Debit cards for Halau Lokahi Charter School’s bank account have been canceled and the co-director of the school placed on administrative leave in the wake of a raid by the Attorney General’s office.

As a new governing board works to restructure the school, details are emerging about how the charter school spent money under the previous administration in the last school year, when it ran out of funds and stopped paying rent and staff. More than $101,000 in expenditures in the fiscal year that ended June 30 were flagged by the Public Charter School Commission as "needing explanation."

The school made out 15 checks ranging from $856 to $21,347 to individuals without indicating what services were provided or showing evidence of a contract, according to a summary compiled by the commission. Other payments included $8,516 to Rainbow Healing Arts, which offers treatments including lomilomi, and $4,982 to Young Living Essentials, a purveyor of essential oils.

As a public charter school, Halau Lokahi is largely funded with taxpayer dollars. In previous years, it also received per-pupil funds from Kamehameha Schools, but that money was cut off this fall after the school failed to meet the terms of its contract.

The Attorney General’s office executed a search warrant at the Kalihi charter school on Nov. 25, seizing financial and personnel records as well as computers. The school has 159 students in kindergarten through 12th grade.

On Dec. 2, school co-director Callei Allbrett was put on leave. She had been business manager and became co-director after her mother, Laara Allbrett, the school’s founder and long-time director, was forced to resign in July.

Asked to comment on the expenditures, Callei Allbrett told the Honolulu Star-Advertiser that "the real story is about the struggles and challenges of Hawaii’s native people." She noted that the school was founded in 2001 as an alternative, auto­nomous school that was supposed to be "free from bureaucratic red tape."

"Our charter laid out specifically that the entire operation was grounded in ‘striving for knowledge in the Hawaiian way,’" she said. She described the decision to put her on unpaid leave as "but one of the recent misperceptions of the truth."

She said board members and commissioners, who serve as volunteers, misunderstand the situation.

"(New) board members have little to no history or understanding of the school’s administrative practices and protocols that have been in place for years," she said. "False claims show a lack of understanding of my role and responsibilities, my kuleana."

She added, "Since the summer, the Charter School Commission has maliciously attacked Halau Lokahi."

That in turn depressed its enrollment and exacerbated its financial woes, she said.

"This is a complex matter stemming from ongoing inequitable funding and facilities issues that have been protested against since our startup," Allbrett said.

Halau Lokahi stopped paying rent and salaries and ran up a $500,000 debt before the end of the last school year. The charter commission demanded a change in leadership before giving the school a new annual contract.

A new five-member governing board took office in July, but three members resigned last month. Replacements have been named, along with new interim co-directors for the school.

The board plans to restructure the school over winter break by laying off the entire staff and hiring a smaller faculty, based on qualifications, for next semester. The goal is to cut personnel costs by 50 percent so the campus can stay financially solvent through June.

According to a commission staff report dated Dec. 11, Laara Allbrett continued signing checks for the school even after she resigned, and she and a relative had debit cards for the school’s bank account. Earlier this month, the school told the commission that account signatories had been changed and the debit cards canceled.

Other relatives on staff are Laara Allbrett’s daughter Kari Kalima, an operations specialist who is on the governing board; son Kealii Bright and son-in-law Kalani Kalima, both teachers; and Bright’s partner, an accounting clerk.

The commission is withholding the next distribution of per-pupil funding until Halau Lokahi reports by Jan. 2 on the status and results of the school’s restructuring efforts. The money will be released after commissioners decide "whether there is a reasonable likelihood that the school can successfully continue operations through the end of the 2014-15 school year," according to a motion passed Dec. 11.