UNO was accused of awarding construction contracts to insiders- including those with familial ties to the organization.
On Tuesday, UNO officials announced a big management shakeup, which they hope will earn the continuation of funds needed to build a charter high school on Chicago's Southwest Side.
At a press conference, UNO CEO Juan Rangel admitted he had "failed" and addressed the questions that had been raised.
"Those questions included whether two construction contracts owned by the brothers of Miguel d'Escoto, an UNO official at the time, were appropriate. In addition, other questions have been raised about how UNO conducts its business. For UNO to get into business relationships with family members is not appropriate," said UNO CEO Juan Rangel.
Among the changes, Rangel will step down as president and will no longer serve on the UNO board. However, he will continue to hold the title of CEO.
Meanwhile, construction of the charter high school remains on hold until the $98 million in grants becomes available again. UNO is hoping the changes announced on Tuesday will help free up the grant money so construction can be completed.
UNO officials say they are prepared to accept all reform recommendations made by a judge who independently reviewed the organization's activity.
"I have read the judge's report and we are committed to these reforms and we will make them happen. Once in place, the new board will have to formally adopt the judge's report. . . This is going to be an open and transparent process," said Martin Cabreras Jr., the new chairman of the UNO board.
Still, community leaders and parents say they are upset even after Rangel apologized and promised better business practices. Some believe a restructuring of the board is not enough.
"I know I speak for many leaders who feel Mr. Rangel should resign as CEO for the good of the organization, students and the broader community. His ethical lapses in judgement have continued to put a black mark on both the Latino community and the charter schools," said Sylvia Puente, executive director of the Latino Policy Forum.
"We think this is just the tip of the iceberg, there has been a lot of allegation over the years with the United Neighborhood Organization, not just with the charter schools," said Ray Lopez Calderon, Common Cause Illinois.
Meanwhile, some charter school parents say they are worried because they do not know what will happen with the high school.