The Charter School Review Panel has voted to require Halau Lokahi Charter School to submit monthly profit-and-loss statements to demonstrate its financial viability, and will look into other concerns about the school’s operations.

The 10-year-old Kalihi school recently completed its first independent financial audit, which cited problems with internal financial controls, payments to related parties and a debt of $425,000 at the end of the 2009-10 school year. Halau Lokahi officials say most of that money has been repaid over the last year and that the school is following the auditor’s recommendations to improve its fiscal system.

"The audit is a snapshot taken during the worst year in our history," school Director Laara Allbrett told panel members Thursday, adding that the state has failed to provide adequate funding for charter schools since they were founded. "I sit here today because on paper we don’t look so hot financially, but if you do the math, we don’t have a deficit. In fact, it is the state that owes us a huge sum."

The panel voted unanimously to require the monthly financial reports. Its fact-finding committee will also look into concerns about related parties at the school and internal financial controls, as well as a contract with a private online school to educate half of its students.

"We’re not questioning the work that you’re doing," panel member Carl Takamura said. "The concern arises out of the audit itself. There are numerous issues that are quite serious from our point of view. It calls into question how well the funding from the state is accounted for at the school."

Halau Lokahi’s 22-member staff includes Allbrett, two of her daughters, a son, a son-in-law and the son’s girlfriend. The school has 244 students in kindergarten through 12th grade, half of whom study online with Elite Element Academy.

Halau Lokahi pays the academy, an accredited online school, about $5,000 per student to provide educational services, its accountant told the panel. Buying the contracted services saves the school money because the online education costs less than in-person schooling.

Halau Lokahi depends on the state for the bulk of its income, receiving $5,560 per student this past school year. As a Hawaiian-focused charter school, it also is given $1,500 per student annually by Kamehameha Schools.