K–12 Local Control
Funding
The State’s Approach Has Not Ensured That
Significant Funding Is Benefiting Students as
Intended to Close Achievement Gaps
November 2019
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Elaine M. Howle State Auditor
621 Capitol Mall, Suite 1200 | Sacramento, CA 95814 | 916.445.0255 | 916.327.0019 fax | www.auditor.ca.gov
November ,
2019‑ 101
e Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California
Dear Governor and Legislative Leaders:
As directed by the Joint Legislative Audit Committee, my office conducted an audit of the funding
that the State provides to school districts under the Local Control Funding Formula (LCFF). Our
assessment focused on state and district efforts to implement LCFF, and the following report details
the audit’s findings and conclusions. In general, we determined that theState’s approach to LCFF
has not ensured that funding is benefiting students as intended.
e State intended for LCFF to provide more local control over the spending of state K– funds
and to improve educational outcomes among certain student groups. Specifically, in addition to base
funding that districts can use for any local educational purpose, LCFF would also provide districts
with supplemental and concentration funds based on the proportions of students they serve who
are English learners, youth in foster care, and those from households with low incomes (intended
student groups).
We are concerned that the State does not explicitly require districts to spend their supplemental and
concentration funds on the intended student groups or to track how they spend those funds; therefore,
neither state nor local stakeholders have adequate information to assess the impact of those funds
on intended student groups. Further compounding the problem, the State adopted regulations that
deferred full implementation of the supplemental and concentration funding formulas as partof
the transition from the previous funding model to LCFF. Since fiscal year –, this deferral
offull formula implementation has caused the three districts we reviewed to identify approximately
. million as being part of its base funds rather than supplemental and concentration funds.
We also had difficulty determining the extent to which the districts used those funds to increase or
improve services for intended student groups because of unclear descriptions in their local control
and accountability plans.
e State has an opportunity to take steps toward learning more about the effectiveness of
billions ofdollars that it allocates for K– education. By collecting additional information about
districts’ uses of supplemental and concentration funds, the State could begin to determine
howdistricts’spending of those funds affects educational outcomes of intended student groups and
whether it needs to take further action to ensure that these students receive the services they need.
Respectfully submitted,
ELAINE M. HOWLE, CPA
California State Auditor
iv California State Auditor Report 2019-101
November 2019
Selected Abbreviations Used in This Report
CCSESA California County Superintendents Educational Services Association
CDE California Department of Education
Clovis Unified Clovis Unified School District
county offices county offices of education
LCFF Local Control Funding Formula
LCAP Local Control and Accountability Plan
Oakland Unified Oakland Unified School District
San Diego Unified San Diego Unified School District
State Board California State Board of Education
vCalifornia State Auditor Report 2019-101
November 2019
Contents
Summary 1
Introduction 5
Audit Results
California’s Approach to Overseeing Supplemental and
Concentration Funds Has Not Always Ensured That Those
Funds Benefit Intended Student Groups 15
LCAPs Have Not Consistently Provided Transparency or
Facilitated Accountability 24
The State Currently Lacks Information That Would Better
Enable It to Measure the Effectiveness of LCFF 29
Recommendations 38
Appendix A
Scope and Methodology 41
Appendix B
Trends of LCFF Funding 45
Response to the Audit
California State Board of Education 47
California State Auditor’s Comments on theResponse From
the California State Board of Education 57
vi California State Auditor Report 2019-101
November 2019
Blank page inserted for reproduction purposes only.
1California State Auditor Report 2019-101
November 2019
Summary
Results in Brief
Since fiscal year –, California has funded K– education
in part through an approach called the Local Control Funding
Formula (LCFF). e State intended for LCFF to provide more
local control over the spending of state funding and to improve
educational outcomes among certain student groups. rough
LCFF, the State envisioned providing billions of dollars each year
to local educational agencies—with most of those funds going to
school districts—in part based on their student populations of
English learners, youth in foster care, and those from households
with low incomes (intended student groups). Specifically, in
addition to a base funding amount that they can use for any local
educational purpose, districts would also receive supplemental
and concentration funds based on the proportions of intended
students they serve. e State established these supplemental and
concentration funds in recognition of the fact that districts may
require different levels of funding to provide adequate services for
the students they educate. However, the State’s approach to LCFF
places oversight responsibilities for supplemental and concentration
funds almost entirely on local entities, such as county offices of
education and local stakeholders. is approach has not always
ensured that these funds benefit the intended student groups.
We are particularly concerned that the State does not explicitly
require districts to spend their supplemental and concentration
funds on the intended student groups or to track their spending
of those funds. Without a means of tracking how districts use
supplemental and concentration funds, state and local policymakers
and other local stakeholders lack adequate information to assess
the impact of those funds on the outcomes of intended student
groups. Although regulations adopted to implement LCFF require
districts to use these funds to increase or improve services for
intended student groups, the regulations do not create an effective
means of ensuring that districts do so. Districts must identify in
their annual local control and accountability plans (LCAPs) the
supplemental and concentration funds they expect to receive and
spend. LCAPs provide a key opportunity for stakeholders to ensure
that districts direct the funds toward the intended student groups.
However, districts can treat any supplemental and concentration
funds that they do not fully spend in a given year as base funds in
the following year, meaning that the districts can use the funds
for general purposes that do not directly serve intended student
groups. Despite this lack of restriction, the State has not established
Audit Highlights . . .
Our audit of the funding that the State
provides to school districts under the LCFF
revealed the following:
» The State’s approach to LCFF has not
ensured that funding is benefiting
intended student groups and closing
achievement gaps.
» The State does not explicitly require
districts to spend their supplemental
and concentration funds on the intended
student groups or to track their spending
of those funds.
• Districts can treat any unspent
supplemental and concentration funds
in a given year as base funds in the
following year and can use those funds
for general purposes.
» Since fiscal year 2013–14, the deferral
of full formula implementation to
LCFF has caused the three districts we
reviewed to identify $320 million as
being part of their base funds rather than
supplemental and concentration funds.
» Districts do not always include clear
information in their LCAPs regarding
their use of supplemental and
concentration funds.
» Policymakers and stakeholders lack
adequate information to assess
the impact of supplemental and
concentration funds on the educational
outcomes of the intended student groups.
California State Auditor Report 2019-101
November 2019
2
a process for districts to track supplemental and concentration
funds that remain unspent at the end of the year and to ensure that
they spend those funds appropriately.
Our review of three large districts suggests that the State’s approach
for determining supplemental and concentration funds has led
districts to identify hundreds of millions of dollars of LCFF funding
as base funds rather than supplemental and concentration funds
since it implemented LCFF in fiscal year –. For the transition
from its previous funding model to LCFF, the State adopted
regulations that required districts to estimate their supplemental
and concentration funds based on prior-year spending, rather
than on the supplemental and concentration funding formulas
described in state law, which are based on districts percentages of
intended student groups. is approach essentially deferred full
implementation of these formulas. It also resulted in a difference
of approximately . million that the three districts identified
as base funds, rather than supplemental and concentration funds
for fiscal years – through –. In other words, by
directing districts to base their estimates on prior-year spending,
they identified amounts of supplemental and concentration funds
that were similar to amounts they had already been providing
before LCFF. If all districts statewide estimated at similar rates,
we believe that the regulations have likely led districts to identify
billions of dollars of LCFF funding as base rather than supplemental
and concentration funds since the inception of LCFF in fiscal
year –. By deferring the full implementation, the State also
likely deferred improved educational outcomes for the intended
studentgroups.
Moreover, even when districts did report supplemental and
concentration funds in their LCAPs, we had difficulty determining
whether or how the districts’ use of those funds increased or
improved services for intended student groups—a difficulty
that stakeholders likely share. One challenge is that the current
requirement districts must meet for spending supplemental
and concentration funds to benefit intended student groups is
essentially meaningless. Specifically, a district must describe in its
LCAP how it will increase or improve services for those students in
proportion to the amount of supplemental and concentration funds
it receives. However, it is unclear how a district would demonstrate
that it increased or improved services by a proportion, and neither
county offices of education nor the California Department of
Education are responsible for verifying whether districts actually
met the required proportional increases. Another problem is that
the legal requirements for county offices of education to approve
districts’ LCAPs, such as ensuring that they adhere to the State’s
LCAP template, are insufficient to ensure that those LCAPs are
clear and effective. When districts fail to clearly demonstrate
3California State Auditor Report 2019-101
November 2019
how they use supplemental and concentration funds to benefit
intended student groups, it not only reduces transparency but also
puts the districts at risk of stakeholders’ submitting complaints or
filinglawsuits.
Although the State intended LCFF to improve the educational
outcomes of the intended student groups, measuring the
effectiveness of LCFF with any precision remains difficult. e
California School Dashboard (dashboard) displays on a website
results for performance indicators across several student subgroups
and is one of the State’s accountability tools for LCFF. However,
it includes only two years of results so far, and . More
significantly, the State has not required districts to track and report
their expenditures of supplemental and concentration funds in
a way that aligns with the dashboard indicators, so determining
whether a particular district’s use of those funds is effectively
improving the performance of the intended student groups it
serves is challenging. Further, although districts must report in
their LCAPs information about the services on which they have
spent their supplemental and concentration funds, they often do
not effectively analyze whether those services have been successful.
As a result, stakeholders may struggle to hold districts accountable
for continuing to fund effective services and discontinuing
ineffectiveservices.
e State now has an opportunity to take an important step toward
learning more about the effectiveness of billions of dollars that it
allocates for K– education. We acknowledge that local control
is a key principle of LCFF, and we do not advocate undermining
that principle. However, implementation of a statewide tracking
mechanism for supplemental and concentration funds could
provide information to assess the impact of those funds on the
educational outcomes of intended student groups. For instance,
such a mechanism would provide assurance that districts spend
all of their supplemental and concentration funds for their
intended purpose. In addition, it would enable the State and
other stakeholders to better evaluate the effectiveness of districts’
spending strategies and the effectiveness of LCFF generally. By
collecting and reporting additional information about districts’ uses
of supplemental and concentration funds, the State could begin to
determine how districts’ spending of those funds affects students
and whether it needs to take further action to ensure that these
students receive the services they need.
California State Auditor Report 2019-101
November 2019
4
Selected Recommendations
To ensure that intended student groups receive the maximum
benefit from supplemental and concentration funds, the Legislature
should take the following actions:
• Amend state law to require districts and other local educational
agencies to identify any unspent supplemental and concentration
funds by annually reconciling the estimated amounts of
thesefunds they include in their LCAPs with the actual amounts
of funding the State reports apportioning to them.
• Amend state law to specify that unspent supplemental and
concentration funds at year-end must retain their designation
to increase and improve services for intended student
groupsandbe spent in a following year, and it should require
districts and other local educational agencies to identify in their
LCAPs the total amounts of any unspent supplemental and
concentration funds from the previous year.
To provide additional data for the State and other stakeholders
and to align spending information with the dashboard indicators
or other student outcomes, the Legislature should take the
followingactions:
• Require the State to direct districts and other local educational
agencies to track and report to it the total amount of
supplemental and concentration funds they receive and spend
each year.
• Require the State to identify a common method that districts
and other local educational agencies must use to report the
types of services on which they spend their supplemental and
concentration funds.
Agency Comment
e State Board agreed with three of the four recommendations we
made to it.
5California State Auditor Report 2019-101
November 2019
Introduction
Background
e quality of California’s public education system directly affects
the lives of many of the State’s residents. About million students
in the K– grade levels attend public school in California. Since
fiscal year –, California has funded K– education in part
through an approach called the Local Control Funding Formula
(LCFF).
1
rough LCFF, the State provides billions of dollars each
year to local educational agencies: county offices of education
(county offices), school districts, and charter schools. School
districts receive most of those funds. For instance, districts received
nearly percent of the more than billion that the California
Department of Education (CDE) apportioned through LCFF in
fiscal year –. About billion of this billion consisted
of supplemental and concentration funds that CDE apportioned
to districts based on their student populations of English learners,
youth in foster care, and those from households with low incomes.
(intended student groups).
e State’s policy—consistent with its constitutional obligation—is
to afford all students in public schools equal access to educational
opportunity. e State intended these supplemental and
concentration funds—and LCFF generally—to establish more
equitable funding by recognizing that districts may require different
levels of funding to provide adequate services for the students they
educate. Nonetheless, state data demonstrate that certain student
groups have poorer educational outcomes, including academic and
other performance outcomes, in comparison to students overall
(achievement gaps). ese achievement gaps have likely contributed
to California’s consistently ranking below the national average
on metrics such as National Assessment of Educational Progress
reading and mathematics scores. One of the goals of LCFF is to
address achievement gaps among intended student groups, and
research indicates that intended student groups frequently need
additional services and other support to be successful in school.
For this audit, we selected three large districts to review—Clovis
Unified School District (Clovis Unified), Oakland Unified School
District (Oakland Unified), and San Diego Unified School District
(San Diego Unified). We examined whether these districts have
used supplemental and concentration funds to provide services
to the intended student groups and whether those services have
improved the intended student groups’ educational outcomes.
1
Local educational agencies may also receive other types of state and federal funding, including
special education funding and Every Student Succeeds Act Title funding.
California State Auditor Report 2019-101
November 2019
6
California Funds K–12 Education Primarily Through LCFF
e State made an historic shift in the way it funds K– education
when it implemented LCFF more than six years ago. LCFF was
intended to simplify the State’s funding model and provide school
districts with more local control over how they spend the state
funding they receive. Before LCFF, districts received a certain amount
of funding for each student, known as general‑purpose funding
or revenue limit funding. ey also received additional funding—
commonly called categorical funds—that the State designated
for specific purposes, such as serving special education students
or reducing class sizes. Districts considered the restrictions and
administrative requirements associated with categorical funds to be
burdensome. At one time, the State had more than categorically
funded programs, many of which had different spending and
eligibilityrequirements.
In contrast, LCFF has three primary funding components: base funds,
supplemental funds, and concentration funds. State law establishes
base funding rates by grade span, such as kindergarten through
thirdgrade, and requires CDE to compute each district’s base fund
amount by multiplying those rates by the district’s average daily student
attendance. Depending on its percentage of students in the intended
student groups, a district can receive an additional percent of the
set base rate as supplemental funds. When more than percent of a
district’s students are in the intended student groups, the district would
also receive as concentration funds an additional percent of the base
rate for its percentage of students above this threshold. Figure details
LCFF’s funding components. Unlike categorical funds, LCFF funding
is generally unrestricted, meaning that districts can use it for any local
educational purpose not prohibited by law. However, districts must
use supplemental and concentration funds to increase or improve
services for intended student groups in proportion to the amount of
supplemental and concentration funds they receive.
Although the Legislature implemented LCFF in fiscal year –,
it did not fully fund it until fiscal year – because LCFF
represented a significant increase in the amount of educational
funding the State was providing. Consequently, the funding formulas
for base, supplemental, and concentration funds in state law
represented a “target” funding amount, not the amounts that districts
actually received. Instead, during this phase-in period, the State
implemented a transition entitlement. is entitlement consisted of
a funding floor amount and a transition adjustment amount known
as gap funding. However, it did not separately identify the portions
of the transition entitlements that were base, supplemental, and
concentration funds. e funding floor consisted of a district’s fiscal
year – revenue limit funding, divided by its fiscal year –
average daily attendance, and then multiplied by its current-year
7California State Auditor Report 2019-101
November 2019
average daily attendance. e State based the amount of gap funding
a district received each year from fiscal year – through –
on the amount of funding provided in the annual Budget Act to
incrementally reduce over time the gap between districts’ funding
floors and the target amounts they would receive when the LCFF
became fully funded.
Figure 1
CDE Calculates Target Supplemental and Concentration Funds for Districts Based on Their Populations of Intended
Student Groups
A district has 100 students
Of those 100 students, 75 of them are in intended student groups (75
%
)
The base amount is $500 per student
100 students
$
500
$50,000
BASE FUNDS
SUPPLEMENTAL FUNDS
CONCENTRATION FUNDS
HYPOTHETICAL
EXAMPLE
A district’s base funding is
determined by its students’ average
daily attendance and grade level.
A district receives an extra 20 percent
of the base funding rate for its
percentage of intended students.
When the intended student groups exceed
55 percent of a district’s total enrollment, it
receives an additional 50 percent of the base
funding rate for its percentage of intended
students above the 55 percent threshold.
BASE FUNDS SUPPLEMENTAL FUNDS CONCENTRATION FUNDS
x
+
$50,000
20
%
75
%
$7,500
$50,000
50
%
(
75
% –
55
%
)
$5,000
x
x
x
x
$62,500
Total
LCFF Funding
$50,000
$7,500
$5,000
Source: Analysis of state law.
From fiscal years – through –, CDE calculated the target
amounts and transition entitlements for each district and reported the
funding amounts on its website multiple times throughout each year—
updating the amounts as it received additional attendanceinformation.
8 California State Auditor Report 2019-101
November 2019
However, although CDE reported base, supplemental,
and concentration proportions of the target amount,
the transition entitlement that districts actually
received did not separately identify these proportions.
Consequently, districts estimated the amounts of
LCFF funding they expected to receive and the
amounts of supplemental and concentration funds to
establish the proportion by which they must increase
or improve services for intended student groups. e
State Board of Education (State Board) adopted
regulations in instructing districts to estimate
their supplemental and concentration funds based
primarily on prior-year spending levels during the
phase-in period. After the end of each year, CDE
reported the total annual funding it had apportioned
to each district. e text box summarizes the basis for
determining supplemental and concentration funds
since LCFF was implemented in fiscal year–.
e three districts we selected to review receive different amounts of
LCFF funding. Figure presents information about the districts’
student populations and identifies the fiscal year – LCFF
funding that the districts had received as of June . Of the three,
Oakland Unified has the highest proportion of students in the
intended student groups and received the highest
proportion of supplemental and concentration
funds. Clovis Unified has the lowest proportion of
students in the intended student groups and
received supplemental funds but no
concentrationfunds.
The State Established Local Control and
Accountability Plans to Enhance Transparency
andAccountability for LCFF Funding
To enhance transparency and accountability for
LCFF funding, state law requires each school district
to develop and update annually—by July —a local
control and accountability plan (LCAP). e LCAP
is a three-year spending plan that describes the
district’s annual goals, services, and expenditures to
support positive student outcomes and to address
state and local priorities. In its LCAP, the district
describes its goals and the particular services
it plans to provide to meet those goals. When
developing its LCAP, each district must adhere to
a template that the State Board approves. As the
textbox describes, the LCAP template primarily
Before Full Implementation of LCFF, Supplemental
and Concentration Funds Were Not Based on
Percentages of Intended Student Groups
FISCAL
YEARS
BASIS FOR DETERMINING
SUPPLEMENTAL AND
CONCENTRATION FUNDS
LCFF Transition
Period
2013–14
through
2018–19
Primarily by prior year
spending amounts
LCFF Full
Implementation
2019–20
forward
Primarily by enrollment
percentages of intended
student groups
Source: Analysis of state law, CDE documents, and district
documents.
Five Primary Sections of the LCAP
• Summary: provides a brief overview of important
elements contained within the LCAP.
• Annual Update: captures the district’s progress toward the
expected outcomes for each goal from the prior year and
estimated actual expenditures.
• Stakeholder Engagement: describes the consultation
process the district had with parents, students, school
personnel, and the community, including how that
engagement contributed to the development of the LCAP.
• Goals, Actions, and Services: focuses on the goals, actions,
expenditures, and progress indicators that the district
hasidentified.
• Demonstration of Increased or Improved Services:
details the district’s use of supplemental and concentration
funds to meet the requirement to increase or improve
services proportionally to the increase in these funds.
This is the single section of the LCAP focused solely on
supplemental and concentration funds.
Source: LCAP template and CCSESA LCAP approval manual.
9California State Auditor Report 2019-101
November 2019
consists of fivesections. In addition to these five sections, the State
Board added to the – LCAP an addendum related to federal
education law and added to the – LCAP a brief, accessible
budget overview for parents that summarizes the LCAP’s important
elements. e State Board is currently considering additional
revisions to the – template.
Figure 2
Because of Differences in Their Student Populations, Our Selected Districts Received Varying Amounts of LCFF
Funding for Fiscal Year 2018–19
�342.6
MILLION
�29.9
MILLION
�0
�284.8
MILLION
�43.7
MILLION
�31.0
MILLION
�359.5 MILLION
�821.1
MILLION
�101.0
MILLION
�26.8
MILLION
�948.9 MILLION
�
25 MILLION
AVERAGE DAILY
ATTENDANCE
BASE FUNDS
SUPPLEMENTAL
FUNDS
CONCENTRATION
FUNDS
34,270
41,160
98,760
INTENDED
STUDENT GROUPS
77
%
44
%
62
%
Total LCFF
*
Clovis Unified
�372.5 MILLION
Oakland Unified
San Diego Unified
Source: CDE’s 2018–19 principal apportionment data.
* Total LCFF does not include add-on funding that districts received through the Targeted Instructional Improvement Block Grant program, the
Home-to-School Transportation program, and the Small School District Transportation program.
10 California State Auditor Report 2019-101
November 2019
In the last section of the LCAP, each district must identify and report
the amount of supplemental and concentration funds it has estimated
that it will receive for the year, and it must demonstrate how it plans
to meet expenditure requirements for these funds. As we described
previously, each district must use its supplemental and concentration
funds to increase or improve services for intended students groups in
proportion to the amount of supplemental and concentration funds
they receive. ese increases or improvements must be in proportion
to the amount of supplemental and concentration funds that the
district receives based on its population of intended student groups. For
example, if a district’s supplemental and concentration funds for fiscal
year – represent percent of its total LCFF funding, that district
must increase or improve services for its intended student groups
by percent compared to the services provided for the rest of its
students in that year. In the final section of the LCAP, each district must
explain how the services it is providing increase or improve services
for intended student groups. Although the three districts we reviewed
each allocated some portion of its supplemental and concentration
funds directly to schools to spend, they also planned to use the funds
for a significant number of districtwide services and programs, such as
reducing class sizes or providing school nurses, as we discuss later.
As Figure indicates, a number of different state and local entities are
involved in overseeing and making decisions related to LCFF funding.
For example, local stakeholders, such as parents, teachers, and other
interested groups, provide input and oversight to ensure that districts
develop clear and informative LCAPs. Stakeholders review and
provide comments on a district’s draft LCAP. In addition, they can
submit complaints to the district or county office, and appeal to CDE,
if they believe a district has violated state law in completing its LCAP.
In most instances, county offices are responsible
for approving LCAPs for the districts within their
counties.
2
Figure depicts the LCAP development
and approval process. e California County
Superintendents Educational Services Association
(CCSESA) has developed an LCAP approval manual
that county offices can use as a guide during their
reviews. A county office must approve a district’s
LCAP if the LCAP meets the conditions listed in the
text box. If a county office rejects a district’s LCAP, it
must provide assistance to that district that focuses
on revising the LCAP so that the county office can
approve it before October of that year. is date is
the deadline for county offices to approve LCAPs.
2
The exception is when a county has jurisdiction over a single school district; in these circumstances,
CDE approves the district’s LCAP.
LCAP Approval Requirements for County Offices
The county office must approve a district’s LCAP on or
before October 8 if it determines all of the following aretrue:
• The district’s LCAP adheres to the LCAP template.
• The district’s budget includes expenditures sufficient to
implement the services included in the LCAP.
• The district’s LCAP adheres to the expenditure
requirements for supplemental and concentration funds.
Source: State law.
11California State Auditor Report 2019-101
November 2019
Figure 3
LCFF Relies on Local Decision Making and Oversight
58 County Offices
County offices approve districts’ LCAPs and
ensure that the LCAPs adhere to spending
requirements for supplemental and
concentration funds.
Approximately 1,000 Districts
Districts decide how to spend
supplemental and concentration
funds and explain their decisions in
their LCAPs.
Approximately 10,000 School Sites
School sites receive and spend some of
the districts’ supplemental and
concentration funds.
COUNTIES
STATE
DISTRICTS
STAKEHOLDERS
SCHOOLS
The State Board is California’s K-12 policy-making
body that adopts regulations and the LCAP template.
CDE collects and reports certain data from county offices
and districts, manages the dashboard, provides
guidance to county offices and districts, and issues
reports as part of the uniform complaint process.
Districts must consult with stakeholders, including parents and
teachers, in developing their LCAPs. They must hold public
meetings to solicit recommendations from members of the
public regarding the services and expenditures in their LCAPs.
CCESA developed an LCAP approval
manual, which county offices can use as
guidance when approving LCAPs.
STATE BOARD
CDE
Key oversight entity for districts’
spending of supplemental and
concentration funds
37+15=
24+15=
=87
10=99
Source: Analysis of state law, CDE documents, and the CCSESA LCAP Approval Manual.
12 California State Auditor Report 2019-101
November 2019
Figure 4
LCAP Development and Approval Is an Ongoing Process
APRIL • MAY
FEBRUARY • MARCH
AUGUST • SEPTEMBER
JUNE • JULY
OCTOBER • NOVEMBERDECEMBER • JANUARYOCTOBER • NOVEMBER
The school year begins
generally in August.
County offices and local stakeholders, such as parents, are the main safeguards that exist to ensure that
districts develop clear and informative LCAPs. Thus, the quality of the county offices’ review and the
quality of stakeholder engagement can have a significant impact on the LCAPs.
(Usually in December)
CDE releases the California
School Dashboard.
Districts begin developing their LCAPs for the upcoming school year,
and engage stakeholders to gather input and feedback for the LCAP.
OCTOBER 8*
Final day that county
offices may approve LCAPs.
County offices conduct LCAP trainings for district staff.
County offices conduct
preliminary reviews of
districts’ LCAPs.
STATE
DISTRICTS
COUNTY OFFICES
Districts work with their county
office to address concerns
related to their LCAPs.
County offices conduct
formal LCAP reviews.
JULY 1
Final day that districts may
submit their LCAPs to the county.
Source: Analysis of state laws, CCSESA manual, and other documents.
* Though LCAP approval is required by October 8, the recommended approval date is September 15 to coincide with budget approval timelines. If a district’s LCAP is not approved by September 15,
aconditional budget approval may be an option, where appropriate.
13California State Auditor Report 2019-101
November 2019
The California School Dashboard and Statewide System of Support
Are the Core of the State’s Accountability System
e State measures how well schools and districts are meeting the
needs of all students through the California School Dashboard
(dashboard). In conjunction with LCFF, state law
requires the State to develop and maintain an
evaluation tool for publicly reporting performance
data for specified student groups. To meet this
requirement and to provide transparency and
accountability, the State introduced the dashboard
in March . e dashboard presents student
performance information at both thedistrict level
and the school-site level. As the textbox shows,
the dashboard displays the results for sevencore
performance indicators across a number of
student subgroups, including the threeintended
student groups. e dashboard generally uses data
that districts submit to CDE. CDE has released
twoyears of results, for and.
A primary function of the dashboard, in addition to
publishing performance data, is to identify districts
that are failing to close achievement gaps and
need additional county or state assistance through
the statewide system of support. e State Board
adopted this system in . As Figure shows, the
system provides threelevels of support: voluntary
technical assistance, differentiated assistance, and
intensive intervention. Because districts choose
to seek technical assistance and CDE’s intensive
intervention is for districts that demonstrate
persistent performance issues over a number
of years, the State currently uses differentiated
assistance as its primary process for ensuring that
districts receive individualized assistance to close
achievement gaps.
A county office must offer differentiated assistance
to a school district if any student group within
that district does not meet performance standards
for two or more performance indicators on
the dashboard. According to data from the
dashboard, more than percent of school
districts statewide were eligible for differentiated
assistance for at least one student group, which
indicates that significant achievement gaps persist
throughout theState.
Dashboard Indicators and Student Groups
State Indicators*
English Language Arts: Based on state testing results
for English language arts (Smarter Balanced Summative
Assessment) for grades three through eight and grade 11.
Mathematics: Based on state testing results for
mathematics (Smarter Balanced Summative Assessment)
for grades three through eight and grade 11.
English Learner Progress: Based on results from the
English Language Proficiency Assessments for California.
College/Career: Based on various measures that evaluate
preparedness for college or career, such as career
technical education pathway completion, A‑G course
completion, and Advanced Placement exams.
Graduation Rate: Based on the number of students who
earn a high school diploma within four years of entering
ninth grade.
Chronic Absenteeism: Based on the number of students
in kindergarten through grade eight who were absent
at least 10 percent or more of the instructional days that
they were enrolled to attend a school.
Suspension Rate: Based on the number of students who
were suspended at least once during the school year.
Student Groups
Intended student groups for supplemental and
concentration funds:
English Learners, Youth in Foster Care, Students from
Households with Low Incomes.
Other student groups: Students Experiencing
Homelessness, Students With Disabilities, African
American, American Indian, Asian, Filipino, Hispanic,
Pacific Islander, White, and Two or MoreRaces.
Source: Analysis of the 2018 dashboard and the 2018 California
School Dashboard Technical Guide.
* The dashboard also reports measures of progress on local
indicators for individual local educational agencies based on
information that they collect locally, such as appropriately
assigned teachers, parent engagement, and school climate.
14 California State Auditor Report 2019-101
November 2019
Figure 5
Differentiated Assistance Is the State’s Primary Process for Addressing Achievement Gaps
Voluntary Technical Assistance
LEVEL 1
State and local agencies provide support
resources and tools that districts may use
to improve student performance.
Differentiated Assistance
LEVEL 2
California’s System of Suppport
County offices* provide individually
designed assistance for districts to address
performance issues, including achievement
gaps among student groups.
Intensive Intervention
LEVEL 3
The state superintendent of public instruction
may require further interventions for districts
with persistent performance issues that do
not improve over a specified time period.
CDE implemented this level in 2019.
CDE releases the dashboard.
County offices identify which districts have
achievement gaps that require differentiated
assistance. A county office must offer
differentiated assistance to a district if any
student group has dashboard indicators at red or
not met for two or more LCFF priorities.
County offices work with these districts to review
dashboard and other local data to determine strengths
and weaknesses and to identify how and why
subgroups are underperforming.
With guidance from county offices,
districts identify effective, evidence-based
programs and practices that will address
their areas of weakness.
County offices send districts a final letter
summarizing the identified programs and
practices.
Districts incorporate into their LCAPs
programs and practices they identified with
their county offices.
December
The following summer and following school year
Toward the end of the school year
1
3
2
4
5
6
Source: Analysis of state law and CDE documents.
* CDE provides differentiated assistance for county-run schools such as juvenile court schools.
15California State Auditor Report 2019-101
November 2019
Audit Results
California’s Approach to Overseeing Supplemental and Concentration
Funds Has Not Always Ensured That Those Funds Benefit Intended
Student Groups
e State’s implementation of LCFF has not yet proven effective at
increasing transparency and accountability for the supplemental and
concentration funds that CDE allocates to districts. Specifically, state
law does not explicitly require districts to use unspent supplemental
and concentration funds in the following year to benefit intended
student groups, nor does it require that they track their spending of
these funds. Furthermore, existing state law has allowed the districts
we reviewed to identify hundreds of millions of dollars in LCFF
funding as base rather than supplemental and concentration funds
during the phase-in period. If the Legislature intends for districts
touse all of the supplemental and concentration funds it allocates to
them to specifically increase or improve services for intended student
groups, it should amend state law to establish this requirement.
Additionally, districts do not always include clear information in their
LCAPs regarding their use of supplemental and concentration funds,
even though LCAPs are a key accountability tool for ensuring that
they budget and spend these funds to increase and improve services
for the intended student groups. e LCAPs’ lack of clarity has
reduced transparency and resulted in some stakeholders submitting
formal complaints and filing lawsuits in court. Until the State ensures
that districts spend all supplemental and concentration funds to
benefit the intended student groups, and that they provide clear,
accessible information regarding that spending in their LCAPs, the
intended student groups may not receive the services necessary to
close the State’s persistent achievement gaps.
The State Has Not Ensured That Districts Spend Supplemental and
Concentration Funds on Services for Intended Student Groups
As we discuss in the Introduction, the State instituted LCFF to
provide districts with supplemental and concentration funds
toimprove the educational outcomes of the intended student groups
and to increase transparency and accountability related to education
funding. However, LCFF has not yet successfully accomplished
these goals. As we discuss later, available data show improvements
in some student outcome measures since the State implemented
LCFF, although achievement gaps persist. In acknowledgment of
the fact that educating the intended student groups is more costly,
the State apportions the additional funds to districts based on their
intended student group populations; as a result, we would have
expected districts to track their spending of these funds. Instead,
a series of impediments hinders stakeholders’ ability to determine
California State Auditor Report 2019-101
November 2019
16
with assurance the amount of supplemental and concentration funds
that districts actually spend for the benefit of the intended student
groups, even though these are the students for whom they receive the
additional funding.
Most significantly, the current requirement districts must meet
when spending supplemental and concentration funds is essentially
meaningless. State law does not explicitly require that districts spend
all their supplemental and concentration funds for intended student
groups; instead, it states that they must use the funds toincrease or
improve services for those students in proportion to theamount of
supplemental and concentration funds they receive. For example,
in its fiscal year – LCAP, Clovis Unified calculated that its
supplemental funds represented an increase of . percent over its
LCFF base funds. Consequently, state law requires Clovis Unified
to increase or improve services for intended student groups by
.percent as compared to all students. However, it is unclear how
a district would demonstrate that it increased or improved services
by a specific percentage. In fact, two of the three districts we visited
stated that measuring objectively whether they have increased or
improved services by a specific percentage for any one student group
in comparison to all students is difficult. Furthermore, neither the
county offices nor CDE is responsible for verifying that districts have
achieved the required proportional increases.
In other words, state law created a mechanism to give additional
funds to districts that have higher proportions of intended student
groups, but it did not explicitly require or provide a means of ensuring
that those districts actually spent their additional funds on the specific
student groups for whom they were allocated. When we discussed this
lack of an explicit requirement with the State Board’s deputy policy
director and assistant counsel, he stated that he believes state law
reflects a recognition that investing to improve the overall education
program at a school site or within a district can be an effective way
to meet the needs of intended student groups. He added that tying a
legal obligation to dollar-to-dollar increases in expenditures would
discourage districts from implementing approaches that would
improve core programs in ways that better meet the needs of intended
students. Although we do not disagree with this premise, LCFF’s
intent and CDE’s own regulations make clear that supplemental and
concentration funds are fundamentally different from base funds—
districts must use them to increase or improve services for intended
student groups.
e second impediment to ensuring that districts use supplemental
and concentration funds for the intended student groups is that
the State does not require districts to track how they spend these
funds. Of the three districts we reviewed, only Clovis Unified
generally tracked its supplemental funds in its accounting system.
State law does not explicitly
require that districts spend all their
supplemental and concentration
funds for intended student groups.
17California State Auditor Report 2019-101
November 2019
e other twodistricts’ accounting systems tracked supplemental and
concentration funds inconsistently. At these districts, we struggled to
locate financial information to determine how much supplemental
and concentration funds they had received and if they had spent that
funding to benefit the intended student groups.
Furthermore, budget and expenditure information for supplemental
and concentration funds that districts include in their LCAPs is not
always transparent. Specifically, although the LCAP template requires
districts to include budgeted expenditures and estimates of actual
expenditures for each service they provide, it does not require them
to present summary-level expenditure information in a manner
that would allow stakeholders to compare districts’ total budgeted
expenditures to their total estimated actual expenditures without
significant effort. Consequently, the LCAPs for the three districts
we visited do not enable stakeholders to easily identify whether the
districts spent all of their supplemental and concentration funds as
planned. In fact, within their LCAPs, districts reported numerous
individual expenditures. Although the LCAP template asks districts
to explain “material differences” between the individual expenditure
amounts they budgeted and the estimated actual amounts they
spent, the template does not include a place for districts to report the
overall total differences between their budgeted and estimated actual
expenditures of supplemental and concentration funds.
State Law Deferred Full Implementation of Supplemental and
Concentration Funds, Resulting in Significantly Lower Amounts Than the
Funding Formulas Would Have Provided
Given the lack of clear information in the accounting systems and
LCAPs of the three districts we reviewed, we used the numerous
expenditures they reported in the LCAPs to manually sum the
amounts of supplemental and concentration funds they had budgeted
and spent. We had two key observations from our calculations of
these expenditures. First, we found that although the formulas in state
law for calculating supplemental and concentration funds are based
on a district’s proportions of intended student groups relative to its
total enrollment, the regulations that the State Board adopted for
local educational agencies to follow during the phase-in period do not
consider these proportions. As we explain in theIntroduction, before
the State fully funded LCFF in fiscal year–, the State adopted
regulations that required districts to annually estimate how much
base, supplemental, and concentration funds they expected to receive.
Districts then used these estimates to describe in their LCAPs the
services they planned to provide to intended student groups. Under
these regulations, districts were to base their estimates on prior-year
spending. Specifically, they were to base their estimates for fiscal
year – on the amounts they spent in fiscal year – on
Budget and expenditure
information for supplemental
and concentration funds that
districts include in their LCAPs is
notalwaystransparent.
California State Auditor Report 2019-101
November 2019
18
services for intended student groups, which must be greater than
or equal tothe amount of Economic Impact Aid they spent in fiscal
year–.
3
In subsequent years, the estimate was based on the
prior-year spending.
Because the regulations did not base the estimated amounts on
districts’ populations of intended student groups, the resulting
amounts of funding districts identified as supplemental and
concentration were significantly less than the amounts we
calculated using the proportions of intended student groups.
Figure presents a hypothetical example to illustrate the different
approaches for determining how much of the LCFF funding is
supplemental and concentration funds. When we applied the
same proportions of base, supplemental, and concentration funds
that exist in state law to the total LCFF funds the three districts
received, we identified significant amounts of supplemental and
concentration funds that districts otherwise would have included
in their LCAPs, as Figure demonstrates. In fact, since the State
implemented LCFF in fiscal year –, the regulations have led
the three districts to identify approximately . million of LCFF
funding as base rather than supplemental and concentration funds.
If all districts statewide estimated supplemental and concentration
funds at rates similar to those of the three districts we reviewed,
the difference between using the approach required by regulations
and basing their estimates on the proportions of intended student
groups would have amounted to billions of dollars since LCFF’s
implementation. According to State Board documents, because
districts had been using various funding sources to provide services
to intended student groups before the adoption of LCFF, the use of
prior-year spending allows a local educational agency to estimate
the actual services provided. In other words, by directing districts
to base their estimates on prior-year spending, districts identified
amounts of supplemental and concentration funds to increase or
improve services for intended student groups that were similar to
amounts they had already been providing before LCFF. erefore,
by deferring LCFF’s full implementation, the State likely also
deferred improvements in performance outcomes for intended
student groups.
Furthermore, the State has not established adequate accountability
controls over these funds. To ensure that districts estimated
accurately all the supplemental and concentration funds they
would receive, we expected that the State would have established a
process to validate the amounts districts identified when following
3
The Economic Impact Aid program was a state categorical program for kindergarten through
grade that provided additional English language acquisition programs, support and services
for students with limited English proficiency, and State Compensatory Education services for
educationally disadvantaged youth.
Since the State implemented LCFF in
fiscal year –, the regulations
have led the threedistricts
to identify approximately
.million of LCFF funding as
base rather than supplemental and
concentration funds.
19California State Auditor Report 2019-101
November 2019
theregulations. However, the State has not established such a
validation process. As a result, the districts’ estimations are the
only method for identifying the amount of supplemental and
concentration funds, and the amounts they included in their LCAPs
are the only source of information about how much of theLCFF
funding the State provided was treated as supplemental and
concentration. In Appendix B, we provide information about each
of the three districts’ LCFF funding for fiscal years – through
–.
Figure 6
Regulations Led to Different Proportions of Base, Supplemental, and Concentration Funds Than Full
Implementation of State Law Would HaveProvided
Target LCFF amount, based on state law related to
intended student groups.
Transition LCFF amount, applying the same proportions
of base, supplemental, and concentration funds.
Transition LCFF amount, based on prior year’s spending as required
by regulations adopted by the State Board.
Base Funds
Supplemental and Concentration Funds
80
%
20
%
95
%
5
%
80
20
$200 MILLION
$112 MILLION
$133 MILLION
$160 MILLION $40 MILLION
$140 MILLION
$140 MILLION
$7
MILLION
Hypothetical First Year Funding Example
$28
MILLION
Source: Analysis of state law, CDE documents, and district documents.
20 California State Auditor Report 2019-101
November 2019
Figure 7
State Regulations Resulted in Less Supplemental and Concentration Funds for the Three Selected Districts
Auditor-Calculated Supplemental and Concentration Funding Amounts Based on Funding Formula in State Law
Districts-Budgeted Supplemental and Concentration Funding Amounts in Accordance with California Regulations
0
50
100
150
200
$250
Dollars in Millions
2014–152013–14 2015–16
Fiscal Year
2016–17 2017–18 2018–19
33.1*
170.3
78.0*
193.0
165.6
218.0
211.3
224.9
222.5
227.2
234.7
232.5
$320.6 million difference
over five fiscal years.
Source: Analysis of state law, CDE’s principal apportionment data, and district LCAPs.
* When a district did not report the amount of supplemental and concentration funds it budgeted in its LCAP, we used the amount of expenditures it
reported, as we show in Appendix B.
e second key observation we identified in our analyses of the LCAPs
of the three districts we reviewed is that even when two of these districts
included supplemental and concentration funds in their LCAP budgets,
they often did not fully spend those funds during the year in question.
For example, in fiscal year –, San Diego Unified underspent by
percent, or . million, and Oakland Unified underspent by percent,
or million. is is problematic because we could find no requirement
under current law for districts to continue using unspent supplemental
and concentration funds in the following year to increase or improve
services for intended student groups—the unspent funds essentially can
be used for any purpose in subsequent years. Although the amounts in
question represent a small percentage of the two districts’ total LCFF
funding, they could have used the funding to provide additional resources
for intended student groups, such as English language support staff or
college counselors. Without direction from the State to do so, SanDiego
identified unspent supplemental and concentration funds from fiscal
year – and included that amount with the funding identified
in its – LCAP to provide services for intendedstudentgroups.
21California State Auditor Report 2019-101
November 2019
However, if districts statewide underspend their fiscal year –
supplemental and concentration funds by just percent each year,
they will not provide about million in services for the intended
studentgroups.
Determining whether or how districts used their unspent
supplemental and concentrations funds in the following year is difficult
because of their inconsistent tracking; however, in the absence of a
requirement to carry over unspent supplemental and concentration
funds for the same purposes, districts can spend them for general
purposes, not specifically for the direct support of intended student
groups. Two of the three county offices we visited acknowledged that
current law allows districts to potentially use unspent supplemental
and concentration funds for more generalpurposes.
Although state law requires county offices to review whether districts’
budget expenditures are sufficient to implement their planned LCAP
services, it does not require the county offices to examine whether
districts budget and spend all of their supplemental and
concentration funds and provides little guidance for their
review. To approve the financial portions of districts’
LCAPs, the three county offices we reviewed use the
CCSESA LCAP approval manual as a guide. e fiscal
year – manual includes guidelines for a
compliance-based review of expenditures that would
confirm, for example, that a district identified expenditure
amounts, sources, and budget references for each service.
e manual does not include steps that county offices
should take to ensure that districts budget and spend all
of their supplemental and concentration funds.
Consequently, the Fresno and San Diego county offices
did not compare districts’ budgeted expenditures with
their estimated actual expenditures to identify potential
underspending. Ultimately, the financial reviews county
offices are required to perform appear to be a compliance
exercise rather than a critical analysis of the expenditures.
Districts Do Not Always Clearly Describe in Their LCAPs How
the Supplemental and Concentration Funds They Spend
Districtwide Principally Benefit Intended Students
Districts may spend supplemental and concentration
funds for districtwide purposes by upgrading the entire
educational program, thereby benefiting more than just
intended student groups. However, districts can spend
districtwide only if they follow the requirements we list
in the text box. Given these requirements, we would
expect districts to sufficiently describe in their LCAPs
Requirements for Spending Supplemental and
Concentration Funds Districtwide
Enrollment of intended student groups that is
55percent or more of total enrollment
A district may spend supplemental and concentration
funds districtwide if the following are true:
• It identifies in its LCAP those services that are
funded and provided on a districtwide basis.
• It describes in its LCAP how such services are
principally directed toward and are effective in
meeting its goals for its intended student groups
in state and local priority areas.
Enrollment of intended student groups that is less
than 55 percent of its total enrollment
A district may spend supplemental and concentration
funds districtwide if:
• It follows the two bulleted items above.
• It describes how those services are the most
effective use of the funds to meet its goals for
its intended student groups in state and local
priority areas. The description must provide the
basis for this determination including but not
limited to, any alternatives the district considered
and any supporting research, experience, or
educationaltheory.
Source: State regulations.
California State Auditor Report 2019-101
November 2019
22
how they had principally directed their districtwide spending of
supplemental and concentration funds toward intended student
groups. e LCAPs for the three districts we visited indicate that the
districts intended to spend supplemental and concentration funds to
pay for varying proportions of districtwide services, such as reducing
class sizes and providing parent and community resource centers.
e proportions of the districts’ services that were districtwide
ranged from to percent. However, the districts did not always
clearly describe in their LCAPs how they principally directed those
funds toward intended student groups. Specifically, for of the
expenditures we reviewed from fiscal years – and –,
the information that the three districts provided in their LCAPs was
not sufficient for us to determine whether the districtwide services
on which they planned to spend supplemental and concentration
funds would principally benefit intended students.
For example, for six of the services we tested from its –
LCAP, Clovis Unified stated that services will be principally directed
without explaining how the district will principally direct them.
In one instance, Clovis Unified wrote in its LCAP that it would
“provide professional development…, train highly qualified teachers,
and develop new curriculum units and assessments… to ensure
all students, principally directed toward [the intended student
groups], achieve at a high level.” When we asked Clovis Unified for
clarification, an assistant superintendent stated that the district
focused these services—including professional development for
teachers—on helping intended student groups. It attributed the lack
of clarity in its LCAP to the vagueness in regulations about how
districts can principally direct services toward intended student
groups. However, when districts fail to clearly explain in their LCAPs
how they plan to use supplemental and concentration funds on
districtwide services to benefit intended student groups, they reduce
transparency and accountability.
In addition, a lack of clarity puts the districts at risk of stakeholders’
submitting complaints or filing lawsuits alleging that they have
inappropriately spent the funds. In fact, CDE’s records indicate
that since August , it has issued reports for complaints
against districts—five from January through April alone—in
which stakeholders raised concerns about districts’ intended use of
supplemental and concentration funds. One of those complaints
resulted in a lawsuit, which the parties involved ultimately settled
with the district agreeing to change how it uses supplemental and
concentration funds in the future.
Districts have not always clearly demonstrated how they planned
to spend supplemental and concentration funds districtwide, likely
in part because the requirements for doing so are vague. e LCFF
regulations, the CCSESA LCAP approval manual, and the LCAP
When districts fail to clearly explain
in their LCAPs how they plan to use
supplemental and concentration
funds to benefit intended student
groups, they reduce transparency
and accountability.
23California State Auditor Report 2019-101
November 2019
template all fail to explain or provide examples of ways a district
can successfully demonstrate how its districtwide spending is
“principally directed” toward intended student groups. Although the
LCFF regulations regarding districtwide spending of supplemental
and concentration funds have been in place since , stakeholder
complaints demonstrate that some districts struggle to successfully
describe how they principally direct those funds toward intended
student groups.
Despite the difficulties that some districts have
faced in implementing the spending requirements,
CDE has not fully incorporated into its key guidance
documents the position that it has taken in its
complaint reports regarding satisfying the spending
regulations. On at least eight occasions since
May, CDE has presented a consistent position in
its reports about how districts can comply with the
regulations for districtwide spending. We summarize
CDE’s position in the textbox. Because CDE’s
comments in its complaint reports provide more
specific advice to the districts named in the reports
regarding how they can demonstrate in their LCAPs
their compliance with the spending regulations, we
would have expected it to include this information in
the LCAP template instructions to ensure consistent
understanding among all districts.
Furthermore, based on the complaints and appeals
it receives, CDE could identify common pitfalls
for districts to avoid and best practices for them to
follow and could include this information in key
guidance documents, such as the LCAP template
and its instructions. According to the administrator
of CDE’s Local Agency Systems Support Office,
CDE has provided information regarding principally
directed from relevant complaints in recent
presentations. Nevertheless, of the descriptions
of the districtwide services we reviewed from our
selected districts’ fiscal year– LCAPs were
not in accordance with the guidance in CDE’s
complaintreports.
In addition, districts sometimes did not clearly
demonstrate how districtwide expenditures of
supplemental and concentration funds principally
benefited intended student groups because they used these funds for
base services that they provide to all students. Specifically, all three
districts and all threecounty offices we reviewed indicated that LCFF
base funding amounts do not cover all necessary base costs, which can
Key Information Regarding Complaints About
Districtwide Spending That the LCAP Template
Instructions Do Not Include
• “To provide the required justification for services
provided on a ‘wide’ basis, a district must distinguish
between services directed toward [intended student
groups] based on that status, and services available
to all students without regard to their status [in an
intended student group].”
• “A district should explain in its LCAP how it
considered factors such as the needs, conditions,
or circumstances of its [intended student groups],
and how the service takes these factors into
consideration (such as, by the service’s design,
content, methods, or location).”
• “A district must explain how the service will be
effective in meeting the LCAP goals for its [intended
student groups] by explaining how it believes
the service will help achieve one or more of the
expected outcomes for thegoal.”
• “Conclusory statements that a service will help
achieve an expected outcome for the goal, without
an explicit connection or further explanation as to
how, are notsufficient.”
• “Simply stating that a district has a high enrollment
percentage of [intended student groups] does not
meet this standard [increase or improve services]
because serving students is not the same as
enrolling students.”
Source: Analysis of a selection of CDE’s reports under
its complaint process, including appeals, and the LCAP
templateinstructions.
California State Auditor Report 2019-101
November 2019
24
put pressure on districts to use supplemental and concentration funds
to provide such services. Consequently, we observed that districts used
supplemental and concentration funds to pay for what appear to be
base services. For instance, San Diego Unified budgeted . million in
supplemental and concentration funds for library services at all schools
within the district. It justified the expenditure by mentioning that such
services create equitable access to learning tools, resources, materials,
and technology. According to the district’s LCAP, providing library
services on campus allows intended student groups an equitable
opportunity to succeed educationally through access to computers,
laptops, books, reference materials, and educational software.
Although we recognize the benefits of base services and the dilemma
districts face when they lack the funding necessary to pay for them,
this description fails to sufficiently explain how San Diego Unified
principally directed these services toward intended student groups.
LCAPs Have Not Consistently Provided Transparency or Facilitated
Accountability
e information districts include in their LCAPs is often overly
complex and unclear, resulting in LCAPs that are not consistently
transparent and that do not facilitate accountability. For example,
the LCAP template and instructions prompt districts to connect
their identified needs with goals based on those needs and then to
identify services to meet those goals. However, we rarely found this
logical connection in the LCAPs we reviewed. Likewise, districts
often did not effectively analyze in their LCAPs whether services
that they had already implemented had been successful. e lack of
clear information within the LCAPs raises concerns about the ability
of stakeholders to hold the districts accountable for the services
they provide, even though enabling such accountability is one of the
fundamental purposes that the LCAPs should serve. Weaknesses in
the template and limited reviews requiredof the county offices have
also contributed to the LCAPs’ lack oftransparency.
The LCAPs We Reviewed Did Not Clearly Communicate Whether the
Districts Had Effectively Met Students’ Needs
Guidance for developing quality LCAPs states that an LCAP should
establish a clear understanding of the services that each district will
provide to its students and should offer a simple and complete story
of that district’s needs, goals, services, and investments in positive
outcomes for its students. We believe that to be clear and effective,
an LCAP should logically connect a district’s needs and goals,
include sufficiently detailed descriptions of the related services, and
present understandable content. However, the LCAPs we reviewed
were unclear in a number of ways.
To be clear and effective, an
LCAP should logically connect a
district’s needs and goals, include
sufficiently detailed descriptions
of the related services, and present
understandable content.
25California State Auditor Report 2019-101
November 2019
First, the three districts did not always base the goals and services
in their LCAPs on clearly articulated needs. is approach
limits transparency because stakeholders cannot decipher
which problems the districts intend the goals to address or how
planned services will help the districts achieve those goals. e
primary causes of this misalignment are broad goals and a lack of
articulation about how certain services connect to the overarching
need and goal. In particular, each of the goals we reviewed from
the three districts’ – LCAPs was broad. For example, Clovis
Unified’s first goal is “Maximize achievement for ALL students,”
which does not convey any information about which types of
services would lead to achieving that goal. Clovis Unified based this
goal on a specific need—its students do not currently all perform
at or above grade level in mathematics and English language arts,
and achievement gaps exist for intended student groups. However,
it is not clear how certain services Clovis Unified includes under
this need, such as reducing the charges for students to attend
performing arts and athletic events, would directly contribute to
achievement in mathematics and English language arts. Although
Clovis Unified writes in its LCAP that reducing these attendance
charges will encourage greater student participation, we believe a
more specific need and goal would better align with services like
this—for instance, a need to improve students’ participation and a
goal to achieve a certain increase in participation.
e two other districts we reviewed also included generally
broad goals, although Oakland Unified created more specific
“subgoals” underlying its main goals. Additionally, only Oakland
Unified had a goal that was specific to an intended student group:
English learners. We believe that districts should articulate a clear
connection between needs, goals, and underlying services, and that
county offices’ reviews should ensure that such connections are
inplace.
Furthermore, the districts often did not effectively analyze in their
LCAPs whether the services they provided had been successful,
which makes it difficult for stakeholders to hold them accountable
for continuing to fund effective services and eliminating ineffective
services. State law requires the LCAP template to include an
assessment of the effectiveness of the specific services described
in the LCAP toward achieving the goals. Although the Analysis
subsection of the LCAP template requires districts to explain
the overall effectiveness of the services in achieving the related
goal, thetemplate does not require districts to provide analysis
specific to each service but rather to each goal. Because a single
goal can include more than services, determining which
particular services were effective in improving overall outcomes
canbedifficult.
The districts often did not effectively
analyze in their LCAPs whether the
services they provided had been
successful.
California State Auditor Report 2019-101
November 2019
26
In fact, the amount of detail in the Analysis subsections we reviewed
varied widely and did not always provide information about any
specific services, further limiting the usefulness of the information that
stakeholders can obtain from the LCAP. In some instances, the districts
addressed specific services. For example, in the Analysis subsection
for one of its goals, Oakland Unified explained that students who
participated in its Pathways Program, which included opportunities
such as a skilled trades service, had graduation rates more than
percentage points higher than those who did not participate. In
contrast, Clovis Unified’s Analysis subsection for its first goal lacks
specific details about the results of its services; it includes only a brief
summary statement regarding the overall results of the implementation
of all its services. Similarly, Clovis Unified described the overall
effectiveness of its first goal’s services by reporting four metrics
from the dashboard and simply stating that those results are “due to
the effective implementation of Goal actions and services.” Perhaps
of even greater concern, percent of the goal-level outcomes we
reviewed in districts’ LCAPs either were pending or presented outdated
data; two of the districts stated that this is because they must formulate
their LCAPs in the spring, before end-of-year and statewide data
areavailable.
In addition, the reviews that county offices are required to perform
of the LCAPs are insufficient to ensure that districts include the
information necessary to ensure their accountability to stakeholders.
State law requires that county offices consider only three criteria
when approving LCAPs: whether a district’s LCAP adheres to the
LCAP template and its instructions, whether that district’s budgeted
expenditures in its LCAP are feasible given the funds available in its
budget, and whether the LCAP adheres to expenditure regulations
related to supplemental and concentration funds. Each of the
county offices we visited met the legal requirements for approving
LCAPs. However, state law does not require county offices to ensure
that districts write LCAPs that articulate a logical connection
between the districts’ needs and goals, provide sufficiently detailed
descriptions of services within the LCAP’s Analysis subsection, and are
easilyunderstandable.
e Alameda County Office of Education took steps beyond those
required by state law. According to an executive director at the Alameda
county office, it includes an exemplary category in its review to
encourage its districts to prepare higher-quality LCAPs. is exemplary
category includes checks for readability and understandability; a review
of whether a district has thoughtfully described how its services address
the needs of its students, student subgroups, and specific school sites;
and an expectation that the district will provide insightful and easily
understood descriptions of how its services address the needs of its
intended student groups. We consider a county office’s including such
steps in its review of an LCAP to be a best practice.
The reviews that county offices are
required to perform of the LCAPs are
insufficient to ensure that districts
include the information necessary
to ensure their accountability
tostakeholders.
27California State Auditor Report 2019-101
November 2019
The Lengthy and Complex LCAPs We Reviewed Reduced Transparency
We believe that, to be effective at providing transparency, an
LCAP needs to—among other things—provide a simple, brief,
and coherent story of the district’s goals and be understandable
to an audience of parents and community members. However,
all three districts we reviewed produced – LCAPs that are
hundreds of pages long: Clovis Unified’s LCAP is nearly pages,
San Diego Unified’s is pages, and Oakland Unified’s is nearly
pages. LCAPs of these lengths cannot tell a simple, brief,
and coherent story of each district’s goals; rather, their length
and complexity reduces readability and transparency. In fact,
without any requirement to do so, Clovis Unified and San Diego
Unified have both created shortened versions of their LCAPs—
such as infographics—that should be easier for their stakeholders
tounderstand.
Because the LCAP template requires districts to present similar
information in multiple places, it contributes to LCAPs’ excessive
lengths. As Figure illustrates, several subsections within the LCAP
template appear multiple times. We determined that the LCAPs we
reviewed could have been as much as percent shorter had they
not contained duplicative information. For example, the Annual
Update section and the Goals, Actions, and Services section contain
similar information and together accounted for of the pages
in Oakland Unified’s LCAP. Combining those sections in the LCAP
template could have reduced Oakland Unified’s total page count by
around percent. We believe that a revision to the LCAP template
that the State Board and CDE are considering to merge the Annual
Update section with the Goals, Actions, and Services section
could resolve some of the duplication we noted, if the State Board
adoptsit.
As we previously discuss, districts have also added complexity
to their LCAPs by including numerous services for each of their
identified goals. Having numerous services related to a single goal
obscures whether any particular service was effective in helping
the district meet that goal. Each of the three districts we reviewed
had at least one goal for which it identified or more services.
For example, in its fiscal year – LCAP, Clovis Unified
included specific services for its goal of maximizing achievement
for all students. ese services include providing intervention
summer school and reducing the charges for students to attend
some performing arts and athletic events. Its description of these
services is pages long, or about percent of the length of
its entire LCAP. With so many services for just one broad goal,
determining which ones are the most critical to achieving the goal
or even how some relate to the goal is difficult.
The LCAPs we reviewed could
have been as much as percent
shorter had they not contained
duplicativeinformation.
28 California State Auditor Report 2019-101
November 2019
Figure 8
LCAPs Consist of Five Main Sections, Two of Which Contain Duplicative Information
Summary
SECTIONS SUBSECTIONS
Annual
Update
Stakeholder
Engagement
Goals, Actions,
and Services
Demonstration of Improved
or Increased Services for
Intended Student Groups
The Story
Highlights
Review of Performance Greatest Needs
Goals State and/or Local Priorities
Expected Annual
Measurable Outcomes
Actual Annual
Measurable Outcomes
Planned Actions/Services Actual Actions/Services
Budgeted Expenditures
Estimated Actual
Expenditures
Analysis: overall implementation, overall effectiveness, material differences,
changes made to the LCAP as a result of this analysis
Involvement Process (How, when, and with whom did the district consult as a part of the planning process for this LCAP?)
Affect on LCAP (How did these consultations affect the LCAP for the upcoming year?)
Goals State and/or Local Priorities
Expected Annual
Measurable Outcomes
Identified Needs
Planned Actions/Services Budgeted Expenditures
Estimated Supplemental and Concentration Grant Funds Percentage by Which to Improve or Increase Services
Describe how services provided for intended student groups are increased or improved by at least the percentage
identified above, either quantitatively or qualitatively, as compared to services provided for all students in the LCAP year,
and identify each service being funded and provided on a schoolwide or districtwide basis
Greatest Progress Performance Gaps
Budget Summary*
Subsections that appear once
Identify LCAP components that are
duplicated in another section
GRAY
COLORS
Source: Analysis of the LCAP template that CDE prepared in October 2016.
* The budget summary no longer exists in the version of the LCAP template that CDE prepared in January 2019.
29California State Auditor Report 2019-101
November 2019
We also found that the three districts sometimes included mistakes
and discrepancies in their LCAPs that made the documents less
transparent and useful. For instance, Oakland Unified indicated in
its fiscal year – LCAP that it would implement some services
districtwide but at the same time stated it would provide those
services at only certain school sites, making it unclear which was
correct. Similarly, for certain expenditures in its fiscal year –
LCAP, Clovis Unified included line items for services that, when
totaled, did not match the sum it reported; thus, we were unclear
about which amounts were correct. According to an assistant
superintendent at Clovis Unified, these discrepancies occurred
because the electronic tool the State provided to assist districts in
filling out the LCAP did not automatically sum the expenditures
that Clovis Unified entered. She stated that often data previously
saved in the e-template would disappear upon reopening the file
and that inefficiencies of the e-template made it difficult to validate
the data.
Additionally, the districts sometimes used jargon that made it difficult
to understand how they planned to spend their supplemental and
concentration funds. San Diego Unified provided one particularly
difficult description: “Integrated Multi-Tiered Systems of Support
(I-MTSS) will be implemented in Grades TK– through the
Academics and Agency (A²) model by ensuring the essential elements
and solution seeking processes are in place at all schools.” We could
not determine from that description whether and to what extent
SanDiego’s expenditure of supplemental and concentration funds
would affect the intended student groups.
The State Currently Lacks Information That Would Better Enable It to
Measure the Effectiveness of LCFF
e State has recently made a number of significant changes
to its statewide assessment system and accountability system,
including the implementation of the dashboard and new academic
assessments. As a result of these changes, identifying clear trends in
achievement gaps statewide will require additional time and data.
Further, policymakers and other stakeholders still lack adequate
information to assess the impact of supplemental and concentration
funds on the educational outcomes of the intended student groups.
However, by collecting and reporting additional information about
districts’ uses of supplemental and concentration funds, the State
could begin to determine how districts’ spending of those funds
affects students and whether it should take further action to close
persistent achievement gaps.
The three districts sometimes
included mistakes, discrepancies,
or jargon in their LCAPs that made
the documents less transparent
anduseful.
California State Auditor Report 2019-101
November 2019
30
Because the Dashboard Data Are New and Not Tied to Local Spending,
the State Has Limited Ability to Measure LCFF’s Effectiveness in Closing
Achievement Gaps
e State’s current accountability system does not yet allow
stakeholders to adequately assess LCFF’s effectiveness in improving
student educational outcomes and closing achievement gaps for
intended student groups. e State implemented LCFF in part to
improve the outcomes of the intended student groups and to close
the achievement gaps that exist between certain student groups
and students overall. As we discuss in the Introduction, the State
measures student outcomes—including those of intended student
groups—through the dashboard, which is a key accountability
tool for LCFF. However, the State did not release the dashboard
until , four years after it implemented LCFF. e State
also transitioned to new academic assessments, reported new
dashboard indicators, and changed methodologies for calculating
certain existing indicators, making identifying and assessing trends
related to student outcomes even more difficult. In addition, CDE
does not incorporate year-to-year growth for individual students
into its calculations for certain dashboard indicators, and therefore
may obscure LCFF’s impact on students over time. However, CDE
has been exploring a student growth model for the dashboard.
Given these developments, we believe additional time and more
dashboard data are necessary to identify clear trends in closing
achievement gaps statewide.
Further, the State is in the early stages of planning and developing
a data system that could provide additional information regarding
LCFF’s effectiveness. Unlike some other states, California does
not yet have a statewide system that connects K– data—such as
the data that contribute to the dashboard—to postsecondary and
workforce data. However, in the State authorized funding to
plan for such a statewide data system, which could allow it to report
additional outcomes related to students’ participation in college
and the workforce after leaving the K– system. For instance, such
data could build upon the dashboard indicator for college/career
preparedness, which reports the percentage of students who are
prepared for college or the workforce but does not report whether
students have actually participated or succeeded in those domains.
e State’s current data make clear, however, that achievement gaps
still persist under LCFF. e available data show improvements in
some student outcome measures since the State implemented LCFF,
including modest reductions in certain statewide achievement gaps.
Additionally, two recent case studies report that San Diego Unified
has improved its outcomes; one report cited increases in graduation
rates between and while the other cited greater rates of
college and career readiness over the last six years. However, the
The State is in the early stages
of planning and developing a
data system that could provide
additional information regarding
LCFF’s effectiveness.
31California State Auditor Report 2019-101
November 2019
dashboard indicates that significant achievement gaps still exist
statewide for the intended student groups. For example, the
dashboard shows that the statewide graduation rate for all students
was nearly percent but that the statewide graduation rate for
youth in foster care was only percent. Similarly, according to the
dashboard’s college/career indicator, less than percent of English
learners in the graduating class of were prepared for college or
the workforce, versus about percent of all high school students
inthe class of .
Given that the data show these persistent achievement gaps, we
would expect the State to have a method to determine whether
supplemental and concentration funds, and possibly other funding,
is helping to improve the performance of the intended student
groups. However, the State has not required districts to track and
report their expenditures of supplemental and concentration funds
in a way that aligns with dashboard indicators. It therefore lacks
a means of determining directly whether or how well districts are
spending those funds to reduce achievement gaps. For instance,
the dashboard does not indicate whether the percentage point
increase from to in the graduation rate for students from
households with low incomes at OaklandUnified was associated
with any specific district effort, nor does it reveal whether declines
in English and math assessment scores for English learners at
Oakland Unified were the result of the amounts of supplemental
and concentration funds the district directed toward those students.
When we asked CDE for its perspective, the director of its Analysis,
Measurement, and Accountability Reporting Division indicated that
state law provided for the establishment of the dashboard to allow
county offices and districts to evaluate strengths and weaknesses
and identify areas that require improvement; it does not require
CDE to determine whether LCFF is working. Nonetheless, we
believe that as part of its responsibility to improve public education
programs, it would be reasonable for CDE to have a method for
doing so.
For each goal in their LCAPs, districts are to report both estimated
actual expenditures and actual outcomes. However, districts often
do not effectively analyze in their LCAPs whether specific services
have been successful—as we previously discussed. At times,
districts articulated in their LCAPs how their expenditures of
supplemental and concentration funds affected student outcomes.
For example, according to its – LCAP, Oakland Unified
reported that it spent an estimated , in supplemental
and concentration funds to provide a five-week summer literacy
program and that participating students averaged threemonths
of reading growth. However, districts do not consistently provide
this type of information. Moreover, even if they and other local
educational agencies consistently measured the effectiveness
The State lacks a means of
determining directly whether or
how well districts are spending
supplemental and concentration
funds to reduce achievement gaps.
California State Auditor Report 2019-101
November 2019
32
of their spending of supplemental and concentration funds and
reported those results in their LCAPs, it would be onerous for
CDE to aggregate, summarize, and report that information on a
statewide basis; the source information would exist in the more
than two thousand LCAPs local educational agencies prepare each
year, each of which could contain dozens of individual expenditures.
As we describe in the next section, collecting and aggregating these
data is critical for understanding how funding affects students and
for determining whether the State should take additional actions to
close achievement gaps
By Implementing Certain Tracking Mechanisms, the State Could Better
Understand How LCFF Funding Affect Student Outcomes
Since implementing LCFF in fiscal year –, the State has
allocated billions of dollars in supplemental and concentration
funds each year, yet policymakers still lack adequate information
to assess the impact of those funds on the educational outcomes of
the intended student groups. We acknowledge that a key principle
of LCFF is local control, and we do not advocate undermining
that principle. However, because districts do not always clearly
describe how the supplemental and concentration funds they
spend principally benefit intended student groups and because
achievement gaps still exist for those student groups, we believe the
State should do more to obtain data that would help policymakers
and other stakeholders better assess the impact of the funds the
State distributes. By collecting and reporting additional information
about districts’ uses of supplemental and concentration funds, the
State could ensure that it and other stakeholders better understand
how the districts’ spending of these funds affects intended student
groups and whether further action is necessary to close persistent
achievement gaps.
As an initial step, the State could collect and report data on the
total amount of supplemental and concentration funds each district
spends to assess whether they spend all of it. As we discuss in the
first section of this report, because regulations directed them to
use prior-year spending amounts, the districts we visited did not
include in their LCAPs all of the supplemental and concentration
funds that they would have if they had based their estimations
on the percentages in state law, nor did they spend all of the
supplemental and concentration funds they did include in their
LCAPs. As a result, it is unclear the extent to which hundreds
of millions of dollars benefited those student groups. To provide
assurance that districts spend all of their supplemental and
concentration funds, the Legislature could require CDE to identify
a common methodology—for instance, using resource codes in
The State could collect and report
data on the total amount of
supplemental and concentration
funds each district spends to assess
whether they spend all of it.
33California State Auditor Report 2019-101
November 2019
CDE’s already existing account code structure—for districts to track
and report the total amount of supplemental and concentration
funds that they receive and spend each year.
A standardized methodology for tracking supplemental and
concentration funds could also help districts more easily compile
the information that they report in their LCAPs. Because the
districts we reviewed did not consistently track all of their
supplemental and concentration funds in their accounting systems,
they sometimes had to use time-consuming processes to calculate
the amounts of these funds they reported in their LCAPs. For
example, Oakland Unified’s former LCAP coordinator stated that
she developed a process—which she said took about threemonths
to complete—that involved using a spreadsheet to manually
compile LCAP expenditure information. She said that when the
State first transitioned to LCFF, it provided limited information
about how districts should generate expenditure information for
their LCAPs and that such guidance would have been helpful.
According to Oakland Unified’s chief academic officer, the district
has a new accounting system that now tracks supplemental and
concentration funds more accurately and can provide useful
information for the district.
Beyond simply accounting for the total amount of districts’
budgeted and spent supplemental and concentration funds, the
State could begin to determine the impact of those funds by
gathering information about the types of services the districts
provided with the funds and then comparing that information
to student outcomes. To know where to expect supplemental
and concentration funds to contribute to improvements in the
dashboard’s indicators, the State and other stakeholders need to
know the types of services districts have provided—such as math
support or English learner tutors—using those funds. However,
as we note previously, the State has not required districts to track
and report their expenditures of supplemental and concentration
funds in ways that correspond with dashboard indicators. To
address this gap between funding and outcomes, the State needs
to collect additional spending information from districts, as
Figure indicates. For example, if a district provided English
learner tutors for its intended student groups, it could report
expenditures for these tutors as supplemental and concentration
funds and as targeted toward English learners. e State and other
stakeholders could then compare this spending information with
the appropriate dashboard indicators—in this case, the English
Learner Progressindicator.
A standardized methodology
for tracking supplemental and
concentration funds could help
districts more easily compile the
information that they report in
theirLCAPs.
34 California State Auditor Report 2019-101
November 2019
Figure 9
By Collecting and Reporting Districts’ Spending Information, the State Could Strengthen the Links Between Spending and Outcomes
The State needs to develop a method for collecting spending information
that would allow it to link spending and outcomes.
LCAPs
SPENDING OUTCOMES
GRADUATION RATE
COLLEGE/CAREER
ENGLISH LEARNER PROGRESS
SUSPENSION RATE
CHRONIC ABSENTEEISM
ENGLISH LANGUAGE ARTS
MATHEMATICS
DASHBOARD
Districts currently present certain
supplemental and concentration
spending information in the LCAP;
for example:
Currently districts do not consistently track all their
supplemental and concentration funds in their accounting
systems, and the State does not require districts to report those
expenditures in a way that aligns with dashboard indicators.
Because spending is not aligned with outcomes,
there is no meaningful link between spending
and outcomes.
DISTRICTS’
ACCOUNTING
SYSTEMS
SERVICE 1: Provide teacher collaboration
time to help inform instruction.
Amount: $4 million
SERVICE 2: Provide an intervention and credit
recovery program to improve graduation rates.
Amount: $225,000
SERVICE 1
Budget Reference: Certificated
personnel salaries and benefits
SERVICE 2
Budget Reference: Services and
other operating expenses
Source: Analysis of the 2018 California School Dashboard Technical Guide, the 2019 California School Accounting Manual, and LCAPs and financial information from the selected districts.
35California State Auditor Report 2019-101
November 2019
To standardize these tracking procedures, the Legislature could
require CDE to identify categories for the types of services that
districts provide with their supplemental and concentration funds.
CDE could align certain categories with dashboard indicators
and provide guidance to districts to ensure that they categorize
expenditures consistently. When we asked about the best way to
collect this spending information, the State Board’s deputy policy
director and assistant counsel and the administrator of CDE’s
Financial Accountability and Information Services Office stated that
it may be more feasible to create a new computer-based reporting
tool through which districts and other local educational agencies
could enter information about expenditures that they may already
report on paper in their LCAPs.
County offices and districts could also use the categorized spending
information when they participate in the differentiated assistance
process. As we indicate in the Introduction, a district is eligible for
differentiated assistance—the State’s primary process for ensuring
that districts receive individualized support—if the dashboard
shows that the district has any student groups that do not meet
performance standards for two or more dashboard performance
indicators. During the differentiated assistance process, the county
office works with the district to identify possible causes of these
achievement gaps. If a district tracked and reported its expenditures
of supplemental and concentration funds as we have proposed,
the district and county office could use those data to inform their
analyses of achievement gaps. For instance, the data might suggest
that a district’s lack of spending for services to meet certain goals
has contributed to poor outcomes or that the services on which the
district has spent funds are ineffective.
Categorized spending data could also be useful for broader policy
discussions about LCFF. In the course of our review, we observed
that districts reported expenditures related to academic needs, as
well as to other, more fundamental needs—such as physical safety
and mental well-being. For example, according to their LCAPs, the
three districts we visited used millions of dollars of supplemental
and concentration funds to address students’ basic needs such
as food, health, and safety; the districts’ LCAPs associated these
funds with services such as a child nutrition program, nurses,
mental health staff, and school security officers. e State could
measure the amount of supplemental and concentration funds that
districts direct toward these basic needs by including in its tracking
mechanism appropriate categories that focus on issues like health
and wellness. ese data could be useful for policymakers if they
wanted to consider increasing LCFF base funding or redirecting
other funding sources to address these fundamental needs.
To standardize these tracking
procedures, the Legislature
could require CDE to identify
categories for the types of
services that districts provide
with their supplemental and
concentrationfunds.
California State Auditor Report 2019-101
November 2019
36
e State and local entities would not sacrifice local control by
collecting and reporting spending data related to districts’ uses
of supplemental and concentration funds. Districts would report
spending information after they have decided how to spend their
funds; because the tracking mechanism would be informational,
not prescriptive, it would not represent a return to categorical
funding. Moreover, a precedent exists for tracking funds that
are generally free of state control: education funding provided
under the California State Lottery Act of is not subject to
state control, yet state law still requires each district to track the
lottery funds it receives and spends. In fact, CDE has created a
standardized accounting code for districts’ unrestricted lottery
funds. ese requirements exist even though lottery funds are
similar to supplemental and concentration funds in that both
are unrestricted and have few spending requirements. Further,
CDE’s LCAP template already contains sections for districts to
record the intended student groups and the state or local priorities
that the districts intend to address through their expenditures of
supplemental and concentration funds. A standardized tracking
mechanism would merely be a way for the State to collect similar
information electronically, thus allowing it to aggregate those data
on a broader scale and then align them with dashboard outcomes at
the school, district, and statewide level.
We recognize that drawing links between certain types of
expenditures of supplemental and concentration funds and districts’
dashboard outcomes may be challenging. For example, a single
expenditure may support services related to social-emotional
learning as well as to academic and career mentorship. Further, that
same expenditure may affect more than one dashboard indicator.
However, the complexities of education funding and of local control
should not prevent the State from gathering, summarizing, and
sharing information about how districts actually use supplemental
and concentration funds meant to benefit intended student groups.
e State has an opportunity to take an important step toward
learning more about the effectiveness of billions of dollars that
it allocates for K– education. Tracking and summarizing the
districts’ use of supplemental and concentration funds would
provide useful data that would be a critical step toward establishing
direct connections between the State’s appropriations of these funds
and LCFF’s effectiveness in closing persistent achievement gaps
related to the intended student groups. Without this information,
we believe that the State will continue to struggle to determine
whether it needs to do more to close those gaps. We provide several
recommendations to help the State better ensure that intended
student groups receive maximum benefit from the supplemental
and concentration funds it allocates, which we summarize in
Figure.
The State has an opportunity
to take an important step
toward learning more about the
effectiveness of billions of dollars
that it allocates for K– education.
37California State Auditor Report 2019-101
November 2019
Figure 10
By Implementing Our Key Legislative Recommendations, the State Could Better Ensure That Supplemental and Concentration Funds Benefit Intended Student Groups
State law does not require districts to spend
their supplemental and concentration funds
to benefit intended student groups, nor
does it require that they track their
spending of these funds.
SUPPLEMENTAL AND
CONCENTRATION FUNDS
LCAPs do not consistently provide
transparency for stakeholders or clearly
communicate how effectively districts meet
their students’ needs.
LCAPs
Policymakers and other stakeholders lack adequate
information to assess the impact of supplemental and
concentration funds on the educational outcomes of
intended student groups and closing achievement gaps.
Amend state law to require that districts annually
reconcile the amounts of supplemental and
concentration funds in their LCAPs with the actual
amounts CDE reports having apportioned to them,
and specify that unspent supplemental and
concentration funds at year-end maintain their
designations and carryover to a following year.
Amend state law to require that districts
specify in their LCAPs the specific amounts of
supplemental and concentration funds they
plan to spend for each service that involves
those funds. The State Board should require
districts to include in their LCAPs analyses of
the effectiveness of individual services.
Require CDE to develop and implement a tracking
mechanism that districts and other local educational
agencies must use to report to it the types of services
on which they spend their supplemental and
concentration funds.
INTENDED
STUDENT GROUPS
Better controls to ensure that districts actually spend
the supplemental and concentration funds they receive
to benefit intended student groups.
Better transparency through LCAPs' inclusion of
specific amounts and analyses of supplemental
and concentration funds that districts plan to
use to provide services for students.
Better stakeholder access to uniform data statewide
about the services supplemental and concentration
funds support, and data that could enable stakeholders
to begin determining the effectiveness of those funds in
closing achievement gaps.
OUTCOMES
CURRENT CONCERNS
OUR RECOMMENDATIONS
INTENDED RESULTS
California State Auditor Report 2019-101
November 2019
38
Recommendations
Legislature
To increase the transparency of LCAPs and ensure that stakeholders
can provide an adequate level of oversight, the Legislature should
amend state law to require districts and other local educational
agencies to specify in their LCAPs the specific amounts of budgeted
and estimated actual supplemental and concentration expenditures
for each service that involves thosefunds.
To ensure that intended student groups receive the maximum
benefit from supplemental and concentration funds, the Legislature
should take the following actions:
• Amend state law to require districts and other local educational
agencies to identify any unspent supplemental and concentration
funds by annually reconciling the estimated amounts of these
funds included in their LCAPs with the actual amounts of
thesefunds CDE reports having apportioned to them.
• Amend state law to specify that unspent supplemental and
concentration funds at year-end must retain its designation
to increase and improve services for intended student groups
and be spent in a following year. e Legislature should also
require districts and other local educational agencies to identify
in their LCAPs for the following year the total amounts of any
unspent supplemental and concentration funds. In addition, it
should direct the State Board to update the LCAP template to
require districts and other local educational agencies to report
in their LCAPs how they intend to use any previously unspent
supplemental and concentration funds to provide services that
benefit intended student groups.
To provide additional data for the State and other stakeholders
and to align spending information with the dashboard indicators
or other student outcomes, the Legislature should take the
followingactions:
• Require CDE to update its accounting manual to direct districts
and other local educational agencies to track and report to it
the total amount of supplemental and concentration funds they
receive and spend each year.
• Require CDE to develop and implement a tracking mechanism
that districts and other local educational agencies must use
to report to it the types of services on which they spend their
supplemental and concentration funds.
39California State Auditor Report 2019-101
November 2019
State Board
To increase the transparency of LCAPs, by February , the State
Board should make the following changes to the LCAP template:
• Merge the Annual Update section with the Goals, Actions, and
Services section.
• Require districts and other local educational agencies to include
analyses of the effectiveness of individual services, in addition to
analyses for overarching goals.
To ensure that districts and other local educational agencies
produce clear and effective LCAPs and to reduce the likelihood of
stakeholder complaints, by April the State Board should revise
the instructions for the LCAP template as follows:
• Include, as best practices, key information from CDE’s
stakeholder complaint decisions about how districts and other
local educational agencies can successfully demonstrate that
they have principally directed districtwide spending for services
toward intended studentgroups.
• Instruct districts to ensure that their LCAPs are sufficiently clear
and effective, including but not necessarily limited to ensuring
that they articulate a logical connection between their needs and
goals, that districts provide sufficiently detailed descriptions of
services within the LCAP’s Analysis subsection, and that LCAPs
are written in a manner that is easily understandable.
We conducted this audit under the authority vested in the California State Auditor by Government
Code etseq. and according to generally accepted government auditing standards. ose
standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our audit objectives specified in
the Scope and Methodology section of the report. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our auditobjectives.
Respectfully submitted,
ELAINE M. HOWLE, CPA
California State Auditor
November ,
40 California State Auditor Report 2019-101
November 2019
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41California State Auditor Report 2019-101
November 2019
Appendix A
Scope and Methodology
e Joint Legislative Audit Committee (Audit Committee) directed
the California State Auditor to select three large school districts
and review information related to these districts’ LCFF funding,
LCAPs, and measurement of educational success. Table A lists the
objectives that the Audit Committee approved and the methods we
used to address them.
Table A
Audit Objectives and the Methods Used to Address Them
AUDIT OBJECTIVE METHOD
1
Review and evaluate the laws, rules, and regulations significant
to the audit objectives.
Reviewed relevant laws, rules, and regulations.
2
Regarding LCFF, perform the following steps to the
extentpossible:
a. Identify and evaluate each school district’s methodology for
distributing and spending LCFF funding on its students or at
its schools.
b. For at least three fiscal years, examine each district’s total
LCFF funding and expenditures and assess how they have
changed over time under LCFF.
c. Determine for each school district and a selection of schools
within each district the LCFF funding and expenditures
by LCFF category and for English learners, youth in foster
care, and those from households with low incomes, and
determine whether the expenditures are appropriate.
• Interviewed key staff and reviewed relevant documents—such as district
budget handbooks and school board policies—to evaluate each of the
three selected district’s (Clovis Unified, Oakland Unified, San Diego Unified)
methodology for distributing and spending LCFF funding, including how it
directs LCFF funding to specific school sites.
• Obtained and analyzed the districts’ financial data from fiscal years2015–16
through 2017–18 and other related documents to determine the extentto
which each district tracked its supplemental and concentration funds.
• Identified trends in each district’s total LCFF revenues since fiscal
year2013–14 using CDE’s funding data referred to as Funding Snapshots.
• Analyzed expenditure information that the districts reported in their
LCAPs from fiscal years 2014–15 through 2018–19—and compared that
information to CDE’s Funding Snapshots—to determine whether districts
included all of their supplemental and concentration funds in their LCAPs
and whether they spent all of these funds they did include.
• Selected and reviewed expenditures of supplemental and concentration
funds that the districts reported in their LCAPs, including expenditures that
applied to two specific school sites within each district, and assessed the
reasonableness of the districts’ justifications for these expenditures.
3
Regarding LCAPs, perform the following steps:
a. Identify and assess the goals within each district’s
accountability plan or elsewhere that are aimed at raising
student achievement, especially those goals intended to
benefit English learners, youth in foster care, and those from
households with low incomes.
b. Review and assess whether each district’s most recent LCAP
complies with applicable legal requirements, especially
those requirements associated with measuring achievement
and with helping students who are members of groups
associated with chronically low academic achievement.
c. Make any necessary recommendations for improving
accountability plans and student achievement levels, including,
if warranted, additional goals that would be helpful to ensure
improved achievement levels of these student groups.
• Interviewed key staff at each selected district, at each county office, and at
CDE about the LCAP development process and about CDE’s LCAP template.
• Identified the goals within each selected district’s fiscal year 2018–19 LCAP
and analyzed their alignment with the districts’ identified needs, planned
services, and expectedoutcomes.
• Assessed each district’s fiscal year 2018–19 LCAP to determine whether
it complied with applicable legal requirements, and obtained additional
documents to verify that districts followed key LCAP process requirements,
such as holding public hearings to solicit comments.
• Reviewed CDE’s fiscal years 2018–19 and 2019–20 LCAP templates to ensure
that they met substantive legal requirements.
• Reviewed documentation related to LCAP-related complaints and
settlement agreements to identify common concerns of stakeholders with
LCAPs and to understand CDE’s position on these concerns.
continued on next page . . .
42 California State Auditor Report 2019-101
November 2019
AUDIT OBJECTIVE METHOD
4
Regarding the measurement of educational success,
perform the following steps:
a. Identify and evaluate the measurements and
measurement tools that each school district uses to
assess success in educating its students, including
English learners, youth in foster care, and those from
households with low incomes.
b. Determine whether additional measurements would
help the districts better ensure student success.
• Interviewed key staff at each district to identify the district’s tools and practices
for using measurements such as student outcomes, including how they use
thedashboard.
• Reviewed documents such as data guides and information on district webpages
to analyze how each district uses measurements and measurement tools to assess
success in educating its students.
• Reviewed each district’s 2018–19 LCAP to document and assess the measurable
outcomes each district reported.
• Assessed CDE’s data guides, webpages, and other documents associated with the
dashboard; interviewed relevant CDE staff about the process of developing and
updating the dashboard; and documented revisions the State Board is considering
for the 2019 dashboard.
• Reviewed state data available on platforms such as the dashboard to assess how
student outcomes have changed statewide and at our selected districts.
5
Review and assess any other issues that are significant to
the audit.
• Interviewed relevant CDE staff to obtain their perspectives on LCFF, LCAPs, and
reporting outcomes.
• Documented relevant items from the 2019–20 state budget—such as funding to
plan for a longitudinal data system—and asked CDE staff for their perspectives
when appropriate.
Source: Analysis of the Audit Committee’s audit request number 2019-101, as well as information and documentation identified in the table column
titledMethod.
Assessment of Data Reliability
e U.S. Government Accountability Office, whose standards
we are statutorily obligated to follow, requires us to assess the
sufficiency and appropriateness of computer-processed information
we use to support our findings, conclusions, or recommendations.
In performing this audit, we relied on reports we obtained from
CDE’s online LCFF Funding Snapshots, Dashboard, DataQuest,
and California Assessment of Student Performance and Progress
(CAASPP) systems. We used reports from the LCFF Funding
Snapshots to identify the amounts of LCFF funding that districts
received. Because the LCFF amounts in the Funding Snapshots for
fiscal years – through – materially agreed with the
LCFF revenue amounts included in the audited financial statements
for the three districts we visited, we determined that the Funding
Snapshots were sufficiently reliable for the purposes of this audit.
We used the reports from the other three systems—Dashboard,
DataQuest, and CAASPP—to identify educational outcome
information for certain student groups. We concluded that reports
from these systems were of undetermined reliability. We did not
perform an assessment of the reports from the Dashboard and
DataQuest systems because the supporting documentation is
maintained among California’s approximately , school districts,
making accuracy and completeness testing impractical. To gain
43California State Auditor Report 2019-101
November 2019
some assurance for these systems, we reviewed other information
related to the educational outcomes of California’s students and
found that it corroborated CDE’s data. In addition, we did not
perform an assessment of the CAASPP reports because the system
is paperless. We also did not perform a review of the controls over
the system that produced these reports because of the significant
resources required to conduct such an analysis. Although we
recognize that any limitations that we identified in the reports may
affect the precision of the numbers we present, there is sufficient
evidence in total to support our audit findings, conclusions,
andrecommendations.
Finally, we tried to use data from the accounting systems of the
three districts we visited; however, the districts do not consistently
track LCFF funding in their accounting systems, as we explain
in the AuditResults, and thus we could not rely on them for our
audit work. Instead, we relied on each district’s LCAP forthe
expenditure information it reported. is information is of
undeterminedreliability.
44 California State Auditor Report 2019-101
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45California State Auditor Report 2019-101
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Appendix B
Trends of LCFF Funding
As the Introduction indicates, the State phased in full funding
under LCFF over several years, increasing the amount of funds it
apportioned to districts to close the gap between actual funding
and the target funding level that state law establishes. CDE’s data
show that when the State implemented LCFF in fiscal year–,
it allocated local educational agencies about billion, or just
over percent of the total target apportionment. e State
increased funding levels in each year that followed until it fully
funded LCFF for school districts in fiscal year –. In that year,
it allocated a total of more than billion in LCFF funding, of
which districts received nearly billion. Table B presents LCFF
funding information for the three selected districts (Clovis Unified,
OaklandUnified, and San Diego Unified) from fiscal years –
through –.
Table B
Three Districts’ LCFF Funding From Fiscal Years 2013–14 Through 2018–19
Clovis Unified LCFF Funding Over Time
FISCAL YEAR 201314 2014 15 2015 16 2016 17 201718 201819
Total LCFF Funded*
$247,330,886 $275,018,846 $312,784,355 $335,191,456 $346,147,226 $372,565,134
Total Supplemental Budgeted inLCAP
Unknown 8,833,000 17,864,615 23,139,241 25,532,165 29,585,921
Total Supplemental Expenditures
inLCAP
2,700,000 8,252,783 18,118,972 23,267,119 25,713,144 29,272,423
Difference Between Budget and
Expenditures in LCAP
Unknown $(580,217) $254,357 $127,878 $180,979 $(313,498)
Oakland Unified LCFF Funding Over Time
FISCAL YEAR 201314 201415 2015 16 201617 201718 201819
Total LCFF Funded*
$250,522,241 $281,576,262 $320,304,135 $337,219,507 $343,123,790 $359,487,786
Total Supplemental and Concentration
Budgeted in LCAP
10,000,000 17,135,948 52,470,141 67,267,837 69,935,710 77,058,564
Total Supplemental and Concentration
Expenditures in LCAP
Unknown Unknown 60,811,151 66,543,225 65,912,750 75,089,930
Difference Between Budget and
Expenditures in LCAP
Unknown Unknown $8,341,010 $(724,612) $(4,022,960) $(1,968,634)
continued on next page . . .
46 California State Auditor Report 2019-101
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San Diego Unified LCFF Funding Over Time
FISCAL YEAR 201314 201415 201516 201617 201718 201819
Total LCFF Funded*
$698,200,252 $779,743,332 $867,204,734 $893,104,625 $909,605,442 $948,944,564
Total Supplemental and
Concentration Budgeted in LCAP
Unknown 52,000,000 95,300,000 120,879,000 127,030,626 128,089,241
Total Supplemental and
Concentration Expenditures in LCAP
20,400,000 52,000,000 96,986,200 121,173,699 123,521,697 128,089,240
Difference Between Budget and
Expenditures in LCAP
Unknown – $1,686,200 $294,699 $(3,508,929) $(1)
Source: Analysis of CDE’s LCFF principal apportionment data and districts’ LCAPs for fiscal years 2014–15 through 2018–19.
* Total LCFF does not include add-on funding that districts received through the Targeted Instructional Improvement Block Grant program, the
Home-to-School Transportation program, and the Small School District Transportation program.
47California State Auditor Report 2019-101
November 2019
* California State Auditor’s comments begin on page 57.
STATE OF CALIFORNIA GAVIN NEWSOM, Governor
CALIFORNIA STATE BOARD OF EDUCATION
1430 N Street, Suite 5111
Sacramento, CA 95814
Phone: (916) 319-0827
Fax: (916) 319-0175
October 17, 2019
Elaine M. Howle
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
Re: California State Board of Education Response to Audit Report 2019—101, “K-12
Local Control Funding”
Dear Ms. Howle,
On behalf of the State Board of Education, I appreciate the opportunity to respond
to the California State Auditor’s report, entitled “K-12 Local Control Funding.”
Before addressing the substance of the report, I would first like to express
appreciation for the professionalism and diligence of the audit team assigned to this
audit. Implementation of the Local Control Funding Formula (LCFF) has been a
complex undertaking that the State Board of Education (Board) takes very seriously.
LCFF implementation involves practices that are complex in their own right, including
local budget decisions and implementation of instructional programming. Moreover,
throughout the implementation process, the Board has proactively solicited and
balanced perspectives of the diverse education stakeholders across the state. That
background and context is important to understanding the present policy
circumstances, and we appreciate the audit team’s effort to situate their work within
that background and context as well as their openness to considering issues that our
team raised.
I also appreciate that the audit report acknowledges that Board staff and staff from
the California Department of Education (CDE) are working on a revised template for
the Local Control and Accountability Plan (LCAP) to implement changes to the
statutes governing the LCAP template made by AB 1840, Chapter 426, Statutes of
2018. That legislation was enacted to improve the LCAP template based on lessons
learned over the first few years of LCAP implementation.
We expect that the Board will adopt a new LCAP template at its January 2020
meeting. It is our hope that the revised template will enhance transparency around
how funds are used within the LCAP. The anticipated template revisions will ensure
the LCAP development process supports more meaningful evaluation of underlying
performance in consultation with local stakeholders, prioritization of actions and
*
48 California State Auditor Report 2019-101
November 2019
budgetary resources in response to needs identified, and ongoing monitoring of
effectiveness of those actions in improving opportunities and outcomes for students.
The enclosed attachment includes detailed responses to the audit report
recommendations.
Sincerely,
Karen Stapf Walters
Executive Director
California State Board of Education
49California State Auditor Report 2019-101
November 2019
1
RESPONSE BY THE STATE BOARD OF EDUCATION
The Legislature delegated to the State Board of Education (Board) key policymaking
decisions related to Local Control Funding Formula (LCFF) implementation, and the
Board has dedicated substantial time and attention to that important work. The
perspective gained from that work over the last six years provides important context
and insight as the Legislature and the public evaluate the findings from the audit and
recommendations contained in the audit report.
Additionally, AB 1840, Chapter 426, Statutes of 2018, requires the Board to make
significant changes to the Local Control and Accountability Plan (LCAP) template by
January 2020. Local educational agencies (LEAs) (school districts, county offices of
education, and charter schools) have not developed LCAPs using the new template
that reflect the statutory changes enacted last year, and the audit therefore could
not include review of LCAPs adopted under the new LCAP template. As a result,
details on the work to update the LCAP template provide further context for the
findings and recommendations included in the audit report.
Background
One of LCFF’s key innovations was to shift the focus of state accountability from
“inputs” to “output.” Instead of focusing on whether districts are simply spending
money within a categorical program, LCFF holds districts accountable for improving
opportunities and outcomes for students. This innovation has also led to significant
changes in local planning and budgeting practices by bringing a more explicit focus
through the LCAP on whether the decisions LEAs make about how to use their limited
resources are improving student outcomes.
This shift in state policy responded to decades of experience with the former
categorical approach, under which local accountability was driven by year-to-year
accounting procedures and compliance monitoring rather than a focus on whether
spending decisions lead to improved outcomes. A few concrete examples illustrate
some of the limitations of the former categorical approach and the potential
challenges of using such an approach within the context of the LCAP.
• An LEA’s LCAP sets a goal of improving student attendance and proposes an
action to hire a new counselor. Because the identity of that person is unknown,
the LCAP lists a planned expenditure of $100,000, which is in the middle of the
pay scale. If the counselor is hired at the bottom of the pay scale, the actual
expenditure is $70,000. Although the position is staffed and the services
provided as planned under a “categorical type approach,” the LEA would be
required to “make up” $30,000 in additional expenditures the following year.
On the other hand, if the LEA hired a counselor at the top of the pay scale who
1
1
50 California State Auditor Report 2019-101
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2
earned $130,000, then that over-expenditure would need to be funded out of
a non-restricted source, impacting its ability to fund other services.
• Another hypothetical illustrates a different challenge. An LEA’s LCAP proposes
to hire three new counselors, but the LEA is unable to fill one of those positions
in the first year. Under a “categorical type approach,” the full cost of that
unfilled position would carry over on a one-time basis to the following year.
Hiring a fourth position would not be responsible since the funding for that
position is one-time.
In isolation of a single action on a LCAP, these scenarios may not seem significant,
but across an entire LCAP this return to a categorical-era focus on actual spending
rather than improving could pose serious challenges and substantially impact the
LEA’s budgeting process. Experience from past categorical programs underscores
that LEAs and schools sometimes struggle to come up with meaningful and useful
ways to expend time-limited, one-time dollars. LEAs generally spend 80 to 85 percent
of their budgets on personnel, which are mostly ongoing costs. Much research about
improvement in education settings has underscored the importance of sustainability
and continuity.
The possibility that LEAs might be under-delivering for the student groups that
generate additional funding is a concern to the Board. Although a categorical-type
approach focused only on expenditures may have the advantage of being easy to
tabulate, there is risk both that such an approach oversimplifies the relevant question
(are dollars being spent versus are students receiving better services, either in
quantity or quality) and that this oversimplification would turn the LCAP into an
accounting exercise instead of a planning document focused on improving
opportunities and outcomes for students.
As the audit report acknowledges, the Board is required to update the LCAP
template by January 2020 in response to amendments made by AB 1840, Chapter
426, Statutes of 2018. That legislation, which reflected a compromise negotiated
through the budget process, required significant changes to the LCAP template
intended to enhance transparency around the use of funds within LCAPs, including
the requirement to increase or improve services for low-income students, English
learners, and foster youth.
Board staff and California Department of Education (CDE) staff are in the process of
developing a recommendation for the revised template for consideration by the
Board at its January meeting. As part of this revision process, staff have convened
several stakeholder sessions in order to receive feedback and suggestions on
proposed changes. Proposed changes include:
1
1
2
51California State Auditor Report 2019-101
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3
• A new requirement that LEAs aggregate planned expenditures, and estimated
actual expenditures, for all actions included for each goal within an LCAP,
including source of funding for those expenditures.
• A new requirement to aggregate the expenditures associated with actions
that increase or improve services for low-income students, English learners, and
foster youth, and to show that aggregated total in conjunction with the
estimated additional revenue the LEA receives under LCFF based on those
students.
Recent legislation also requires LEAs to include, with their adopted LCAP, an LCFF
Budget Summary for Parents using a template developed by the Superintendent of
Public Instruction. This requirement requires LEAs to detail the total planned
expenditures on actions that increase or improve services for low-income students,
English learners, and foster youth; the estimated additional revenue the LEA receives
under LCFF based on serving those students; and how services for those student
groups are improved if the total planned expenditures are less than the estimated
additional revenue. The LCFF budget summary document also compares the total
planned expenditures on actions to increase or improve services with the total
estimated actual expenditures on those actions, and requires LEAs to explain how
any decline in actual expenditures impacted the LEA’s ability to deliver increased or
improved services.
The audit report notes concerns that stakeholders cannot easily and systematically
see how funds generated by low-income students, English learners, and foster youth
are being spent within the LCAP and whether the actions planned to benefit those
students were implemented as planned. We believe the revised LCAP template will
address these concerns. The new template will consolidate, in one place,
expenditures associated with all actions within the LCAP, broken down by source of
fund. The actions that contribute to increased or improved services will be clearly
marked, and the template requires the expenditures for those actions to be totaled
and compared to additional funding generated by low-income students, English
learners, and foster youth. To the extent stakeholders or policymakers desire to
understand how LCFF funds support those actions, the total expenditures can be
disaggregated into fund source based on the LCAP expenditure table.
In response to feedback from stakeholders, the new template that the Board will
consider in January 2020 will also require LEAs to identify within the Annual Update all
significant differences between planned actions and implemented actions, in
addition to material differences between planned expenditures and actual
expenditures. This new requirement will enhance transparency as to whether an LEA
implemented the actions it said that it would and, if not, require an explanation for
the departure. This requirement will also bring transparency as to whether LEAs
implement the actions as planned, which is absent from the current LCAP template.
52 California State Auditor Report 2019-101
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4
As intended by AB 1840, the new LCAP template will provide enhanced
transparency as to whether expenditures on actions to benefit low-income students,
English learners, and foster youth are on par with the additional funding the LEA
receives. The new template will provide this information without requiring a profound
shift in the underlying policy behind LCFF and will therefore maintain as a primary
focus whether the additional funds provided under LCFF are used to increase or
improve services provided to high-need students.
It is also important to note that early evidence suggests that LCFF is, in fact, leading
to improved outcomes for the students who generate the additional funds. Over the
last 18 months, several researchers have evaluated whether “LCFF is working” using
data-driven methodologies, with two showing positive evidence that the academic
performance of the student groups that generate additional funds under LCFF has
improved at a greater rate in school districts that have higher concentrations of
those students (and therefore receive additional funds under LCFF) and a third
showing strong academic gains for California relative to other states.
• Learning Policy Institute, 2018 (https://learningpolicyinstitute.org/product/ca-
school-finance-reform-brief): Increased LCFF funding and the greater share of
unrestricted funding that LCFF provided are correlated with greater gains in
graduation rates and student performance on CAASPP, with particularly strong
improvement on graduation rates and math for low-income students in those
districts that receive additional funds for those students under LCFF.
• America’s Promise Alliance, 2019 (https://www.americaspromise.org/2019-
building-grad-nation-report): California is one of three states for which
improvement in graduation rates correlates with gains in three other measures
of academic proficiency. The authors suggest this correlation shows that the
graduation rate gains are accompanied by real gains in student knowledge
and preparation, rather than lower standards.
• Learning Policy Institute, 2019
(https://learningpolicyinstitute.org/product/positive-outliers-districts-beating-
odds-report); Learning Policy Institute, 2019
(https://learningpolicyinstitute.org/sites/default/files/product-
files/Positive_Outliers_Qualitative_REPORT.pdf): A number of LEAs are beating
the odds compared to their peers, showing gains for African-American and
Latino students under LCFF and the new state academic standards. One
factor leading to this improvement is the flexibility around use of funds that
LCFF ushered in, and these LEAs consistently used that flexibility to recruit,
support, and retain a strong teacher workforce.
A 2019 Public Policy Institute of California study of inputs under LCFF also shows that
LEAs are using their LCFF funds consistent with the intent to increase or improve
services for high-need students: https://www.ppic.org/publication/school-resources-
and-the-local-control-funding-formula-is-increased-spending-reaching-high-need-
students/. Although that study highlights continued challenges in equal access to
53California State Auditor Report 2019-101
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5
qualified and experienced teachers, it shows that schools with more high-need
students are receiving greater staffing resources under LCFF, on average, even if
overall expenditures may not be substantially higher due to lower salaries paid to less
experienced teachers who are often assigned to these schools.
Recommendations to the Board
The audit report includes four recommendations to the Board.
Recommendation #1: Annual Update: Merge with Goals Section within the LCAP. The
audit report recommends that the Board merge the Annual Update section with the
Goals, Actions, and Services section.
Board staff anticipate recommending that the Board adopt a revised template at its
January 2020 meeting that integrates the annual update and the LCAP consistent
with this recommendation.
AB 1840, Chapter 426, Statutes of 2018, substantially restructured the LCAP template
statutes and consolidated the LCAP and Annual Update into a single section of
statute. Under prior law, the annual update had been addressed in a separate code
section from the LCAP itself, which limited the Board’s ability to integrate the annual
update within the LCAP. The updated statute specifies that the LCAP and annual
update can be part of the same template, which will allow the template to embed
the progress monitoring features of the annual update within the planning sections.
We believe that this change will make it easier for stakeholders to understand
whether the actions are being implemented as planned and how those actions are
impacting opportunities and outcomes for students. It will also reinforce the
expectation that the LCAP process support strategic planning, which will help LEAs
monitor progress and evaluate whether the planned actions are improving student
outcomes. Finally, this revision will substantially reduce the length of LCAPs, which
should help improve transparency and accessibility for stakeholders.
Recommendation #2: LCAP Annual Update: Evaluating Implementation of Individual
Actions. The audit report recommends that the Board amend the LCAP template to
require LEAs to include analysis of the effectiveness of each individual action
included in the LCAP, in addition to analyses for overarching goals.
Board staff do not anticipate recommending that the Board adopt a revised
template that requires LEAs to evaluate the effectiveness of each individual action
included in the LCAP, for several reasons.
First, such an approach assumes a linear causal chain between each individual
action and a particular student outcome. Consistent with research and practical
experience in education policy, several studies analyzing LCAPs have found that
3
54 California State Auditor Report 2019-101
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6
multiple, individual actions work together to support a broader goal to improve
performance on a set of interrelated metrics.
For example, a school district might set a goal of improving literacy in third grade and
identify several actions and services to achieve that goal, such as adopting a new
instructional program; providing professional learning to teachers, administrators, and
other personnel to implement that program effectively; and providing new
instructional materials. Additionally, the district may adopt related actions such as
hiring new counselors to support struggling students, hiring attendance counselors to
help improve student attendance, or purchasing new data systems to provide
teachers with analytics on individual student performance. This recommendation
would artificially force LEAs to view each action in isolation, which is as likely to
undermine meaningful evaluation of programmatic effectiveness as to enhance it.
Additionally, the audit report correctly notes the challenge presented for
stakeholders when LCAPs are hundreds of pages long. A number of the changes to
the LCAP template that staff expect to present to the Board in January 2020—such as
integrating the annual update with the LCAP, incorporating summary tables for
expenditures within the LCAP, and providing the required justification for LEA-wide
and schoolwide actions that contribute to increased or improved services in a single
section—will reduce the overall length of LCAPs and make it easier for stakeholders
to see, in one place, key information about the relevant portion of the LCAP.
This recommendation is at odds with that goal. For a hypothetical LCAP with 120
actions, this recommendation would entail 120 fields of new text, which likely would
be repetitive. Moreover, the audit report notes that some LCAPs include formulaic
responses to narrative prompts that do not provide meaningful analysis or information
for stakeholders. Mandating action-by-action analysis seems to invite precisely this
type of an approach.
Responsive to the underlying concern, the recommended LCAP template instructions
will include language specifying that LEAs may group actions under a goal with a set
of metrics and encouraging LEAs to do so if there are multiple, unrelated actions
included under a single goal. This grouping would allow for more robust analysis of
whether the strategy the LEA is using to impact a specified set of metrics is working.
Recommendation #3: Increased or Improved Services: Schoolwide and Districtwide
Actions. The audit report recommends that the Board update the LCAP instructions to
include key information from CDE’s Uniform Complaint Procedure (UCP) appeal
decisions related to LCAPs. Specifically, the audit report references UCP decisions
related to the requirement that LEAs explain how districtwide and schoolwide actions
are principally directed toward serving low-income students, English learners and/or
foster youth if those actions are used to demonstrate increased or improved services
for those student groups.
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The revised LCAP template presented to the Board in January 2020 will include
instructions that reflect these appeal decisions.
Additionally, Board staff will work with the CDE to include this information on the
“Frequently Asked Questions” section of CDE’s website related to LCFF and the LCAP,
and to include relevant information from any future UCP appeal determinations.
Recommendation #4: Accessibility of Language. The audit report recommends that
the Board “instruct districts to ensure that their LCAPs are sufficiently clear and
effective, including but not necessarily limited to ensuring that districts articulate a
logical connection between their needs and goals, provide sufficiently detailed
descriptions of services within the LCAP’s analysis section, and are written in a
manner that is easily understandable.”
The revised LCAP template presented to the Board in January 2020 will include
instructions emphasizing the LCAP’s purposes, which include ensuring that
stakeholders can clearly see and understand how the LEA is aligning its budgetary
resources in response to performance across the statutorily defined priorities and
whether those strategies are working to improve opportunities and outcomes for
students. The recommended instructions will also detail the purpose of each LCAP
section to reinforce both the importance of conveying the information in each
section understandably to stakeholders and how that particular information
reinforces the planning process that is ultimately supposed to be memorialized in the
adopted LCAP. Finally, the recommended instructions will also include language in
the instructions encouraging LEAs to avoid jargon and review language in draft
LCAPs for accessibility to non-educators and the broader public.
Additional Comments
Although not addressed in the recommendations, the audit report includes a
discussion of the transition from the state’s prior revenue limits and categorical
funding system to LCFF. The report included a calculation of LCFF funding that LEAs
received prior to 2018 as the state transitioned toward fully funding LCFF, specifically
the breakdown of base, supplemental, and concentration funds within the LCFF
formula, that differed from the method that LEAs applied pursuant to expenditure
regulations adopted by the Board. The alternate calculation in the audit report
assumed that the share of LCFF funds attributable to the supplemental and
concentration factors would immediately transition to fully funded levels, but
prorated to the LEA’s then-total level of funding.
When LCFF funding began in 2013-14, the state was just recovering from the Great
Recession and LEAs had gone through years of significant budget cuts. LCFF was a
significant restructuring of the method under which LEAs received state funding, and
the statutory formula included a gradual transition that would phase-in full funding
over a period of several years. The Board’s regulations reflected this gradual
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approach adopted by the Legislature: each LEA was required to calculate its
obligation to increase or improve services annually relative to a baseline tied to
actions that it provided to one of the three student groups that generate additional
LCFF funds in the year immediately preceding LCFF’s enactment.
Notably, stakeholders did not submit comments in the regulatory process
recommending that the Board adopt an approach similar to the alternative
presented in the audit report, likely due to the recognition of how disruptive such an
approach would have been. Using just one example from Figure 7 of the report,
without a gradual phase-in period, the three school districts audited would have had
to redirect $140 million, overnight, to actions that “increase or improve services.”
However, a significant portion of that funding would have been budgeted in the
prior year for core programs or other activities that would not meet the regulatory
standard for increasing or improving services. The audit report’s alternative method of
calculation would likely have resulted in substantial cuts to LEAs’ core programs,
including layoffs of personnel, and implementation of a host of new programs all at
once, which would likely have undermined the effectiveness of those programs.
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Comments
CALIFORNIA STATE AUDITOR’S COMMENTS ON THE
RESPONSE FROM THE CALIFORNIA STATE BOARD
OF EDUCATION
To provide clarity and perspective, we are commenting on
the State Board’s response to our audit. e numbers below
correspond to the numbers we have placed in the margin of the
StateBoard’sresponse.
An underlying theme within the first two pages of the State Board’s
response is that implementation of some of our recommendations
may lead the State down a path toward a return to categorical
funding. During our work on this audit, representatives from
the State Board and CDE made similar statements on various
occasions; namely, that monitoring of district spending equates to
categorical funding. We fundamentally disagree with that notion; in
fact, we state on page that tracking information about districts’
spending of their LCFF allocations does not represent a return to
categorical funding.
A critical point of our recommendations from this audit is that
the State needs to better establish the linkages among three key
components of the LCFF process: funding from the State (orinputs)
to districts, the services that districts purchase with that funding,
and improvements in student educational performance (outcomes).
We depict this point in Figure on page of our report. Ignoring
the linkages between these LCFF components or ignoring the
inputs to the LCFF process significantly reduces stakeholder
assurance that the billions the State invests annually in LCFF—
billion for fiscal year – alone—have the desired effect of
improving student achievement.
As we mention on page , by collecting and reporting additional
information about the districts’ use of supplemental and
concentration funding, the State could better ensure that it and
other stakeholders understand how the districts’ spending of these
funds affects intended student groups and whether further action is
necessary to close persistent achievement gaps.
Contrary to the State Board’s assertion, tracking the districts’
spending of LCFF funding is not merely “an accounting exercise.”
As we indicate in Comment , the State needs to better establish
the linkages between funding, services, and student achievements.
Furthermore, we explain on page that the current requirement
that a district must spend supplemental and concentration
funding to increase or improve services by a specific percentage is
essentially meaningless because it is unclear how a district would
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demonstrate such improvement and neither the county offices nor
CDE is responsible for verifying that the district actually achieved
the specific percentage increase in services. is approach reduces
transparency and accountability by leaving stakeholders without
a legitimate, tangible measurement against which to hold districts
accountable for using the funding they receive to provide services to
improve student achievement.
e State Board takes a narrow view of our recommendation. We
recommend on page that it require districts to include analyses
of effectiveness of individual services, in addition to analyses for
overarching goals, so a broader perspective would not be lost. Our
recommendation is consistent with state law, which as we state
on page , requires the LCAP template to include an assessment
of the effectiveness of specific services described in the LCAP
toward achieving the goals. e analyses of individual services
would allow districts to highlight the effectiveness of particular
services. In fact, Oakland Unified provided precisely this kind
ofanalysis in its LCAP, as we state on page . Without this kind of
information, it can be difficult to determine, from among dozens
of services provided, which particular services were effective in
improvingoutcomes.
We disagree. Rather than being repetitive like the current
template, the analysis we recommend would provide unique,
critical information that would enable stakeholders to hold
districts accountable to use their limited resources to continue
funding effective services and discontinue ineffective services.
As we indicate on page , the excessive length of LCAPs results
from districts including descriptions of numerous services, which
obscures whether any particular service was effective. We believe
having services/actions for a single goal would reduce clarity for
stakeholders, as we had difficulty with the services that Clovis
Unified included for one of its goals.
We appreciate the State Board’s perspective on the State’s
transition period for LCFF. Because a key part of our audit included
examining how districts spent their LCFF funding, we estimated
the difference in the results between the funding method used
during transition and the method the State will use upon full
implementation. Additionally, as we state on page , the State’s
decisions to base supplemental and concentration funding amounts
on prior year spending rather than proportions of intended student
groups likely deferred improvements in performance outcomes for
intended student groups.
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We believe the State Board overstates the disruption of the
approach we outlined that applies the funding formulas described
in State law. Our analysis of the three districts’ funding revealed that
by basing supplemental and concentration funds on the proportions
of intended student groups, districts would not have lost funding
for their core programs. Rather, at that time, districts would have
faced the decisions of selecting which categorical programs to
retain to increase and improve services for intended student groups
and how to use their new flexibility to address local needs. In fact,
the three districts continue to provide services similar to those
provided under some of the former categorical programs and fund
them with supplemental and concentration funding by principally
directing them toward intended student groups. As we state on
page , the approach the State chose likely delayed improvements
in performance outcomes for intended student groups.
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