Do California's open-meeting, public-records, and government-ethics laws apply to charter schools the same way they apply to traditional public schools?

Plain-English summary

The Lassen County District Attorney asked Attorney General Xavier Becerra a basic but unsettled question: when a charter school is set up as a private nonprofit corporation, do the same public-integrity rules that apply to traditional school districts still reach it? The AG concluded yes, on every front.

Charter schools are part of the public school system. They are funded by state taxes, they cannot charge tuition, and they cannot pick and choose students based on personal characteristics. Their governing officials are "officers of public schools to the same extent as members of other boards of education of public school districts." On those facts, the AG read four bodies of law to apply to charter schools regardless of whether the school is operated as a public agency or as a corporate nonprofit:

1. The Ralph M. Brown Act (open meetings).
2. The California Public Records Act.
3. Government Code section 1090 (the felony ban on financial self-dealing in public contracts).
4. The Political Reform Act of 1974 (the financial-conflict rules administered by the Fair Political Practices Commission).

On grand jury access, the AG drew a line. Charter schools chartered by a local school district or by a county board of education are open to grand jury inspection under Penal Code section 933.6, because the chartering authority itself is subject to grand jury oversight and the school operates "on behalf of" that authority. Charter schools chartered directly by the State Board of Education are not, because no county grand jury has authority to investigate state agencies, and Penal Code section 933.5's separate grand jury power over taxing or assessing districts does not reach charter schools (which have no taxing power).

The AG rejected two recurring counter-arguments. First, the Education Code's "mega-waiver" in section 47610 only frees charter schools from "laws governing school districts," not from laws of general application like the Brown Act. Second, choosing a corporate governance structure does not pull a charter school out of the public-agency rules: the corporation operates the school, but the school itself remains a public entity.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

In particular, the Charter Schools Act has been amended several times since 2018 (notably AB 1505 in 2019), and the Legislature has continued to revisit charter-school transparency requirements. Anyone acting on the conclusions here should confirm current text of the Education Code provisions and check for any later AG opinions.

Common questions

Q: Why was there ever any doubt that charter schools had to follow the Brown Act and Public Records Act?
A: Because corporate charter schools are organized as nonprofit corporations, not as government agencies, some operators argued that they were private entities outside the reach of public-agency laws. The AG noted that the Legislature had repeatedly considered, but never enacted, bills (1860/2004, 2115/2007, 572/2009, 913/2013, 709/2015) that would have expressly applied these laws to charter schools. That legislative history left the question genuinely contested until this opinion.

Q: What is the "mega-waiver" and why doesn't it apply?
A: Education Code section 47610 says a charter school complies with the Charter Schools Act and its own charter, but is "otherwise exempt from the laws governing school districts," with a few specific carve-outs for retirement, building standards, state loans, and minimum age. The AG read that exemption as freeing charter schools only from rules that uniquely target school districts, not from laws of general application that bind every local agency. The Brown Act and Public Records Act apply to every "local agency," not just school districts.

Q: Does it matter whether the charter school is operated as a corporation?
A: No. The corporate operator and the charter school itself are different things. A corporation cannot run a charter school until it receives a charter from a chartering authority, and if the charter is revoked the corporation continues to exist while the school does not. The AG framed the question as whether the school is a local agency, not what corporate form its operator chose.

Q: What does Government Code section 1090 actually prohibit?
A: It bars officers and employees of public bodies from being financially interested in contracts that they (or their boards) make in their official capacity. Violation is a felony, and tainted contracts are generally void. The AG concluded a charter school is an "agency of the state" formed for the local performance of governmental functions within limited boundaries, which puts it inside section 1090's "district" definition. Members of charter school boards are therefore subject to the same self-dealing prohibitions as traditional school board members.

Q: Does the Political Reform Act treat charter school board members as public officials?
A: Yes. The Fair Political Practices Commission had reached this conclusion as early as 1998 (Walsh Advice Letter). The AG endorsed the FPPC's four-part test for determining when a nonprofit qualifies as a "local government agency": charter schools (1) are formed at government's impetus, (2) are substantially supported by public funds, (3) perform a public function as their principal purpose, and (4) are treated as public agencies by other statutory provisions.

Q: When can a grand jury examine a charter school's books?
A: Under Penal Code section 933.6, a grand jury may examine the books of any nonprofit corporation operated "on behalf of" a public entity whose books the grand jury already may inspect. School districts and county boards of education are subject to grand jury inspection. Charter schools chartered by either operate "on behalf of" their chartering authority, so the grand jury power reaches them too. State-board-chartered charter schools are different: there is no county grand jury authority over state agencies. Those charter schools may still be audited by the California State Auditor and investigated by the AG.

Q: How do these public-integrity laws interact with the charter-school deregulatory purpose?
A: The AG framed them as compatible. The Charter Schools Act is intended to free charter schools from "the educational bureaucracy" and to give them flexibility in pedagogy and operations. Open-meeting and public-records rules do not touch curriculum or instructional method. They go to whether the public can see how its tax dollars are being spent. The AG saw no tension between the two.

Background and statutory framework

The Charter Schools Act of 1992 (Education Code section 47600 et seq.) authorized charter schools as a category of public school operating outside many of the rules that bind traditional school districts. A charter school may be chartered by a local school district, by a county board of education, or directly by the State Board of Education. The Legislature later (1998) authorized charter schools to "operate as, or be operated by, a nonprofit public benefit corporation," which is the structure most charter schools use today.

This corporate form created the legal puzzle the opinion addresses. A nonprofit operator looks private; the charter school it operates looks public. Some operators argued that the corporate form pulled the entire enterprise outside laws like the Brown Act, the Public Records Act, Government Code section 1090, the Political Reform Act, and the Penal Code's grand jury powers.

Three Constitutional anchors framed the AG's analysis:

• Article IX, sections 5 and 6, mandate a system of free public schools and prohibit transferring any part of the school system to entities outside that system. The AG read this as fixing charter schools inside the public school system regardless of governance structure.
• Article I, section 3, subdivision (b)(2), expressly directs that statutes furthering the right of public access be construed broadly and that statutes limiting access be construed narrowly.
• Article IX, section 8, places appropriation of public school funds under "the exclusive control of the officers of the public schools."

The Brown Act and Public Records Act both apply to every "local agency," defined in nearly identical terms to include school districts and "any board, commission or agency thereof, or other local public agency." Education Code section 47612, subdivision (c), expressly treats charter schools as "school districts" for purposes of receiving state funds. The AG combined these provisions to conclude that charter schools fall inside the local-agency definition for sunshine-law purposes.

For Government Code section 1090, the relevant text reaches "district" officers, where "district" means "any agency of the state formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries." The AG read "any" as broad and rejected the argument that statewide-service charter schools fall outside the "limited boundaries" language.

For the Political Reform Act, the AG followed the FPPC's longstanding position that public-agency status turns on substance over form: who created the entity, who funds it, what function it performs, and how other statutes treat it. Charter schools score yes on all four.

For grand jury access, the analysis bifurcated. Penal Code section 933.6 permits grand jury inspection of nonprofit corporations operated "on behalf of" entities whose books are already open to the grand jury. Local school districts and county boards of education are open to grand jury inspection. Therefore, charter schools chartered by either operate "on behalf of" them. State-board-chartered schools have no county-grand-jury-reachable parent. The AG noted that Penal Code section 933.5 separately authorizes grand jury inspection of "special-purpose assessing or taxing districts": but charter schools have no taxing power, so section 933.5 does not extend to them.

Citations and references

Statutes and Constitutional provisions:

• California Constitution, article I, section 3 (right of access)
• California Constitution, article IX, sections 5, 6, 8 (free public schools, public-school-system control)
• Education Code section 47600 et seq. (Charter Schools Act of 1992)
• Education Code sections 47601, 47604, 47605, 47605.5, 47605.6, 47605.8, 47607, 47610, 47611, 47611.5, 47612, 47613, 47615, 47650 (Charter Schools Act provisions)
• Education Code section 35233 (applying section 1090 to school district board members)
• Government Code section 1090 (financial conflict of interest in public contracts)
• Government Code section 1097 (felony penalty for section 1090 violation)
• Government Code section 6250 et seq. (Public Records Act)
• Government Code section 11120 et seq. (Bagley-Keene Open Meeting Act, state agencies)
• Government Code section 12588 (AG investigation of charitable assets)
• Government Code section 12650 et seq. (California False Claims Act)
• Government Code section 54950 et seq. (Ralph M. Brown Act)
• Government Code section 54951 (definition of "local agency" for Brown Act)
• Government Code section 54952 (definition of "legislative body")
• Government Code section 81000 et seq. (Political Reform Act of 1974)
• Government Code sections 82041, 82048 (definitions for Political Reform Act)
• Government Code sections 83100, 83111, 83114 (Fair Political Practices Commission)
• Penal Code section 925 (general grand jury investigative authority)
• Penal Code section 933.5 (grand jury inspection of taxing or assessing districts)
• Penal Code section 933.6 (grand jury inspection of nonprofits operated on behalf of public entities)
• Corporations Code section 5250 (AG authority over nonprofit waste, breach of fiduciary duty, self-dealing)

Cases:

• Wells v. One2One Learning Foundation, 39 Cal.4th 1164 (2006) (corporate charter school's "mega-waiver" status; False Claims Act liability)
• Wilson v. State Bd. of Education, 75 Cal.App.4th 1125 (1999) (charter schools subject to chartering authority oversight; section 47610 exempts only laws "pertaining uniquely to school districts")
• Today's Fresh Start, Inc. v. Los Angeles County Office of Education, 57 Cal.4th 197 (2013) (charter schools are "public schools funded with public money but run by private individuals or entities")
• Lexin v. Superior Court, 47 Cal.4th 1050 (2010) (scope of section 1090 financial-interest rule)
• Thomson v. Call, 38 Cal.3d 633 (1985) (foundational section 1090 case)
• Santa Clara County Local Transportation Authority v. Guardino, 11 Cal.4th 220 (1995) ("any" means any)
• McClatchy Newspapers v. Superior Court, 44 Cal.3d 1162 (1988) (grand jury "watchdog" function)
• Anderson Union High School Dist. v. Shasta Secondary Home School, 4 Cal.App.5th 262 (2016) ("mega-waiver" terminology)

Source

• Landing page: https://oag.ca.gov/opinions/yearly-index
• Original PDF: https://oag.ca.gov/system/files/opinions/pdfs/11-201_4.pdf

Original opinion text

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
XAVIER BECERRA
Attorney General

OPINION
of
XAVIER BECERRA
Attorney General
MANUEL M. MEDEIROS
Deputy Attorney General

No. 11-201
December 26, 2018

THE HONORABLE STACEY L. MONTGOMERY, DISTRICT ATTORNEY FOR LASSEN COUNTY, has requested an opinion on the following questions:

1. Are a California charter school and its governing body subject to the Ralph M. Brown Act and the California Public Records Act?
2. Is a California charter school's governing body subject to Government Code section 1090?
3. Is a California charter school's governing body subject to the Political Reform Act of 1974?
4. Are the books and records of California charter schools subject to review and inspection by a grand jury?

CONCLUSIONS

1. Yes, a California charter school and its governing body are subject to the Ralph M. Brown Act and the California Public Records Act.
2. Yes, a California charter school's governing body is subject to Government Code section 1090.
3. Yes, a California charter school's governing body is subject to the Political Reform Act of 1974.
4. Yes, in general, the books and records of California charter schools that are chartered by a school district or county board of education are subject to review and inspection by a grand jury. However, the books and records of California corporate charter schools that are directly chartered by the State Board of Education are not subject to review and inspection by a grand jury.

ANALYSIS

We are presented with a series of questions about whether charter schools in California are subject to the same public-integrity statutes that apply to traditional public schools. For the reasons set out below, we conclude that charter schools are subject to these salutary laws.

Charter schools are a class of public schools. The California Department of Education offers this description: "A charter school is a public school that provides instruction in any combination of grades, kindergarten through grade twelve. Parents, teachers, or community members may initiate a charter petition, which is typically presented to and approved by a local school district governing board. California Education Code (EC) also allows, under certain circumstances, for county boards of education and the State Board of Education to be charter authorizing entities. Specific goals and operating procedures for a charter school are detailed in the agreement between the charter authorizing entity and the charter developer. A charter school is exempted from many of the statutes and regulations that apply to school districts. Students enroll in charter schools on a voluntary basis."

Charter schools are created pursuant to the Charter Schools Act of 1992 (Ed. Code, § 47600 et seq.; Stats.1992, ch. 781). One of the signature purposes of the Act is to free charter schools from the "educational bureaucracy" (Wells v. One2One Learning Foundation (2006) 39 Cal.4th 1164, 1201) that pertains in traditional school districts, by way of a statutory exemption from many of the laws that govern traditional school districts. "Charter schools are grounded in private-sector concepts such as competition-driven improvement . . . , employee empowerment and customer focus. But they remain very much a public-sector creature, with in-bred requirements of accountability and broad-based equity. . . ."

California's Constitution mandates a system of free public schools (Cal. Const., art. IX, § 5). As creatures of that system, charter schools are funded by state taxes, and they may not charge tuition. Further, unlike private schools, charter schools may not restrict admissions on the basis of personal characteristics such as gender or religion. They are required to meet statewide educational standards and to conduct the same pupil assessments that are required of noncharter public schools. Charter school teachers must hold state teaching credentials, and they enjoy the same collective-bargaining rights and retirement benefits that public-school teachers enjoy.

A charter school may be chartered by a school district, by a county board of education, or directly by the State Board of Education. The Legislature intends that charter schools should "operate independently from the existing school district structure" (Ed. Code, § 47601). To that end, the Legislature has authorized a charter school to "elect to operate as, or be operated by, a nonprofit public benefit corporation" (Ed. Code, § 47604, subd. (a)). The majority of charter schools operating today have opted for a corporate charter structure, although some have declined the option in favor of operating as dependent affiliates of a chartering district.

At the same time, regardless of governance structure, a charter school is under "the exclusive control of the officers of the public schools" (Ed. Code, §§ 47612, subd. (a), 47615, subd. (a)(2)) and is a "school district" for purposes of the allocation of education funds (Ed. Code, § 47612, subd. (c)). Governing officials of a charter school are themselves "officers of public schools to the same extent as members of other boards of education of public school districts" (Wilson, supra, 75 Cal.App.4th at p. 1141). Indeed, the Constitution "prohibits the transfer of authority over any part of the school system to entities outside of the public school system" (Mendoza v. State (2007) 149 Cal.App.4th 1034, 1039).

Ever since corporate charter schools — which bear attributes of both public and private enterprises — were authorized in California, questions have arisen as to whether they are subject to the public-integrity statutes that apply to public schools and other government entities, including laws requiring open meetings and public access to records, and laws forbidding financial and other conflicts of interest. The Legislature has entertained multiple bills (all vetoed or otherwise unsuccessful) in an effort to clarify the issue (Assem. Bill No. 709 (2015-2016 Reg. Sess.); Assem. Bill No. 913 (2013-2014 Reg. Sess.); Assem. Bill No. 572 (2009-2010 Reg. Sess.); Assem. Bill No. 2115 (2007-2008 Reg. Sess.); Assem. Bill No. 1860 (2003-2004 Reg. Sess.)).

This is the legal environment in which we have been asked to evaluate whether, under the existing state of the law, charter schools, including corporate charter schools, are subject to the same public-integrity statutes that govern traditional public schools. Seeing that corporate charter schools are licensed and paid to participate in the essential public function of providing a mandatory free education to California's children, we conclude that they are bound by all of the public-integrity laws that we examine here.

Question 1. The first question here is whether charter schools and their governing bodies are subject to the so-called "sunshine laws," that is, the open-meeting rules of the Brown Act, and the information-access rules of the Public Records Act. We conclude that charter schools are subject to these laws.

The Brown Act was passed in 1953 with this sweeping declaration of purpose: "In enacting this chapter, the Legislature finds and declares that the public commissions, boards and councils and the other public agencies in this State exist to aid in the conduct of the people's business. It is the intent of the law that their actions be taken openly and that their deliberations be conducted openly. The people of this State do not yield their sovereignty to the agencies which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created." (Gov. Code, § 54950.)

The Public Records Act was enacted in 1968. Its purpose is to "facilitate the public's right to monitor governmental activities on the principle that 'access to information concerning the conduct of the people's business is a fundamental and necessary right of every person in this state.'"

Both the Brown Act and the Public Records Act are applicable to a "local agency" and to the "legislative body" of a local agency. The Brown Act defines "local agency" as "a county, city, . . . city and county, town, school district, municipal corporation, district, political subdivision, or any board, commission or agency thereof, or other local public agency" (Gov. Code, § 54951). Similarly, the Public Records Act defines "local agency" to include "a county; city. . . ; city and county; school district; municipal corporation; district; political subdivision; or any board, commission or agency thereof; other local public agency; or entities that are legislative bodies of a local agency pursuant to subdivisions (c) and (d) of Section 54952" (Gov. Code, § 6252, subd. (a)).

Thus, the question that needs answering is whether a charter school is a "school district" or "other local public agency" for purposes of the Brown Act and the Public Records Act. We start with the statute's words. A "school district" is specifically listed as a "local agency" under both Acts. We know from related statutes that a charter school is a "school district" for specified purposes including being "under the exclusive control of the officers of the public schools for purposes of Section 8 of Article IX of the California Constitution, with regard to the appropriation of public moneys to be apportioned to any charter school. . . ." (Ed. Code, § 47612, subds. (a), (c)).

After all, "school districts" are subject to sunshine laws, and charter schools are "school districts" for purposes of receiving state funding. What charter schools do with the public money that they receive is a matter of legitimate concern to the taxpaying public. Receiving funding from the state for the purpose of educating public schoolchildren is reason enough to require that corporate charter schools' business — which is also the people's business — be conducted in the open.

What is more, we are constrained by the Constitution of California to construe both the Brown Act and the Public Records Act broadly to further the people's right of access to the meetings and documents of bodies conducting the public's business. The promise of public access to public information is fixed in Article I of our Constitution, just as Article IX establishes a system of free public schools under the exclusive control of the public school system. Reading the statutes liberally, we are convinced that the public has a right to expect transparency from charter schools because they are licensed and paid by the state to participate in the core function of educating California's children.

Accordingly, we conclude that a charter school is a "school district . . . or other local public agency" within the meaning of the Brown Act and the Public Records Act and therefore subject to those laws. A charter school's governing body is, therefore, a "legislative body" within the meaning of Government Code section 54952, subdivision (a).

We address two possible objections.

Mega-waiver. Section 47610 provides that "A charter school shall comply with [the Charter Schools Act] and all of the provisions set forth in its charter, but is otherwise exempt from the laws governing school districts, except all of the following . . . ." Exceptions are made for teacher retirement plans, state loans, building standards, and the minimum age for public school attendance. Based on this provision, some argue that the Brown Act and the Public Records Act do not apply to charter schools because those are among the "laws governing school districts" from which charter schools are exempt. We disagree.

The Brown Act and the Public Records Act are not just "laws governing school districts." They are laws of general application governing all local agencies. No court has ever construed section 47610's "mega-waiver" to apply to a law of general application. Nothing in the legislative history of section 47610 supports a reading that would immunize charter schools from affording public access to its meetings and documents. To shield charter schools from the reach of public access statutes would set those schools apart from all other public schools.

Corporate governance. We have also considered the argument that charter schools should be exempt from the Brown Act and the Public Records Act because they are legally structured as corporations, not public agencies. But we see no sound basis for conditioning the public's right to transparency on a charter school organizer's chosen mode of governance.

The argument that corporate charter schools are merely private corporations confuses the corporate operator of the charter school with the charter school itself. Under the express terms of the statute, the decision to operate as a corporation is that of the charter school, not the corporation. A corporation is unable to operate as a charter school, or to operate a charter school, unless and until it receives a charter from the appropriate chartering authority. It is the charter school that is a part of the public school system, regardless of its governance structure. If a corporate charter school loses its charter, the corporation may continue in existence, but it ceases to be a charter school.

Here, our concern is with the governing body of the local agency itself, i.e., the charter school, not with the charter school's corporate parent. The members of a corporate charter school's governing body "are officers of public schools to the same extent as members of other boards of education of public school districts."

For all the reasons discussed above, we conclude in response to Question 1 that a California charter school and its governing body are subject to the Ralph M. Brown Act and to the California Public Records Act.

Question 2. The second question is whether a California charter school's governing body is subject to Government Code section 1090, which broadly prohibits conflicts of interest in public contracts. We conclude that it is.

Government Code section 1090 states: "(a) Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. . . . (c) As used in [article 4, commencing with section 1090] 'district' means any agency of the state formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries."

The prohibition against self-dealing has a long history in California law. Government Code section 1090 can be traced back to an 1851 enactment, which itself has been deemed to express the ancient common-law doctrine against conflicts of interest. Section 1090 generally forbids public officials from participating in making government contracts in which they have prohibited interests. The purpose of the rule is to ensure that "every public officer be guided solely by the public interest, rather than by personal interest, when dealing with contracts in an official capacity" (Thomson v. Call (1985) 38 Cal.3d 633, 650). Violation of section 1090 is a felony, and contracts entered into in violation of section 1090 are generally considered void.

Over time, the scope of the rule has expanded to include the officers of any "district," defined broadly as "any agency of the state formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries."

"Any" means any. We harbor no doubt that a charter school is an "agency of the state, formed pursuant to general law . . . for the local performance of governmental . . . functions within limited boundaries." Because members of a charter school board of directors are deemed to be "officers of public schools to the same extent as members of other boards of education of public school districts," they are subject to the prohibitions of section 1090.

Question 3. The third question asks whether a charter school's governing body is subject to the Political Reform Act of 1974. In accord with decisions of the Fair Political Practices Commission, we conclude that charter school boards are subject to that law.

The Political Reform Act was enacted by initiative measure to give effect to the principle that "Public officials, whether elected or appointed, should perform their duties in an impartial manner, free from bias caused by their own financial interests or the financial interests of persons who have supported them" (Gov. Code, § 81001, subd. (b)).

Public officials governed by the Act include "every member, officer, employee or consultant of a state or local government agency" (Gov. Code, § 82048, subd. (a)). "Local government agency" means a "county, city or district of any kind including school district, or any other local or regional political subdivision, or any department, division, bureau, office, board, commission or other agency of the foregoing" (Gov. Code, § 82041).

In 1998, the same year in which the Legislature amended the Charter Schools Act to permit a charter school to be operated by or as a nonprofit corporation, the general counsel of the Fair Political Practices Commission issued an Advice Letter concluding that board members of a charter school's nonprofit corporation were subject to the Political Reform Act's conflict-of-interest provisions (FPPC, Walsh Advice Letter, No. A-98-234).

Key to its conclusion was the Commission's determination that the charter school was a "local government agency." Using a four-part test, the Commission concluded that the school (1) was formed at the impetus of a government agency; (2) was substantially supported by public funds; (3) performed a public function as its principal purpose; and (4) was treated as a public agency, (i.e., a school district) by other statutory provisions, namely the Charter Schools Act.

The Fair Political Practices Commission is the agency responsible for enforcing the conflict-of-interest provisions of the Political Reform Act, and its interpretations of the Act are entitled to deference.

We conclude, in accord with the Commission's views, that a corporate charter school's governing body is subject to the Political Reform Act's conflict-of-interest provisions.

Question 4. The last question is whether the books and records of a California charter school are subject to review and inspection by a grand jury pursuant to Penal Code section 933.6. With respect to schools that are chartered by either a local school district or a county board of education, we conclude that such materials are subject to grand jury review.

"The California grand jury has three basic functions: to weigh criminal charges and determine whether indictments should be returned; to weigh allegations of misconduct against public officials and determine whether to present formal accusations requesting their removal from office; and to act as the public's 'watchdog' by investigating and reporting upon the affairs of local government. Of these functions, the watchdog role is by far the one most often played by the modern grand jury in California" (McClatchy Newspapers v. Superior Court (1988) 44 Cal.3d 1162, 1170).

Section 933.6 provides: "A grand jury may at any time examine the books and records of any nonprofit corporation established by or operated on behalf of a public entity the books and records of which it is authorized by law to examine, and, in addition to any other investigatory powers granted by this chapter, may investigate and report upon the method or system of performing the duties of such nonprofit corporation."

The books and records of local school districts and county boards of education are subject to grand jury review. Therefore if a school chartered by a local school district or county board of education is operated "on behalf of" its local chartering authority, then the books and records of these charter schools are, in turn, subject to grand jury scrutiny. To act "on behalf of" another is to act "in the interest of," "as a representative of," or "for the benefit of" another.

Although a charter school, particularly one with a corporate governance structure, is generally conceived and organized by private individuals, it can have no operational or political existence as part of the public school system unless it first has a charter from a public school authority. The language of the Charter Schools Act reflects the subordination of the charter school to the "supervisorial oversight" of its chartering authority. A chartering authority may decline to grant a charter petition, must monitor the fiscal condition of each charter school under its authority, and may revoke a charter if the school violates its charter, fails to achieve student outcomes, fails to follow generally accepted accounting principles or engages in fiscal mismanagement, or violates any provision of law.

These conditions of empowerment, oversight, and control establish that a charter school acts "on behalf of" its chartering authority. The history of Penal Code section 933.6 demonstrates that the Legislature intended to "ensure that grand juries, in their 'watchdog' capacity, enjoy the statutory authorization to investigate the full range of local government agencies." Receiving substantial public funding for the provision of public education, charter schools certainly act "for the benefit of the public."

Accordingly, we conclude that the books and records of a California charter school that is chartered by a school district or county board of education are subject to review and inspection by a grand jury pursuant to Penal Code section 933.6.

On the other hand, section 933.6 does not apply to schools that are chartered directly by the State Board of Education. Section 933.6 applies only when the grand jury has authority to investigate the entity on whose behalf a nonprofit corporation is being operated. Since there is no authority for a grand jury to examine the books and records of a state agency, section 933.6 cannot be a source of authority for grand jury examination of the books and records of charter schools that are chartered directly by the State Board of Education. However, such schools, like other charter schools, may be subject to audit by the California State Auditor.