When the Tail Wags the Dog: How Tiny Districts Like Dehesa Are Raking in Millions While Educating Almost No One

EL CAJON, CA—Charter schools were created to spark innovation in public education. But in California, a growing number of tiny districts have turned this mission on its head—authorizing sprawling charter empires that serve tens of thousands of students while educating only a handful of their own.

Welcome to Dehesa School District, population: 80. Not 56,000. Just 80 students enrolled in its single brick-and-mortar school. And yet, Dehesa oversees more than 13,000 charter school students throughout Southern California. This isn’t an administrative coincidence. It’s a deliberate strategy—and a lucrative one.

The Charter Oversight Business Model

Thanks to California law, school districts can authorize charter schools and collect 1% to 3% of each student’s state-allocated ADA (Average Daily Attendance) funding as an oversight fee. For districts like Dehesa, which educate very few students locally but oversee massive charter operations, these oversight fees can amount to millions annually.

In both the 2022–2023 and 2023–2024 school years, Dehesa took in ADA funding for roughly over 13,000 students—more than 98% of whom were not enrolled in its local school. This year, only 80 students are enrolled in Dehesa Elementary, and attend Dehesa’s physical campus. That puts the district’s charter-to-district student ratio at a staggering 235:1.

And that number is conservative. When adjusting for charters and programs that were shifted or rebranded to create the appearance of increased in-seat enrollment—including “programs” like the Method Sports Academy and SoCal Scholars Virtual—the real ratio is closer to 13,377 charter students to 80 local resident students. The upcoming census data from October 1, 2025 has been requested via Public Record Request, and once those numbers are available, an article will be drafted to reflect the true numbers for the 2025-2026 school year, including the brand new charter school Method Summit Academy, which also utilizes Dehesa’s school campus for their education, overrunning and displacing resident students out of their own classrooms, into makeshift classrooms.

A Land Deal Built on Questionable Priorities

In a new development raising fresh concerns about Dehesa’s priorities and financial stewardship, the district is reportedly entering into a joint agreement with Method Schools to purchase land for a new school site. According to public documents and recent board activity, the deal involves shared funding between Dehesa and MethodSchools, with both parties contributing to the cost of land acquisition and future development, and a 99 year lease joint use agreement.

But a critical question looms: who actually benefits?

Dehesa currently operates a fully functional school site that adequately serves its resident student population — now just 80 students (as of 10/8/2025 enrollment report). There is no documented need for additional classroom space to support those local students. Instead, the expansion appears to serve the growing influx of charter students—many of whom are not residents of the district and were never enrolled in Dehesa proper.

Observers familiar with the matter point to an increasingly apparent pattern: the district’s public infrastructure and resources are being leveraged not for local educational needs, but to accommodate the charter system it now enables. Makeshift classrooms have already sprung up on the Dehesa campus in recent years, repurposed to house the ballooning number of “butt-in-seat” students funneled in through its authorized programs. This latest land deal appears to continue that trend — one where charter operations expand, and Dehesa residents foot part of the bill, and foot the entire cost to their declining education.

Critics argue this is yet another example of Dehesa functioning more as a charter landlord and broker than as a district focused on its own children. And as land deals unfold behind closed doors, the lines between public obligation and private partnership grow ever more blurred.

A3 Scandal Echoes

To understand the scope of the issue, one must revisit the A3 Charter School scandal, in which a web of virtual charter schools engaged in fraudulent enrollment schemes, ultimately bilking California taxpayers out of $80 million. A3 charter operators manipulated enrollment records, transferred students among multiple virtual schools, and collected state funds for students who weren’t actively attending classes.

That scandal centered around the same structure now seen in Dehesa: tiny districts overseeing massive charter networks across counties, often with little real oversight.

It was then-San Diego District Attorney Summer Stephan who emphasized that the success of the A3 fraud was due in large part to a lack of regulatory scrutiny. The overlap between that scandal and the current Dehesa situation appears more than coincidental. 

Today, Dehesa continues to authorize and retain charters connected to these operations, just rebranded with different names.

Dehesa’s A3 Legacy: A Scandal That Never Really Ended?

At the center of that fraud, Dehesa School District was a key player, where there were elaborate shell operations that manipulated Average Daily Attendance (ADA) figures, moved students between virtual charters to inflate revenue, and leveraged tiny school districts to rubber-stamp sprawling virtual programs with little oversight.

Not only did former Dehesa superintendent Nancy Hauer face criminal charges related to her role in authorizing A3-affiliated charters, but the district itself ultimately paid a state settlement for its part in the scandal. Dehesa collected millions in oversight fees for schools it neither supervised effectively nor publicly scrutinized — and in return, those schools helped orchestrate the largest charter fraud in state history.

Yet remarkably, the district appears to have taken no meaningful corrective action in the years since. In fact, based on recent approvals and partnerships, it looks like Dehesa has doubled down on the same blueprint.

The district now oversees more than 13,000 charter students while educating fewer than 100 of its own. It continues to approve far-flung adjacent charter petitions, partner with large virtual operators, and expand infrastructure not for its own resident student population — but for the charter empire it seems to be quietly rebuilding.

If this all sounds familiar, it should. The schemes that earned A3 founder Herbert “Nick” Nichols a national reputation — and criminal prosecution — are now eerily mirrored in Dehesa’s current operations. The only thing missing is the nickname.

And if Herbert ‘Nick’ Nichols were watching Dehesa today?
He’d probably give them a high five, and be so proud of Dehesa’s apparent creative maneuvers to continue raking in the taxpayer dollars.  

Because what Dehesa appears to have done is take the A3 playbook, blow off the dust, and retool the same model — right down to the excessive charter ratios, the questionable oversight capacity, and now, even shared infrastructure deals with its charter partners.

And somehow, after it all — the current board president, Cindy White was the board president during the A3 scandal is still in power today. Why would any electorate support a board president that not only appears to have been complicit in the A3 charter scandal, refused comment to multiple news outlets at the time, and still sits as the board president today, along with her son serving as a board member, and her current husband, providing a majority vote for anything the White family possibly discusses at family dinner. Does that sound crazy to you? The only change can be to oust the White family, or vote them out by the Dehesa Community, calls for all of their resignations have been made multiple times in board meetings, only to go ignored. With a small voting population of 1792 voters in Dehesa’s district, many uniformed voters cast their ballots not knowing the history of the A3 charter scandal and the key players still in power today. 

This isn’t just déjà vu. It’s a reboot.

Rubber-Stamp Authorizing and Shadow Governance

Dehesa is not alone. East of 52 reviewed charter enrollment data across all of San Diego County. Several small or rural districts show high charter enrollment ratios. But only Dehesa demonstrates all the following red flags:

• Massive charter-to-district enrollment disparity (13,377 charter vs. 96 in-seat)

• Continuation of relationships with A3-era operators

• Authorizing virtual charters and programs with little community benefit

• Failure to meaningfully engage in charter oversight (board silence, lack of documentation, public transparency concerns)

Meanwhile, other districts with high charter ratios, such as Borrego Springs, Warner Unified, and Julian Elementary, were found to serve isolated or rural communities and did not show signs of manipulation or mass charter authorization outside their intended scope. San Diego County Office of Education (SDCOE), while carrying a high number of charters, focuses on continuation, court, or behavioral education programs that serve a distinct student population.

Top Charter-Heavy Districts in San Diego County (by % Charter Enrollment)

The districts that did not have any red flags emerge did not appear in my investigation to flag any major discrepancies, although, would require audit and further review to verify their charter footprint.

In contrast, Dehesa’s approach appears to prioritize revenue over relevance. Its board continues to greenlight far-flung charters, most of which have no physical presence within the district’s borders and serve no identifiable population tied to its geographic community.

Money Without Accountability

This model results in millions flowing into Dehesa for students it never serves directly. Meanwhile, oversight—the very reason these funds are collected—is often minimal or ceremonial. Board meetings are sparsely documented. Budget approvals are swift. Conflict-of-interest disclosures are either absent or vague.

The funding structure creates strong incentives to approve more charters, regardless of oversight capacity. Since there is no legal cap on how many charters a district can authorize, and since ADA funding is tied to student counts, a small district can effectively function as a charter authorizing shell with no requirement to increase its own capacity, staffing, or governance procedures.

A Broader Statewide Pattern

The numbers tell a larger story:

• Of all districts analyzed, only Dehesa exceeds a 200:1 charter-to-local-student ratio.

• Dozens of districts operate at ratios of 10:1 or higher, often with minimal in-district enrollment.

• In some districts, board members and staff have overlapping family or business relationships, leading to further ethical concerns.

Yet none exhibit the layered red flags, past history, and disproportionate growth of Dehesa.

Policy in the Shadows

Dehesa’s story illustrates how California’s permissive charter laws can be exploited. Districts are given extraordinary authority to approve charters, collect funding, and operate with little oversight themselves. And when a district does overreach, as Dehesa appears to have done, the consequences are limited or delayed. No cap is enforced. No investigation is automatically triggered. No financial clawbacks occur.

Meanwhile, taxpayers foot the bill.

When Public Education Becomes a Private Benefit

The impact of this setup goes beyond paper numbers. For local families, it means fewer resources in traditional public schools, increased administrative overhead, and potential misallocation of funds intended for education. It also raises concerns about the equity of access, especially as charter schools offer boutique programs (surfing lessons, private dance studios, tech pods) that often cater to wealthier families.

These perks come with a price. That price is borne by the state, and by extension, the public.

A System Crying Out for Reform

What Dehesa shows is that California’s charter school authorization process is broken. While charters have a place in public education, the current structure enables small districts to act as high-volume charter mills with minimal transparency.

There is a path forward. It begins with:

• Capping the number of out-of-district charters a single district can authorize

• Linking oversight revenue to demonstrated compliance and supervision

• Requiring annual third-party audits of districts with high charter ratios through Fiscal Crisis & Management Team (FCMAT).

• Increasing state-level monitoring for districts that cross key thresholds (e.g., 10:1 charter ratios or more)

• Radical idea that ONLY County Offices of Education may authorize charter schools, no charter authorization from Districts AT ALL.

Dehesa is not just an outlier. It is a case study. And if California fails to respond, others will follow.

This is not a story about one district. It’s a story about how a loophole became a business model. And how children, communities, and public trust were left behind in the process.