SACRAMENTO, Calif. — Watch all four episodes of this ABC10 Originals investigation here.
“We’re growing when everyone else is shrinking,” Doc Smith told staff at the Highlands Community Charter and Technical Schools December 2023 holiday party, hosted at Top Golf in Roseville.
Smith – the leader of the charter school – talks about growing enrollment a lot, especially in staff meetings which recordings of were provided to ABC10.
“We’re adding a lot of people. We’re adding sites,” said Smith in a 2023 staff meeting.
Like all public schools, Highlands gets money for attendance. For the 2022-2023 school year, records show Highlands received $136,220,347 for attendance.
This school year they’re on track to make more. In their December 2023 board meeting, they estimated receiving $170.2 million in revenue for the 2023-2024 school year.
It’s a lot of money for a lot of students. Highlands has around 15,000 adult students – most are immigrants.
But over 30 employees ABC10 spoke with for this investigation said there’s a problem. The education students are getting isn’t reflected in how much money the school is generating.
“Look at their graduation rate,” said a former Highlands administrator. “It’s abysmal.”
For the 2022-2023 school year, records show Highlands served 16,628 students in-person and online. Of that, the school says 2,229 were eligible to graduate – and only 448 did. That’s just 20%.
The school also offers trade programs like truck driving and cosmetology – but only 6% of students got a job in the field Highlands trained them in, school records show.
“Adult education has low graduation rates,” said the administrator.
Concerned about retaliation, some sources agreed to only go on-the-record if we protected their identity. That's why we've withheld some sources' names.
The administrator said adult schools have low graduation rates because students balance families and jobs. But even for adult education, Highlands’ graduation rate is way too low, the administrator said.
“That number that actually benefits is so small for the amount of money that’s coming in,” said the administrator.
And yet, Highlands – a charter school from north Sacramento – keeps growing, opening new sites across the state, as far away as San Diego.
The school is allowed to operate outside its school district, Twin Rivers Unified, due to a 2014 law known as the Work Force Innovation Act.
“During staff meetings we would always hear there’s a new campus opening,” said former Highlands teacher, Elke Dameson.
More sites means more students, more students means more money. Critics inside Highlands tell ABC10 the school’s leaders are capitalizing off immigrants rather than truly educating them.
Smith disagrees. He insisted students do get the education tax dollars are paying for.
“It’s a place for them to have a better life for their family,” said Smith. “That’s what the taxpayer wants for their education system.”
On its website, Highlands has a list of core values – one being to “save taxpayers money.”
Yet in just five months – between July and November 2023 – Highlands contracts show the school spent $21,973,277.98.
Their spending included $415,910.58 in consulting fees.
For technology like cell phones, service plans, phone cases and tablets, Highlands paid $8,678,296.91 in that five months, records show.
“Education and the actual student learning experience has never been a priority for leadership at Highlands,” said Lindsay Curtis, who was Highlands’ Homeless Services Coordinator at our time of interview. “It’s just been what it looks like. Like, ‘Oh we gave 1,000 Chromebooks to students – every student gets a phone…’ That’s great! But are you going to give teachers what they need to actually be successful in the classroom? Because I never saw that.”
During our interview with Smith, he said he’s buying 19,000 Google Pixel Fold phones for students, but records show only 448 graduated last year.
“Show me the data that says it’s working,” said one current Highlands teacher. “We have absolutely zero consistent or reliable data that is linked to student outcomes.”
So, as more sites open, who ensures the school is truly educating its students? Who is monitoring how tax dollars are being used?
Three organizations are supposed to be minding the store.
First, Highlands has a board of directors.
HIGHLANDS BOARD OF DIRECTORS
The board must approve consulting contracts over $100,000 and purchases over $1,000,000, the school’s policy states.
ABC10 sat in on six months of board meetings – from July 2023 to January 2024 -- and found the board appears to have little involvement in the spending.
In the list of contracts ABC10 obtained through a public records request asking for consulting contracts of $25,000 or more -- we found there's funds going a lot of different places.
In five months, Highlands spent over $415,000 on consulting contracts, that record showed, and per their policy the Highlands board only needed to approve one of those items - a $130,000 contract with the California Asian Pacific Chamber of Commerce - and yet, we could not find any approval in the board's meeting minutes, even after reviewing the minutes for every meeting held over the last four years, from March 2019 to October 2023.
“I remember sitting in board meetings,” said former Highlands counselor Jeanette Rowe. “A point of inquiry for a lot of people was funding. Like, ‘Where’s this going? How are we allocating this money?’”
The board is not overseeing the school’s spending, sources say, giving Highlands Executive Director Doc Smith control over expenditures.
The school’s fiscal policy shows his spending power – Smith signs all checks and bank accounts, approves grant submissions and “oversees the adherence to all internal controls.”
Unlike a school district board – the nine charter school board members aren’t elected and there’s no limit to how many times they can be re-appointed.
Only four board members have experience in education, their online bios show.
“We have board members whose children work here,” said the teacher. “Why would they regulate anything that impacts their children?”
Two board members are parents of Highlands employees, sources said.
“It’s like cops marry cops. Teachers marry teachers – because of the schedules,” said Smith. “We don’t have a nepotism problem.”
Smith told ABC10 nepotism is not a problem – but as we showed you in part two of this investigation, he acknowledged he hires family members of employees.
“If that’s nepotism by definition, but not by productivity because they’re amazing,” said Smith.
Having board members’ children as employees, including on Highlands’ leadership team, makes staffers afraid to go to the board with concerns. Several also told us they don’t feel they can go to the Twin Rivers Unified School District – the second organization that’s supposed to oversee Highlands Community Charter and Technical Schools.
TWIN RIVERS UNIFIED SCHOOL DISTRICT
“We were instructed not to talk to Twin Rivers. Like if I went and (wanted to) complain to Twin Rivers, we were instructed not to,” said the former Highlands administrator. “When they (Twin Rivers representatives) would come (to Highlands), we were given talking points.”
Twin Rivers Unified School District authorizes Highlands Charter and Technical Schools, but with locations throughout the state as far as 500 miles away, ABC10 wanted to know how does the district regulate those?
“There’s new sites being opened all the time,” said former Highlands teacher Ali Diaz. “Whether there’s actual students and teachers there, none of us know.”
We found Twin Rivers Unified may not know either. School district records show in the last six years – between January 1, 2018 and November 17, 2023 – Twin Rivers Unified has not visited a single Highlands site outside Sacramento.
courtesy: Twin Rivers Unified School District
For all of 2023, they visited only five Sacramento sites out of the 60 across the state – all on the same day – at the start of the year, Jan. 19, 2023.
Twin Rivers Unified declined several requests for an on-camera interview. In a written response, the district said its “oversight exceeds the legal requirement.” We’ve included Twin Rivers Unified’s full statement at the end of this article.
Staff we spoke with said Highlands and Twin Rivers Unified are too connected for the school district to provide real oversight.
“Some of the people who work (for Highlands)… they were board members for Twin Rivers,” said the administrator.
Like Linda Fowler – introduced in part one of this investigation. The long-time Twin Rivers Unified Board Member is also a Highlands employee, despite previously being found in violation of conflicts of interest by the Fair Political and Practices Commission related to her relationship with the two entities.
“What it is she does for us, no one knows,” said the teacher.
When asked, Fowler sent us a statement we’ve put in-full at the bottom of this article that included the California Education Code on charter schools, and saying Twin Rivers doesn’t dictate Highlands’ hiring decisions and the two are separate entities.
Highlands also paid $36,277.24 to California School Inspections, LLC – the consulting business of the former Twin Rivers Superintendent Bill McGuire, for just five months of work between July and November 2023, records show.
But the biggest issue with the school district, sources said, is when Highlands makes money – Twin Rivers Unified gets a share.
“We make Twin Rivers money,” said Diaz.
When a school district authorizes a charter school, the district gets a percentage of the school’s annual funds – it’s called an authorizer fee.
Over the last five school years, Twin Rivers Unified received $9,522,185.90 from Highlands Community Charter and Technical Schools, school records show.
That may not be all. According to Twin Rivers Unified School District’s “Monitoring Charter School Performance Policy,” the district can receive funds from charter schools it oversees in several ways.
ABC10 requested the amount of all funds Twin Rivers Unified has received from Highlands Community Charter and Technical Schools for the last four school years in a public records request filed in December 2023. At our time of reporting, the school district had yet to provide the responsive records. This web story will be updated when the school district provides ABC10 the requested information, as required by law.
While the authorizer fee is a small portion of the school district’s overall budget, it’s far more than the authorizer fees the district gets from the two other charter schools it oversees. Records show that for its authorizer fee for the 2022-2023 school year, Gateway Charter School generated Twin Rivers $457,758 and Heritage Charter School generated $124,772.09.
The amount of money Twin Rivers Unified gets from Highlands protects the charter school from district scrutiny, sources said.
“The money helps the district,” said the administrator. “So that would be kind of like a lifeline that you would take away.”
We asked Twin Rivers Unified how they can provide oversight while getting millions from Highlands.
The district said, in-part, it goes “well beyond” oversight requirements by doing annual reports and interviewing school officials.
That’s why the district is entitled to an authorizer fee, it said, which “does not present a conflict.”
For our investigation, ABC10 spoke with over 30 current and former Highlands employees both on and off camera. We brought their concerns to Twin Rivers Unified.
The school district responded saying, “There may be those who feel compelled, for whatever reason, to make allegations and cultivate chaos and district in an effort to undermine an organization or its leaders…”
The district said it has received no formal complaints from Highlands employees, but if someone did submit a complaint or concern, Twin Rivers admitted it wouldn’t necessarily act, but the complaint “would be referred back to Highlands.”
“So, no. There was nowhere I felt comfortable - there was nowhere to go,” said the administrator.
“It’s obvious as to why Twin Rivers would turn a blind eye… why would they ruin a good thing?” said Diaz. “Nobody can believe these types of things are happening. Any time I’ve shared any of this they go, ‘Well that can’t be. A school can’t operate that way. That’s not possible because we have audits.’”
Five years ago, Highlands got a serious audit, one that usually makes school administrators nervous. It came by request of the Sacramento County Office of Education and was conducted by The Fiscal Crisis and Management Team, known as FCMAT.
“Once a FCMAT is initiated, usually schools are shut down,” said the administrator.
Highlands wasn’t, even though the FCMAT audit flagged all kinds of problems from “sexual harassment” to “potential fraud.”
“It was due to, I believe, political connections… why it stayed open,” said the administrator.
Highlands puts time and money into keeping political ties. During ABC10’s interview with Doc Smith, he said the school’s leaders took trips to Maui, Pebble Beach and France for lobbying reasons.
“Those places we go to because we have to convince legislators,” said Smith. “It’s not a bunch of throwaways.”
He said paying for these trips is "the cost of doing business."
The school spent over $652,500 on lobby and legislative groups between July and November 2023, records show.
The FCMAT audit said it had “insufficient evidence” to prove fraud at Highlands, but the audit relied on voluntary information and statements from employees, FCMAT CEO Mike Fine told ABC10.
Employees who told us they’re afraid to speak up.
“Any time anyone voiced an opinion or some pushback, that person would usually just disappear,” said Diaz.
“That threat looms over all our heads,” said the teacher.
The FCMAT audit did give repeated examples of what it called “illegal fiscal practices.”
“Significant material weaknesses in the charter’s internal control environment increase the probability of fraud and abuse,” the FCMAT audit said, and that “multiple, serious internal practices need adjustment or correction.”
CALIFORNIA DEPARTMENT OF EDUCATION
ABC10 went to the California Department of Education. The state agency would not go on-camera but did agree to a phone interview with Elizabeth Sanders - Director of Communication, Erika Torres – Deputy Superintendent of Public Instruction and Susan Park – Charter School Division Director.
“I do want to share with you, we take this very seriously,” said Torres.
We asked them a number of questions about the California Department of Education’s role in oversight. They repeatedly pointed back to Twin Rivers Unified School District.
“The charter authorizer is really responsible for all oversight duties,” said Torres.
Park also noted multiple times throughout our call how Twin Rivers was responsible for reviewing, authorizing and analyzing duties of Highlands.
That frustrated current Highlands employees we spoke with. Their message to the California Department of Education was simple: wake up.
“Wake up,” said the teacher. “They have kicked it back to the local level, which is standard in public education. But when that local level is also… part of the system, it doesn’t work.”
The California Department of Education (CDE) acted after ABC10 reached out sharing our reporting’s findings and Highlands employees’ concerns. The agency didn’t respond to our requests for an interview for over a month. Six days after we sent them our findings, they sent a “Notice of Concern” letter to Highlands, the Sacramento County Office of Education and Twin Rivers Unified School District.
courtesy: California Department of Education
“We do appreciate that you shared your concerns and questions with us,” said Torres. “We have reached out to the charter school, the district and the county office of Education.”
In the Notice of Concern letter, the Department of Education listed ABC10’s findings and for each one, the agency asked Highlands for documents, budgets, rosters and policies.
Records show the Department of Education also met with Highlands leadership multiple times after our interview with the state agency.
The Department of Education also shared with ABC10 they take this seriously.
During a call on December 29, 2023, Sanders said the Department of Education is going beyond their traditional standards in that since Twin Rivers Unified is the oversight agency in-charge of monitoring Highlands, “but when we hear a concern there are allegations or concerns that may not be how this process is functioning in this case, then of course CDE wants to be responsive to those concerns and that is why we’re reaching out.”
“We would never want to discount concerns we receive,” said Sanders. “We want to make sure we’re doing our due diligence and using the weight of CDE and the weight of state level oversight even when that oversight is not mandated to make sure that there is an oversight process that’s being conducted.”
They said the CDE Charter School Division Director, Susan Park, is working with a team to go through the documentation Highlands provided in response to the Notice of Concern letter, has sent additional questions to Highlands and that CDE has requested a January meeting with Twin Rivers Unified and Highlands leadership.
In January 2024, ABC10 filed a public records request and received the documents Highlands Community Charter and Technical School provided CDE. We’re currently working to go through the documents and plan to report on developments, we already found inconsistencies.
Highlands told the California Department of Education they had 9,627 enrolled students in September 2023, yet the school responded to our public records request in September 2023 saying they had 14,736 enrolled students at that time.
As for complaints, CDE told ABC10 they were not aware of any Highlands staff submitting complaints to the state agency.
Yet emails between Diaz and CDE show the state agency should’ve been aware for years.
“I thought I better just reach out to see if I have any legal leg to stand on,” said Diaz. “I was just telling them, ‘I’m telling you! This is happening.’”
While working as a teacher for Highlands in February 2022, Diaz emailed CDE telling them she was being asked to sign attendance for students that were not there.
“Many of us are concerned and don’t want to put our credentials at risk by signing and/or falsifying documents,” Diaz wrote, asking, “Is this legal?”
“They said, ‘Well you need to go to the county superintendent,’” said Diaz. “A lot of times we’d take it as far as we could where we felt safe to but didn’t want to put our jobs in jeopardy.”
By going to CDE, Diaz felt she already went to the top. Where she couldn’t go, she said, is her bosses at Highlands. Yet that’s where CDE defaulted back to during ABC10’s call with them.
“If a charter school employee does have a complaint, they can notify the school administration,” said Torres. “They can direct a complaint to the charter school governing board.”
We explained to Torres, Sanders and Park how Highlands employees told ABC10 they’re concerned going to Highlands’ board when the board’s relatives work at Highlands – and how they feel there’s no safe space for them to express their concerns, as Smith is on all HR emails – as shown in part two of this series.
“That’s really sad to hear,” said Park. “Highlands, specifically, they have a large board… so if an employee is struggling to get resolution internally at the school level, they do have that governing board level.”
Lindsay Curtis – Highlands Homeless Services Coordinator – did go to the Highlands board.
She was one of the few Highlands employees who agreed to speak on-camera with ABC10 while employed at the school.
“I consider myself more of a public servant. I’m a teacher. I work in homeless services,” said Curtis. “I get funded by taxpayers. They’re who I’m accountable to.”
Four weeks after our interview with Curtis, Highlands eliminated her position saying they were “restructuring.” They gave Curtis two choices – take a different position she didn’t want or quit.
Curtis resigned – and a month later, spoke directly to the Highlands board in their September 2023 board meeting. In-part she said:
- “Highlands eliminated without explanation the school’s only homeless services role – even with more than 1,500 students experiencing homelessness, and having just made a documentary video highlighting the services I helped provide and paying $300,000 to an outside production company for that video. All while I was never given any budget over the years for students experiencing homelessness. Highlands doesn’t tell you why they’re firing or restricting you, but my guess is I was too vocal or not agreeable enough. What I do know is that the culture is cult-like, the quality of education doesn’t get near enough respect, attention or resources from upper management – and the spending is often exorbitant and irresponsible. Highlands had hundreds of educated supervisors, teachers and other staff but their expert voices are never heard.”
None of the board members responded to her concerns.
Instead, Highlands Board Member Sondra Betancourt ended the meeting saying: “You should all have great pride in yourselves. Your professionalism. Your dedication. And your team-player attitude toward building this toward the great institution that it absolutely is.”
“I also want to commend Doc for being a great leader,” Betancourt finished her statement at the end of the board meeting.
Betancourt is the Local Education Agency (LEA) representative. According to Highlands and their “TRUSD & Board Oversight” Policy, Betancourt is the Twin Rivers representative that’s supposed to provide “significant oversight and support” of Highlands.
Meaning, she’s the board member that’s supposed to report concerns like Curtis’ back to Twin Rivers Unified School District.
Curtis also provided each Highlands board member with her concerns in writing. That was in September 2023. As of January 2024, Curtis said not one of them wrote back or contacted her.
“I think any taxpayer or non-taxpayer, you come to our campus and then you come to me and say, ‘What a waste,’” said Doc Smith, Highlands’ Executive Director.
Over the last year, one after another, Highlands employees reached out to ABC10’s investigative team. As of January 2024, 34 have come forward on and off-camera.
“I thought it was important to make a stand for education,” said Elke Dameson, a former Highlands teacher.
“I care about education and our students,” said the teacher.
Not one called Highlands a waste. All believe in the school’s mission and students.
“Highlands does beautiful things,” said Jeanette Rowe, a former Highlands counselor. “I want that to continue and the world needs that to continue, but leadership has to do better.”
Leadership – that’s where they say waste is happening.
“There’s a lot of waste happening,” said Curtis. “There’s a lot of toxicity happening.”
Highlands’ leadership said hundreds of millions of tax dollars are spent educating immigrants. Insiders say otherwise.
“The reality of what’s happening is a really sad story,” said the administrator.
Records show few students are graduating and getting jobs.
“It’s going to make a lot of people angry,” said the teacher. “Rightfully so. They need to pay attention.”
With little oversight, our sources call this charter school the “wild west of education.”
So, in what seems a lawless land, they ask – who is Highlands, and its money, truly benefitting?
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