that was misused for as long as it was out of compliance. In this case, that could be as long as 12 years.

Other agencies outside the field of education are now getting involved. The panhandling students get a monthly permit from BART in order to solicit funds. Two BART directors are currently trying to remove the permits.

Also, the Oakland Fire Department has found a number of violations at Saint Andrew. They range from a lack of smoke detectors and exit signs while having dangerously exposed wires.

The investigations may be in full swing, but the school continues to operate. The men who run the school, the Lacys, have yet to answer any of our questions about whether they purposefully misrepresented their enrollment numbers to get more federal cash.

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