Advocates say Recalculation Promises Hundreds of Millions in New or Improved Services for Low-income Students, English-language Learners and Foster Youth in Los Angeles

LOS ANGELES—Parents, students and education advocates scored a major victory with a precedent-setting ruling by the California Department of Education that the Los Angeles Unified School District (LAUSD) must correct a multi-million dollar spending error involving funds focused on high need students in Los Angeles. This is the first ruling of its kind on school districts' spending obligations under the Local Control Funding Formula (LCFF), the state's 2013 finance reform law.

"The CDE delivered a clear message that LAUSD can no longer shortchange high need families in Los Angeles," said Alberto Retana, president & CEO of Community Coalition of South Los Angeles. "We expect the LAUSD to comply swiftly, and ensure an equitable 2016-17 budget."

The California Department of Education ruled in favor of the Community Coalition of South Los Angeles and Los Angeles school district parent Reyna Frias, who had filed an administrative complaint with school officials claiming LAUSD diverted funds intended for high need students in violation of the state's education finance reform law. The Uniform Complaint Procedure (UCP) complaints were filed last September and grew out of a lawsuit filed by the Community Coalition and Ms. Frias last July. The UCP complaints were denied by LAUSD and separately by the Los Angeles County Office of Education and subsequently appealed to the California Department of Education.

At issue is the allocation of more than $2 billion in funding over the next decade which, under the new education finance law, is required to be used by LAUSD to increase or improve services for low-income students, English-language learners and foster youth in Los Angeles. The UCP complaint asserted that the district was improperly reducing its obligation towards high need students by crediting itself every year for some $450 million spent on special education services that were actually part of the district's basic educational program. The CDE ruling agreed, finding that LAUSD's approach “is not consistent with the LCFF statute and regulations” and ordering the district to halt its practice.

"For two years, the district has flaunted LCFF's legal requirements so it could avoid its full obligation to increase or improve services for high need pupils in proportion to the funds these students generate for the district,” said Public Advocates managing attorney and counsel in the case, John Affeldt. "We applaud the Department for issuing its straightforward legal ruling and ordering LA Unified to comply with the law under LCFF. We look forward to seeing the district halt this illegal practice and invest more fully in its low-income students, English learners and foster youth."

The lawsuit was filed on behalf of Ms. Frias and the Community Coalition of South Los Angeles by Public Advocates, the ACLU Foundation of Southern California, and Covington & Burling LLP.

"The department's decision is an important victory, and should serve as a reminder to all districts that officials cannot subvert their obligation to provide sufficient funding to ensure that high need students receive a quality education," said Hector Villagra, executive director of the ACLU of Southern California (ACLU SoCal). "We urge LAUSD to move swiftly to adopt the state's decision, and to work with the community to consider ways to make up for the last two years of underfunding of services for those students. LAUSD has already wasted too much time and money pursuing an interpretation of the law that shortchanged students who need more, not less, support."

The decision from the California Department of Education requires LAUSD to revise its calculations for its 2016-17 district spending plan (known as the Local Control Accountability Plan, or LCAP, under LCFF) so that all supplemental and concentration funds are directed towards services for high need students solely on the basis of their status as low-income students, English learners or foster youth. By removing the $450 million from its LCFF calculations as ordered, attorneys from Public Advocates, ACLU SoCal and Covington & Burling estimate that the district's obligation to increase or improve services for high need students will grow by approximately $380 million in 2016-17 alone.

"The LCAP process is underway," said Laura Muschamp, counsel with Covington & Burling. "And, while LAUSD has 35 days from its receipt of CDE's investigative report to request reconsideration, the CDE decision should ensure that LAUSD sets goals and identifies specific actions it will take during the 2016-17 school year to increase or improves services for Los Angeles' high need students."

Download the California Department of Education determination

Download a background brief on LCFF and the LAUSD complaint

Media contact: Sandra Hernandez, shernandez@aclusocal.org, 213-977-5247
Isabel Alegria, ialegria@publicadvocates.org, 415-431-7434, 510-541-5428
Alexandra Patchen, apatchen@cov.com, 212-841- 1102

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