VISTA -- A county report released this week says poor judgment and lax oversight led to several problems at North County's largest charter school, where allegations of money mismanagement, nepotism and conflicts of interest erupted into an ugly power struggle last year.

The controversy at Vista-based Eagles Peak Charter School has since subsided; the massive academy split into two separate schools in early 2007. No criminal charges were filed against anyone at either school.

The county report says problems from the past could continue to haunt Eagles Peak, including the possibility that the school will have to return roughly $7.3 million in state funding. The school that branched off, River Springs Charter School, is not included in the audit and would not have to share that burden.

The report was released Tuesday by the San Diego Office of Education, which hired an auditing firm to look into 12 allegations against former administrators at the school that had been lodged by its board of directors. The report specifically studies what it describes as the actions of six top administrators who have since left Eagles Peak.

In addition to examining each of the allegations, the report offers recommendations for how to get the school back on track, including repaying $7.3 million in state funding that may have been based on falsely reported attendance figures.

The report also suggests that Eagles Peak develop policies for dealing with nepotism and conflict of interest, and that it streamline how the school reports attendance.

Eagles Peak executive director Rich Alderson, who took the helm after the controversy erupted, said Wednesday that administrators are already working to address most of the recommendations and have already made many changes. However, he said, there is still plenty to do.

"Certainly, we have our work cut out for us," he said. "We have quite a burden to overcome, but I'm quite confident that we can."

The report doesn't place all of the blame on former administrators. The school's board of directors contributed to the problems by not keeping an eye on expenses, the audit states. Before last year, the school board "provided minimal monitoring, at best," according to the report.

The report specifically examines several decisions and transactions by former Eagles Peak Executive Director Kathleen Hermsmeyer and her management team, including $18,284 worth of food purchases, $32,458 in balance transfers onto school credit cards and the lease of a beach-front condominium for visiting administrators.

Hermsmeyer didn't return phone calls this week. No charges of any kind have been brought against her.

Because school officials never asked for documentation of those credit card expenses, the auditors say it's impossible to determine exactly where that money went. When Hermsmeyer parted ways with the school earlier this year, the Eagles Peak board signed an agreement saying it would not seek to recoup any money.

The agreement was part of a contentious split between two factions within the school that eventually led to the formation of the two separate organizations, Eagles Peak and River Springs charter schools.

Hermsmeyer and several other administrators were hired at River Springs shortly after leaving Eagles Peak.

Eagles Peak runs sites in San Diego, Riverside and Orange counties; River Springs operates schools throughout Riverside County.

Each organization has more than 2,000 students and caters to parents who home-school or want more involvement in their children's education than traditional schools often offer.

Eagles Peak recently hired two top administrators to replace employees who have been filling in since the leadership team was fired.

Now that he has a team, Alderson said he is eager to leave the school's tumultuous past behind and begin planning for the future.

"Now, we want to focus on student achievement," he said.

Contact staff writer Stacy Brandt at (760) 901-4009 or sbrandt@nctimes.com.