February 28, 2026
5 mins read

Under Carvalho, LAUSD’s Virtual School Collapse, Hidden Funds, and Whistleblowers Warned by the OIG They Would Be Threatened and Silenced

For more than two years, educators inside the Los Angeles Unified School District say they exhausted every formal channel available to them. They documented concerns, filed complaints, alerted oversight bodies, and warned district leadership that sick and disabled students were being harmed, that education and labor laws were being violated, and that public funds were flowing through programs that were never lawfully structured. According to those educators, what followed was not investigation or reform, but retaliation, isolation, and silence under the authority of Superintendent Alberto Carvalho.

The experience of veteran teacher David Steenhoek illustrates how those failures unfolded over time. Steenhoek began his career at LAUSD in 2005. In 2016, after years as a resource specialist and supplemental teacher, he became a full-time Home Teacher at Carlson Home Hospital School. At that point, he discovered he had been classified as “pay to work,” a designation that resulted in docked pay when his caseload was not filled. Steenhoek maintains he never signed the documentation authorizing that status and retained a blank copy of the form. Other teachers at the school were annualized. According to Steenhoek, administrative negligence in placing students on his caseload cost him years of pay and retirement benefits, while the district continued receiving his full salary allocation and Title I funding.

By August 2023, Steenhoek was assigned only one or two students, despite a full caseload being five. He received no explanation. At the same time, the district continued receiving funding for his position. Steenhoek and other educators began asking where that money was going, particularly as dozens of students went without teachers.

In September 2023, Steenhoek and other teachers formally notified district leadership, including the superintendent, the LAUSD School Board, and members of the Los Angeles City Council, that approximately ninety Carlson Home Hospital students did not have assigned teachers. Other teachers submitted similar warnings. Rather than addressing the missing students or the pay discrepancies, the district removed the school’s principal, Margie Gilkyson. No explanation was provided regarding the loss of wages teachers had already sustained.

That same month, Steenhoek notified the United Teachers Los Angeles and requested whistleblower status. During this process, he learned that Carlson Home Hospital was classified by the state as a Special Day School and that virtual instruction was not authorized. This meant all teachers should have been annualized and that Carlson Home Online Academy, the virtual program operating alongside the hospital school, was out of compliance with California Education Code. Steenhoek and other educators concluded that CHOA should not have been operating in its existing form.

In 2023, as these disclosures escalated, Steenhoek and other whistleblowers met directly with Donald “Rusty” McMillan of LAUSD’s Office of Inspector General. According to the educators, McMillan warned them that if they continued pursuing their complaints, the district would retaliate against them, attempt to destroy their credibility, and trash their character. Whistleblowers state this warning was captured on audio. Despite this explicit acknowledgment from the district’s own oversight office that retaliation was foreseeable, no protective action followed. Instead, educators say the predicted retaliation unfolded, confirming that whistleblowers were not protected by Superintendent Carvalho, the LAUSD School Board, UTLA, or the State of California.

Later in September 2023, Latasha Buck, then Director of Options Schools, appeared on campus and announced the district was seeking a new principal. Around the same time, Steenhoek and other teachers say they uncovered what they believed to be misappropriation of funds by former administrators. Those allegations were reported by email to district leadership, the California Department of Education, the LAUSD School Board, UTLA, Superintendent Carvalho, and California Superintendent of Public Instruction Tony Thurmond. According to whistleblowers, no agency intervened.

As internal avenues failed, whistleblowers sought external scrutiny. Educators say they provided documentation and firsthand accounts to reporters at the Los Angeles Times and NBC News, detailing unlawful programs, retaliation, and harm to sick and disabled students. According to the whistleblowers, neither outlet pursued the story. No follow-up reporting occurred and the allegations were never brought to public attention through those channels.

Several whistleblowers also spoke with a reporter at EdSource, which published an article based on their accounts. According to educators familiar with the matter, the article was removed within twenty-four hours. Whistleblowers say the takedown reinforced their belief that institutional pressure was being applied to suppress scrutiny rather than address misconduct.

In October 2023, Steenhoek finally received four students, but his pay had already been affected for months. He describes a hostile work environment in which administrators pitted annualized hospital and CHOA teachers against non-annualized home teachers. A new principal, Andrew Kim, arrived with Assistant Principal Robnett. Steenhoek reports that instead of reform, harassment continued. Former administrator Mark Hummer, despite retirement, allegedly continued influencing operations and singled Steenhoek out during meetings.

By early 2024, Steenhoek had filed formal whistleblower and harassment complaints with LAUSD’s Office of Inspector General naming Superintendent Carvalho and multiple administrators. He received no substantive response. In April 2024, he was issued a conference memo threatening termination over alleged attendance issues, using investigative tactics he says mirrored those used in prior cases that later resulted in lawsuits against the district. That same month, he discovered approximately five thousand dollars missing from his paycheck.

 

On April 22, 2024, after months of escalating stress, Steenhoek sought psychiatric care and began medication to manage anxiety and stress, which he attributes directly to the district’s conduct and failure to protect him as a whistleblower.

All of this unfolded as CHOA continued operating despite repeated warnings that it was unlawful. Educators allege the program allowed the district to count students for funding purposes even when legally required in-person instruction was not occurring, particularly during and after COVID. Staffing practices, they say, reduced labor costs by denying full pay to teachers whose caseloads were intentionally left incomplete, while enrollment and funding streams remained intact.

In February 2025, The Current Report began independently reporting on what it described as illegal activities and governance failures under Superintendent Carvalho’s administration, including issues related to financial oversight, retaliation against whistleblowers, and the continued absence of audits or accountability following the shutdown of CHOA. That reporting marked the first sustained investigative coverage of these issues after multiple mainstream outlets declined to pursue them.

Responsibility for these outcomes ultimately rests with the superintendent. Under California law and LAUSD’s governance structure, Carvalho holds final authority over district operations, compliance, and responses to whistleblower complaints. Whistleblowers argue CHOA did not operate in isolation. It existed, was funded, and was sustained under his leadership despite years of documented warnings and explicit notice that retaliation was likely.

That accountability takes on added weight in light of recent FBI raids connected to LAUSD operations during Carvalho’s tenure. While no criminal findings have been announced against him personally, federal law enforcement activity tied to the district has intensified scrutiny of LAUSD’s governance and financial oversight.

In July 2024, LAUSD abruptly shut down CHOA. Approximately 170 sick students were displaced. Teachers were left without clarity, income, or answers. No independent audit was released. No accounting of past funding was made public.

What distinguishes this case is not a lack of notice, but an excess of it. From internal complaints to union filings, from city and state officials to the press, and even to the district’s own oversight office, the record shows repeated warnings and repeated inaction. Until LAUSD releases a full independent audit of CHOA, addresses the treatment of whistleblowers, and explains how these failures persisted under Superintendent Carvalho’s leadership, accountability remains unresolved.

Cece Woods

Cece Woods

Cece Woods is an independent investigative journalist and Editor-in-Chief of The Current Report, specializing in public corruption, institutional accountability, and high-profile criminal and civil cases.

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