Continuity mistake: In the opening flashback, when Dr. Mixture talks about how she "nods and prods" and then watches her patients' lives fall apart, her hands change positions between cuts.
Continuity mistake: When the living-doll version of Glen/Glenda/GG is revealed, after they thank Tiffany for giving them a makeover, the way they are holding the mirror changes instantly between cuts. This then continues throughout the rest of the scene, with them holding the mirror in a different way between shots probably a dozen times.
Answer: They were blamed for the death of Jake's foster brother, which was deemed a terrible accident, and they were sent to the reform school as a punishment. Presumably, when they had to leave the reform school given what happened, they were instead given community service as punishment.
TedStixon