The U.S. Department of Education has opened an investigation into the withholding of approximately $1.7 million in federal special education funding by local state education officials from Hawaii’s charter schools. A withholding which in at least one case, caused a local charter school owed $160,000 to suffer such severe financial trouble that it is in jeopardy of being shut down.

While state education officials have so far attempted to downplay the federal funding dispersement issue, the information became public in a Joint Senate/House Informational Briefing on the Waters of Life charter school audit at the state Capitol Monday, Feb. 7, 2005, during the testimony of Dewey Kim, the ex-Director of the Charter School Administrative Office, who is now a charter school consultant.

In his review of the finances of Waters of Life charter school on the Big Island, which was recently criticized in an audit by State Legislative Auditor Marion Higa for financial management, and subsequently is in jeopardy of losing its charter, Kim uncovered $160,000 in special education funds were withheld from the school by the DOE over a 2-year period.

Higa confirmed that she too discovered this during the state’s audit. Chuck Higgins, director of the DOE Charter School Office in charge of administering federal funds, would neither deny nor confirm the charge.

The testimony is significant because the DOE

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