It also highlighted the state board's dearth of rules to deal with the fast-developing world of online education. The task forces will concentrate on writing such rules and identifying any necessary changes in law.
Auditor Natalie Grange said "letters of correction" are being vetted by the Attorney General's office before they are sent to schools that have been determined to have problems.
Grange spent a half hour describing the troubling findings in her 54-page audit.
But board members asked no questions and did not discuss the audit, except for brief comments from members Jennifer A. Johnson of Murray and Dan Griffiths of West Jordan.
Johnson said the reform called for in the audit is the board's most critical job this year. "It's asking questions we're all realizing should have been asked before now," she said.
Griffiths suggested the board discuss online issues during its annual retreat. "This is going to be a huge undertaking," he said.
In her report, Grange said most of the problems in online programs occur when schools contract out the management of their online programs. The audit noted nine charter schools and one district school, eSchool in the Provo District, hired Harmony Educational Services and My Tech High Inc. to help them build enrollment and then manage the students. They did so mostly by recruiting home-school students.
To varying degrees, the schools did not properly keep student records and data safe; didn't ensure that online providers had licensed teachers; and didn't make sure the online classes met core curriculum standards.
Parents were allowed in some cases to give their students' assessments, in violation of state rules, and the contractors were paid for home-school courses that don't appear to qualify for state funding, Grange said.
The two contractors reimburse families for buying computers and other gadgets, and the board should decide if that's a legitimate use of public money, she said.
One of the charges of the financial task force will be to identify a fairer funding formula. At present, charter schools are being funded as if every student is full-time, when many take only a class or two online, Grange said.