Analysis of Education Mandates

Analysis of Education Mandates MAC TAYLOR • L E G I S L A T I V E A N A L Y S T • FEBRUARY 26, 2014 AN LAO REPORT CONTENTS Executive Summary ...............................................................................................................................3 Introduction ...........................................................................................................................................5 Mandate Reimbursement Process .......................................................................................................5 Traditional Process.............................................................................................................................................................5 Flaws With Traditional Process ......................................................................................................................................8 State Efforts to Improve Traditional Process ............................................................................................................8 Unresolved Issues ............................................................................................................................................................10 Assessment of New Mandates ............................................................................................................12 Parental Involvement Programs .................................................................................................................................12 Williams Case Implementation ...................................................................................................................................14 Uniform Complaint Procedures (Complaints) .......................................................................................................17 Uniform Complaint Procedures (Compliance) ......................................................................................................19 Developer Fees .................................................................................................................................................................20 Public Contracts ...............................................................................................................................................................21 Community College Construction .............................................................................................................................22 Charter Schools IV ...........................................................................................................................................................23 Summary of Recommendations .........................................................................................................26 2 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT EXECUTIVE SUMMARY Overview The California Constitution requires the state to reimburse local governments for new programs or higher levels of service the state imposes on them. In the area of education, local governments that qualify for reimbursement include school districts, county offices of education (COEs), and community colleges—collectively referred to as local educational agencies (LEAs). Assessment of Mandate Funding Process Traditional Mandate Reimbursement Process Based on Claimed Costs. Under the traditional mandate reimbursement process, the Commission on State Mandates (CSM) first determines whether an activity is a mandate. Next, LEAs are required to document in detail how much they spent on a particular mandate. The LEAs then are required to submit this information on an ongoing basis to the State Controller’s Office (SCO) for review and approval. Problems With Traditional Reimbursement Process. Because reimbursements under the traditional process are based on actual costs, LEAs lack an incentive to perform required activities as efficiently as possible. The traditional process also does not consider how well an activity is performed. Because of these shortcomings, the state can end up paying some LEAs notably more than other LEAs even if they perform notably worse. State Recently Created Two Alternative Reimbursement Systems. To address some of the flaws associated with the traditional process, the state in recent years created two alternative reimbursement systems. • Reasonable Reimbursement Methodology (RRM). In 2004, the state created a new reimbursement process called an RRM. Rather than requiring LEAs to submit detailed documentation of actual costs, an RRM uses general allocation formulas or other approximations of costs. An RRM may be proposed by the Department of Finance (DOF), SCO, an affected state agency, the claimant, or any other interested party. An RRM must be approved by CSM. • Education Mandates Block Grants. As part of the 2012-13 budget, the state created two block grants for education mandates. One block grant is for school districts, COEs, and charter schools (for which some mandated activities apply). The other block grant is for community colleges. Instead of submitting detailed claims on an ongoing basis that track how much time and money was spent on each mandated activity, LEAs can choose to receive funding for all mandated activities included in the block grants. Block grant funding is provided on a per-student basis, with different rates for different LEAs. Recommend Repealing RRM Process for Education Mandates. Though the intent of both the block grants and RRMs is to provide a simpler way to distribute mandate funding to LEAs, the block www.lao.ca.gov Legislative Analyst’s Office 3 AN LAO REPORT grants have several advantages. With the block grants, the Legislature can adjust funding annually based on expected costs. Moreover, the state has a strong incentive to ensure block grant funding is reasonable so that LEAs continue to participate. In contrast, RRMs are determined by CSM and disagreements over them must be resolved through litigation. For these reasons, we recommend the Legislature repeal the RRM process for education mandates. (We recommend continuing to allow the RRM process, however, for other local governments, as they do not have access to a block grant.) Recommend Assessing Multiple Sources of Information to Adjust Block Grant Funding. When the block grants were created in 2012-13, the state did not specify either how new mandates would be added to the block grants or how block grant funding would be adjusted moving forward. We recommend the Legislature make block grant funding adjustments by considering a variety of factors, including: (1) the variation in initial mandate claims submitted by LEAs, (2) the number of LEAs performing the activity, and (3) the likelihood that some initial claims may be overstated. In select cases, we recommend the Legislature also consider requesting DOF or our office to provide independent cost estimates. Also Recommend Adjusting Block Grants for Future Cost Increases. We recommend the Legislature apply a cost-of-living adjustment (COLA) to the block grants whenever it applies a COLA to other education programs. In 2014-15, providing a 0.86 percent COLA to the block grants (consistent with other programs) would cost $1.9 million for schools and $0.3 million for community colleges. Assessment of New Mandates CSM Recently Approved Seven New Education Mandates. The CSM recently approved seven new mandates. Six of these mandates apply to schools while two apply to community colleges. (One mandate applies to both.) Most of these mandates were enacted over a decade ago, but CSM only recently completed them due to a backlog in its workload. Governor’s Budget Addresses Four of the Seven New Mandates. The Governor proposes to add three of these new mandates to the block grant and repeal one, with no adjustments to block grant funding. (The administration indicates it inadvertently omitted one other mandate from its budget proposal and intentionally omitted two other mandates because CSM had not finished them prior to the release of the Governor’s budget.) Recommend Legislature Take More Nuanced Approach. In contrast to the Governor’s approach to fund or eliminate entire mandates, we recommend the Legislature assess each activity contained within a mandate. (Mandates can include anywhere from one to dozens of different requirements.) For each activity, we recommend the Legislature consider whether the requirement serves a compelling state purpose. We also recommend the Legislature consider whether the mandate produces positive results and whether less costly alternatives exist. Based on these criteria, we recommend the Legislature repeal four mandates in their entirety and take a mixed approach on three mandates. In these three latter cases, we recommend funding certain activities while repealing or modifying others. Because we estimate the costs associated with the retained activities to be minimal, we think the Legislature does not need to increase block grant funding. 4 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT INTRODUCTION This report is about certain education activities education mandates—including four mandates determined to be state mandates. The report addressed by the Governor in his 2014-15 budget consists of two parts. In the first part, we provide proposal—and provide recommendations on background information on the state’s traditional whether to fund, suspend, repeal, or modify them. process for reimbursing education mandates, The second part of this report fulfills a requirement discuss recent efforts by the state to improve for our office to analyze new mandates, as specified this process, and recommend ways to address by Chapter 1124, Statutes of 2002 (AB 3000, unresolved issues relating to reimbursements. In Committee on Budget). the second part of the report, we assess seven new MANDATE REIMBURSEMENT PROCESS T radiTional P rocess CSM asserting the new requirement imposes a new program or higher level of service on them. In this section, we describe the state’s Based on statutory guidelines and case law process for determining whether an activity is a governing mandate reimbursements, CSM adopts reimbursable state mandate. We also describe the a “Statement of Decision” articulating the reasons traditional process used by the state to provide for determining whether a test claim is a mandate. reimbursement for these activities. (The box on the next page provides more detail Constitution Requires the State to Reimburse on the rules governing mandate determinations.) Local Governments for Mandated Activities. In Following adoption of the Statement of Decision, 1979, voters passed Proposition 4, which added a CSM adopts “Parameters and Guidelines” that list requirement to the California Constitution that the specific activities that are reimbursable. local governments be reimbursed for new programs LEAs Submit Claims for Reimbursement. or higher levels of service the state imposes on After CSM has approved a list of reimbursable them. In the area of education, school districts, activities for a mandate, SCO prepares claim forms. COEs, and community colleges—collectively These forms require LEAs to document in detail referred to as LEAs—may seek reimbursement for how much they spent on a particular mandate. For undertaking mandated activities. (Though some example, LEAs may be required to submits copies mandated activities also apply to charter schools, of time sheets for staff whose job responsibilities the state does not consider charter schools to be include performing the mandated activity. The local governments.) SCO then reviews these claims for the required Multistep Process Used to Determine if an documentation and, subject to funding in the state Activity Is a Mandate. As part of its response to budget, provides reimbursement. The SCO in some Proposition 4, the Legislature created CSM to hear cases also conducts detailed audits of claims. and decide claims that a state law, executive order, Funding for New Mandates Considered in or regulation imposes new requirements on LEAs. State Budget. Typically, within one year of LEAs Following the enactment of a new requirement, submitting initial claims for reimbursement, CSM LEAs have one year to file a “test claim” with www.lao.ca.gov Legislative Analyst’s Office 5 AN LAO REPORT prepares a statewide cost estimate based on these has not provided funding to pay for education initial claims. After the cost estimate is prepared, mandates, effectively deferring these costs. mandates typically are considered for funding in (Though a superior court in 2008 found the state’s the state budget. The Legislature generally has four practice of deferring education mandate payments options at this point: to fund, modify, suspend, or unconstitutional, constitutional separation repeal the mandate. (Suspending a mandate relieves of powers means the courts cannot force the LEAs of performing the activity for one year only, Legislature to make appropriations for mandates.) while repealing a mandate permanently eliminates The state’s decisions to defer payments for mandates it.) As shown in Figure 1, schools and community has contributed to a considerable backlog of unpaid colleges have about 40 and 14 active mandates, mandate claims. Another factor contributing to respectively, that are included in the state budget. the sizeable backlog are recent CSM decisions Schools and community colleges each have another approving retroactive payments for two extremely dozen mandates currently suspended. expensive education mandates—Graduation State Has Considerable Backlog of Unpaid Requirements and Behavioral Intervention Plans Mandate Claims. In many years, particularly (BIP). Currently, we estimate the state’s backlog of during times of budgetary shortfalls, the state unpaid mandate claims to total about $4.5 billion. Factors for Making Mandate Determinations In making a mandate determination, the Commission on State Mandates (CSM) relies upon various rules that have been established in state law and through court rulings. To start, CSM must first consider whether the activity (1) is a new governmental program and (2) requires a higher level of governmental service. For example, state laws that apply equally to the public and private sector (such as minimum wage laws) are not considered state reimbursable mandates because they are not considered to be a “governmental program.” Even if an activity satisfies these two main criteria, various other rules can exclude an activity from being reimbursable. The main exclusions are: • Federal Requirements. An activity required under federal law is not reimbursable even if state law requires the same activity. • Voter-Imposed Requirements. An activity required as the result of a voter-approved measure is not reimbursable. • Downstream Costs Associated With Optional Activities. If a local educational agency has the option of undertaking an activity, then it is not reimbursable, even if specific rules govern how the activity is to be performed. • Offsetting Savings and Revenues. Even if an activity is found to be a mandate, it may not qualify for state reimbursement if there are offsetting savings generated by performing the activity. Similarly, any revenues available to pay for the activity may be applied as an offset. • Requirements Enacted Prior to 1975. If a requirement was enacted prior to 1975, then it is not reimbursable. 6 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT Figure 1 Education Mandatesa Schools Active Absentee Ballots Interdistrict Attendance Permits Academic Performance Index Intradistrict Attendance Agency Fee Arrangements Juvenile Court Notices II AIDS Prevention/Instruction Law Enforcement Agency Notificationc Annual Parent Notificationb Notification of Truancy CalSTRS Service Credit Open Meetings/Brown Act Reform Caregiver Affidavits Physical Performance Tests Charter Schools I, II, and III Prevailing Wage Rate Child Abuse and Neglect Reporting Pupil Suspensions, Expulsions, and Expulsion Appeals COE Fiscal Accountability Reporting Pupil Suspensions and Expulsions II Collective Bargaining Pupil Health Screenings Comprehensive School Safety Plans Pupil Promotion and Retention Criminal Background Checks I and II Pupil Safety Notices Differential Pay and Reemployment School Accountability Report Cards Expulsion of Pupil: Transcript Cost for Appeals School District Fiscal Accountability Reporting Financial and Compliance Audits School District Reorganization Habitual Truants Teacher Notification: Pupil Suspensions/Expulsionsd High School Exit Examination The Stull Act Immunization Records (includes Hepatitis B) Threats Against Peace Officers Suspended Absentee Ballots Mandate Reimbursement Process I and II Brendon Maguire Act Physical Education Reports County Treasury Withdrawals Pupil Residency Verification and Appeals Grand Jury Proceedings Removal of Chemicals Health Benefits for Survivors of Peace Officers School Bus Safety I and II Law Enforcement Sexual Harassment Training Scoliosis Screening Community Colleges Active Agency Fee Arrangements Health Fee Elimination Cal Grants Minimum Conditions for State Aid CalSTRS Service Credit Open Meetings/Brown Act Collective Bargaining Prevailing Wage Rate Community College Construction Reporting Improper Governmental Activities Discrimination Complaint Procedures Threats Against Peace Officers Enrollment Fee Collection and Waivers Tuition Fee Waivers Suspended Absentee Ballots Law Enforcement Jurisdiction Agreements Brendon Maguire Act Law Enforcement Sexual Harassment Training County Treasury Withdrawals Mandate Reimbursement Process I and II Grand Jury Proceedings Sex Offenders: Disclosure by Law Enforcement Health Benefits for Survivors of Peace Officers Sexual Assault Response Procedures Integrated Waste Management Student Records a Reflects name of mandate as it appears in 2013-14 Budget Act. Often, mandate includes only very specific activities associated with its name. b Also includes Schoolsite Discipline Rules and Alternative Schools. c Also includes Missing Children Reports. d Also includes Pupil Discipline Records. CalSTRS = California State Teachers’ Retirement System and COEs = county offices of education. www.lao.ca.gov Legislative Analyst’s Office 7 AN LAO REPORT F laws w iTh T radiTional P rocess any funding the state provides for past costs instead is available for general purposes. (Moving forward, In this section, we discuss several flaws with the average time for mandate determinations likely the traditional mandate reimbursement process. will decrease. In the early 2000s, CSM received a Claims Process Lacks Incentives for Efficiency. significant influx in test claims due to legislation Many mandate reimbursments are based on the that gave LEAs one year to submit test claims for amount of time devoted to a required activity any laws passed prior to this time. A considerable and the salary of the staff member performing backlog in test claims developed, which CSM only it. In other words, the more time devoted to an now is close to eliminating.) activity and the higher the staff member’s rank, the greater the reimbursement. As a result of this s TaTe e FForTs To i mProve reimbursement structure, districts lack an incentive T radiTional P rocess to perform the required activity at the lowest cost In recent years, the state has tried to address possible. This reimbursement structure also can some of the shortcomings associated with the result in a wide variation in district reimbursement traditional mandate reimbursement process. rates for the same activity. Below, we discuss two alternative reimbursement Claims Process Ignores Effectiveness. Under structures the state recently adopted to improve the the claims process, districts can claim expenses way mandates are paid. for performing an activity regardless of how well it is performed or whether its underlying policy Reasonable Reimbursement Methodology objectives are achieved. For example, school RRM Created as Alternative Way to Pay for districts receive the same amount for sending a Mandates. Chapter 890, Statutes of 2004 (AB 2856, form letter home when a student becomes a truant, Laird), created an alternative process for the state regardless of whether the districts’ efforts increase to make mandate reimbursements known as an parental involvement or reduce dropout rates. RRM. Rather than requiring LEAs (and other local Payments Not Aligned With When Activities governments) to submit detailed documentation Are Performed. Historically, a long lag—from of actual costs, an RRM uses general allocation several years to multiple decades—has existed from formulas or other approximations of costs. An RRM the time legislation imposing new requirements is may be proposed by DOF, SCO, any affected state enacted to the time CSM releases a statewide cost agency, the claimant, or any other interested party. estimate. In some cases, a multiyear lag emerges The CSM reviews and approves an RRM as part of as the result of the multiple steps entailed in the its Parameters and Guidelines for reimbursement. determination process. In other cases, a multi- RRM Intended to Address Some Problems decade lag occurs as a result of litigation involving With Reimbursement System. The RRM process a CSM decision. Thus, by the time a mandate is was intended to alleviate local governments from considered for funding in the state budget, LEAs the burden of documenting actual mandate typically have already incurred costs for some costs and alleviate the state from the burden of time. For example, BIP requirements were enacted reviewing and paying associated claims. It also was in 1993, yet CSM only issued Parameters and intended to address state concerns with variations Guidelines for the mandate last year. Because the in reimbursement rates across local governments. required activities have already been performed, In addition, the RRM process was intended to 8 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT provide local governments with incentives to on a per-student basis, as measured by average perform activities more efficiently because they are daily attendance (ADA) for schools and full-time reimbursed at a fixed rate. equivalent students (FTES) for community colleges. RRM Used Seldomly. Despite the intended The rate varies by type of LEA and, for schools, benefits of RRMs, the RRM process in practice has by grade span. The difference in rates is because been used rarely, with approved RRMs in effect for different mandates apply to different LEAs and only three school mandates (and no community because one mandate for schools (Graduation college mandates). In addition to being rarely used, Requirements) is exceptionally costly and only serious disagreements have occurred between the applies to high schools. The rates are as follows: state and LEAs over all three proposed RRMs. • School districts receive $28 per student in These disagreements have created lengthy delays grades K-8 and $56 per student in grades in the RRM approval process. In one of the three 9-12. cases, decisions also were delayed due to subsequent litigation over the approved RRMs. • Charter schools receive $14 per student in grades K-8 and $42 per student in grades Education Mandates Block Grants 9-12. (Even though charter schools are not Block Grants Also Created as Alternative eligible to submit mandate claims, the state Funding System. As another way to address some included them in the block grant given of the problems with the traditional mandate some mandates apply to them.) reimbursement system, the state two years ago • COEs receive $28 per student in grades K-8 created two block grants for education mandates. and $56 per student in grades 9-12. This rate One block grant is for school districts, COEs, and applies to students enrolled in county-run charter schools (hereafter referred to collectively as programs. In addition, COEs receive an “schools”). The other block grant is for community extra $1 per student for all students located colleges. Instead of submitting detailed claims within the county, in recognition of the on an ongoing basis listing how much time and fact that some mandates entail broader money was spent on each mandated activity, LEAs oversight responsibilities performed by the can choose to receive funding for all mandated COE. activities included in the block grants. Except for new mandates not yet included in the state budget, • Community colleges receive $28 per all active education mandates currently are included student. in the block grants. (Due to concerns regarding the Block Grant Participation High. As shown state’s constitutional obligation to reimburse LEAs in Figure 2 (see next page), a sizeable majority of for mandated costs, the state retained the existing LEAs have chosen to participate in the block grants mandates claiming process for LEAs not opting into rather than access funding through the traditional the block grants.) claims process. (As noted earlier, the state has Block Grants Distribute Payments on chosen to defer funding for traditional mandate Per-Student Basis. The 2013-14 budget includes claims in recent years.) This includes 84 percent block grant funding of $217 million for schools of school districts, 79 percent of COEs, and nearly and $33 million for community colleges. Block all charter schools and community colleges. These grant funding is allocated to participating LEAs www.lao.ca.gov Legislative Analyst’s Office 9 AN LAO REPORT to provide insufficient Figure 2 funding for the block Block Grant Participation Is High grants, LEAs could send 2013-14 a strong signal of their Percent of disapproval by electing Number Total Percent ADA/FTES Participating Number Participating Covered not to participate. In Charter schools 987 1,008 98% 99% contrast, RRMs are School districts 795 941 84 94 determined by CSM and County offices of education 46 58 79 91 disagreements over them Totals 1,828 2,007 91% 95% must be resolved through Community Colleges 68 72 94% 97% litigation, with the judicial ADA = average daily attendance and FTES = full-time equivalent students. branch rather than the Legislature ultimately LEAs serve 95 percent of ADA at schools and making a budget decision—and doing so apart 97 percent of FTES at community colleges. from other main budget decisions. As indicated U i nresolved ssUes earlier, disagreements between the state and LEAs also have hindered the ability of CSM to approve In this section, we make two main RRMs. In contrast, a large majority of LEAs have recommendations for how the state can build chosen to receive funding for mandates through upon its recent efforts to improve the mandate the block grants, suggesting that the budget process reimbursement system. has provided a better forum for the state and LEAs Streamlining Reimbursement Methods to determine reasonable reimbursement amounts than the RRM process. Block Grants and RRM Serve Overlapping Recommend Repealing RRM for Education Purposes. The intent of both the block grant and Mandates. For the reasons cited above, we the RRM is to provide a simpler way to distribute recommend the Legislature repeal the RRM mandate funds to LEAs. Both methods of paying process for education mandates. (However, we LEAs fulfill this purpose by allowing LEAs to recommend continuing to allow the RRM process access funding through a simple formula rather to be used for other local governments, as they do than submitting detailed claims documenting not have access to a block grant.) actual costs on an ongoing basis. Block Grants Keep Budget Decisions in Adding New Mandates to the Block Grants Regular Budget Process. One major difference No Existing Process for Adding Mandates to between the block grants and RRMs is the block Block Grants. When the block grants were created grants are considered as part of the regular budget in 2012-13, nearly all active mandates were included process whereas RRMs are determined by CSM in in them, along with an amount of funding similar a quasi-judicial forum. For the block grants, the to the amount being claimed for the included Legislature can adjust funding annually based on mandates. However, the state did not specify how expected costs, as it does for any other program new mandates would be added to the block grants area. Moreover, the state has a strong incentive to and how block grant funding would be adjusted ensure block grant funding is reasonable so that moving forward. In 2013-14, the state added a LEAs continue to participate. If the state were 10 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT few mandates to the block grants. Most notably, costs on a statewide basis. In cases such as the state added the Graduation Requirements these, we recommend the Legislature scale mandate to the schools block grant, created grade up the costs based on how many LEAs are span weights (because this mandate is so costly expected to be performing the mandate. and only affects high schools), and increased the • Audit Results. The SCO only performs high school rate from $28 to $56 per student. In a full audit on about 5 percent of costs contrast, the state added the Pupil Suspensions and claimed for LEAs. These audits tend to Expulsions II mandate to the block grant but made be targeted to high-risk claims. Recent no adjustment to block grant funding. The state data indicate SCO disallows 76 percent of also did not provide an inflation adjustment to the the audited costs claimed for schools and block grant. 56 percent for community colleges. These Recommend Assessing Multiple Sources of high disallowance rates suggest that some Information to Adjust Block Grant Funding. claims overbill the state. We recommend Moving forward, we recommend the Legislature the Legislature take this into account when take a more systematic approach when determining deciding how to adjust the block grants. how to adjust block grant funding to account (For example, by making a small downward for new mandates. The statewide cost estimates adjustment to recognize some initial claims prepared by CSM offer a reasonable starting point for new mandates likely include disallowed because they show how many initial claims have costs.) been filed and associated costs. To determine if a particular cost estimate is reasonable, we • Other Cost Estimates. Though CSM’s recommend the Legislature consider the following: statewide cost estimate provides a good • Variation in Claims. Mandate claims starting point for considering how much sometimes can vary widely by district. In funding to provide for a mandate, we some cases, this variation may be related to recommend the Legislature also consider differences in the size, type, or location of other cost estimates, particularly for larger LEAs, but in other cases it may be related to mandates. For example, independent cost differences in how efficiently LEAs perform estimates for a mandate could be created in the activity. If available data suggests certain cases by our office or DOF. the latter situation, we recommend the Also Recommend Adjusting Block Grants for Legislature adjust block funding based on Future Cost Increases. Because prices for goods the rate claimed by districts performing the and services can increase from year to year, the activity most efficiently. state typically provides a COLA for most education programs. We recommend the Legislature apply • Number of LEAs Performing Activity. a COLA to the block grants whenever it applies a Often, very few LEAs submit initial COLA to other education programs. In 2014-15, mandate claims. This could be because providing a 0.86 percent COLA to the block some LEAs have not yet figured out how to grants (consistent with other programs) would track and document costs for the activity. cost $1.9 million for schools and $0.3 million for Therefore, the statewide cost estimate community colleges. prepared by CSM may not accurately reflect www.lao.ca.gov Legislative Analyst’s Office 11 AN LAO REPORT ASSESSMENT OF NEW MANDATES In this section, we assess and make Fees) from its budget proposal and intentionally recommendations on how to treat new mandates. omitted two mandates (Parental Involvement and In making our recommendations, we provide Williams Case Implementation) because CSM had guidance to the Legislature on how to adjust not adopted cost estimates for them prior to the block grant funding for mandates we recommend release of the Governor’s budget. Figure 3 provides retaining. summary information for each mandate and the CSM Recently Approved Cost Estimates for Governor’s proposed treatment. Seven New Mandates. The CSM recently approved Criteria for Assessing New Mandates. In statewide cost estimates for seven new mandates. assessing each mandate, we focus primarily on Six of these mandates apply to schools while two whether the mandate serves a compelling state apply to community colleges. (One mandate applies purpose. In addition, we consider whether the to both.) The test claims for most of these mandates mandate produces positive results and whether were filed over ten years ago but CSM only recently less costly alternatives exist. For mandates we completed them due to a backlog of test claims. recommend retaining, we estimate associated costs Because LEAs at that time were allowed to submit using the process described earlier in this report. test claims for requirements enacted any time after We do not recommend making adjustments to the 1975, some of the test claims relate to requirements block grants when the estimated statewide costs for the state enacted long before the test claim was a mandate are less than $1 million annually. filed. For instance, the Parental Involvement P i P arenTal nvolvemenT rograms mandate includes a requirement enacted in 1990. Governor’s Budget Addresses Four of the A Few State-Required Parental Involvement Seven New Mandates. Of the seven new mandates, Activities Found to Be Reimbursable Mandates. the Governor proposes to add three to the block Drawing on research suggesting parental grant and repeal one. The administration indicates involvement can have positive effects on student it inadvertently omitted one mandate (Developer achievement, the Legislature enacted several Figure 3 New Mandates New Mandates With Cost Estimate Adopted by CSM as of February 1, 2014 Start Date of CSM Estimated Governor’s Proposed Reimbursement Annual Cost Governor’s Change in Mandatea Period Statewide Proposal Block Grant Funding Parental Involvement Program 7/1/2002 $125,268 None — Williams Case Implementation 9/29/2004 106,183 None — Uniform Complaint Procedures 7/1/2002 34,751 Add to block grant $0 Developer Fees 7/1/2001 34,209 None — Public Contracts 7/1/2001 32,932 Add to block grant 0 Community College Construction 7/1/2001 22,519 Repeal — Charter Schools IV 1/1/2003 4,261 Add to block grant 0 a Community College Construction applies only to community colleges. Public Contracts applies to both schools and community colleges. All other mandates apply only to schools. CSM = Commission on State Mandates. 12 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT laws relating to parental involvement beginning to notify parents who speak a primary in 1990. Though these laws require schools to language other than English spoken by at undertake a number of activities related to parental least 15 percent of the district’s families. involvement, CSM determined that only a subset Schools do not have to notify parents of these activities are reimbursable mandates. This whose home language is English or parents is because some activities already are required who speak a language spoken by less than under federal law whereas other activities are only 15 percent of families in the district. required for schools that participate in voluntary New Local Accountability System Includes programs. The following requirements have been Parental Involvement. As part of the new found to be new state mandates. accountability system the state adopted last year, a • Adopting a Parental Involvement Policy. district must adopt a Local Control Accountability Schools are required to adopt a parental Plan (LCAP) every three years and update the plan involvement policy that describes the annually. The LCAP process has two requirements manner in which parents may “share related to parental involvement. the responsibility for continuing the • Parental Involvement One of State intellectual, physical, emotional, and social Priority Areas for LCAPs. Each LCAP development and well-being of pupils.” The must address the district’s goals and policy is to address a range of issues—from proposed actions in the priority area of the school describing its curriculum to parental involvement. parents monitoring attendance of their children. Schools must consult with parents • LCAPs Require Parent Consultation. when developing the policy and only are Districts are required to submit their required to adopt a policy once. proposed LCAP to a parent advisory committee and, in some cases, a separate • Allowing Parents to Observe Classes committee of parents of English learners. and Test Questions. Schools must allow The committees can comment on the parents to observe their child’s classroom proposed plan, and the district must or school activity upon written request. respond in writing. Districts also must Schools also must allow parents to inspect solicit public feedback and hold at least two test questions, except for standardized test public hearings to discuss and adopt (or questions. update) their LCAPs. • Notifying Certain Parents of Rights. LCAP Process Has Advantages Over Existing Schools are required to notify certain Parental Involvement Mandates. The LCAP parents who do not speak English as process has several advantages over current state their primary language of certain rights, mandates relating to parental involvement policies, including the right to observe their child’s parent rights, and notification of parent rights. classroom, meet with their child’s teacher, • Parental Involvement Policy. Because volunteer at school, access their child’s the LCAP process requires districts to school records, and participate in school describe actions they will take to promote committees. Schools are only required parental involvement, these plans serve a www.lao.ca.gov Legislative Analyst’s Office 13 AN LAO REPORT similar function as parental involvement child’s education (for example, a district policies. Compared to state requirements website or school newsletter). for adopting a parental involvement Recommend Repealing Parental Involvement policy, LCAPs, however, require districts Mandates. For these reasons, we recommend the to be more specific about their goals, Legislature repeal all three components of the their proposed actions, and how they will parental involvement mandate. measure progress. As noted above, the LCAP process also requires districts to W illiams c ase i mPlemenTaTion submit their proposed plan to a parent Package of Legislation Enacted Relating to advisory committee and, in some cases, a Teacher Assignments, Instructional Materials, separate committee of parents of English and School Facilities. From 2004 to 2007, the learners, respond to any issues raised by Legislature passed a series of laws that created new the committees, and hold at least two requirements for school districts and COEs relating public hearings to solicit feedback on to teacher assignment, instructional materials, and the LCAP. Although the state requires school facilities. These laws established statewide districts to consult parents when adopting standards in these three areas, provided funding to a parental involvement policy, districts school districts and COEs to remedy inadequacies are not required to form specific parent in these areas, and created mechanisms to enforce committees to review the policy or respond the new standards. These laws were enacted in to parent concerns. Moreover, districts response to Williams v. State of California, in are required to update LCAPs annually, which a coalition of advocacy groups that alleged whereas the state does not require districts the state was responsible for addressing teacher to update state-mandated parental misassignments, lack of textbooks, and poorly involvement policies. maintained facilities in certain low-performing schools. The CSM later determined some of the new • Parent Rights. Districts now must identify requirements were state mandates. specific actions in their LCAPs to promote Five Activities Found to Be State Mandates. parental involvement. This process could The CSM determined that the following five be used by districts and parents to decide activities relating to the Williams legislation are which parental involvement activities are new state mandates. (The CSM determined certain the most effective way to promote parent other parts of the Williams statutes were not state engagement. For instance, if parents believe mandates—either because state grant funding that being allowed to observe classrooms was provided to cover associated costs or the new or inspect test questions is important, they requirements were associated with voluntary could use the LCAP process to request programs.) districts to include these activities in their LCAPs. • Complaint Process. The Williams legislation requires schools to address • Notification of Parent Rights. The LCAP complaints in three areas: teacher process also could enable districts to decide misassignments and vacancies, the on the most effective way to notify parents inadequate supply of instructional of the ways they can participate in their 14 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT materials, and school facilities issues that financial statements are accurate. The raise health or safety concerns for students COEs are required to review certain or staff. Schools are required to remedy issues raised in the district’s audit (“audit the complaints within 30 working days; exceptions”) and determine whether those report data on the nature and resolution issues have been addressed by the district. of complaints to the school board and The Williams legislation requires COEs COE on a quarterly basis; and post notices to review audit exceptions related to the in every classroom informing parents, Williams areas. students, and staff about the complaint • Reporting on Fiscal Health. The Williams process. statutes require districts to provide the • School Accountability Report Card COE with a copy of a “study, report, (SARC) Requirements. The Williams evaluation, or audit” commissioned by the legislation requires districts and COEs Superintendent of Public Instruction, state to report the following additional control agencies, or a fiscal crisis team that information on the SARC: (1) data on contains evidence that the district is in teacher misassignments and teacher fiscal distress. vacancies, (2) the availability of textbooks Williams Purposes Now Can Be Achieved and instructional materials, and (3) needed Through Other Means. As Figure 4 shows (see next maintenance to school facilities. (Prior to page), most of the Williams requirements now can the Williams legislation, school districts be met through other means. Thus, we recommend and COEs already were required to repealing most of the associated mandated annually produce a SARC for each of their activities, with the exception of Williams-related schools and make them available to the complaints. We recommend the Legislature create public. A SARC contains various pieces of one process for all complaints, as discussed further information relating to a school’s students, below. resources, and performance.) Retain Complaint Process but Merge With Existing Uniform Process. The Williams complaint • Compliance Audits. The Williams process appears to motivate school districts to legislation requires existing state respond to Williams-related concerns in a timely compliance audits to include additional manner. Survey data collected by the Williams information on (1) teacher misassignments, plaintiffs, for example, indicate the vast majority (2) whether the district has reported of related complaints are resolved by the school certain information on the adequacy of district. The state, however, already has a uniform instructional materials, and (3) the accuracy complaint process (UCP) that is intended to of information reported on the SARC. address all types of complaints. (As discussed • Review of Audit Exceptions. Under state later in this report, parts of the UCP also have law predating Williams, districts are been found to be state mandates.) Yet the existing required to hire an independent auditor Williams complaint process and UCP have different to conduct an annual audit of funds rules regarding notifying parents, processing and expenditures to ensure the district’s complaints, and reporting to other agencies. We www.lao.ca.gov Legislative Analyst’s Office 15 AN LAO REPORT Figure 4 Most Williams Requirements Now Duplicative of Other Requirements Activity Claimants Assessment Recommendation Administer new complaint School districts Unclear why Williams complaints Amend by process have different notification and consolidating with reporting procedures as well UCP (and improving as higher priority than all other UCP, as needed) complaints. Report additional information School districts, Unnecessary if LCAPs include Repeal on SARC COEs school-level data.a Add new elements to School districts Unnecessary if LCAPs include Repeal compliance audits school-level data.a Review district audit COEs Unnecessary because of other Repeal exceptions enforcement measures. Forward reports on fiscal School districts Unnecessary, as COEs already Repeal health to COEs have access to this information. a State law and regulations require school districts and COEs to report school-level data for teacher misassignments, availability of textbooks, and facility conditions. The LCAPs, however, have not yet been implemented, so the level of data districts and COEs in practice will provide is not yet clear. UCP = Uniform Complaint Process; SARC = School Accountability Report Card; COEs = county offices of education; and LCAP = Local Control Accountability Plan. recommend the Legislature revisit the UCP to see if school-level information in each of the three improvements are needed in the areas of notifying, Williams areas. These data could duplicate the now processing, and reporting. If the Legislature were mandated SARC reporting requirements. To the to decide that some of the Williams complaint extent duplication emerges, the Legislature could rules are better than the existing UCP rules, eliminate the SARC reporting requirements and then the Legislature could take the best of each associated SARC compliance audit requirements existing process and create one, new-and-improved in the three Williams areas. (Though state law and complaint process. As part of this redesign, the regulations relating to the LCAP overlap with these Legislature also could consider what types of particular SARC requirements, LCAPs have not yet complaints should get top priority (for example, been implemented and the Legislature may want Williams, antidiscrimination, or special education to monitor implementation of the LCAPs to ensure cases), as well as the time that should be allowed required school-level data are publicly provided and to process complaints (for example, 30 days for reviewed. To this end, the Legislature could request more straightforward complaints and 60 days the State Board of Education (SBE) to provide a for complaints that require more intensive status report regarding LCAP implementation investigation). during a spring budget hearing. Depending on New LCAP Process Addresses Two Williams future LCAP implementation, the Legislature could Requirements. The LCAP process requires revisit SARC reporting requirements.) districts to describe their goals and proposed Reviewing Audit Exceptions Unnecessary actions in the state priority areas known as basic Because of Other Enforcement Measures. services. This area requires districts to provide Although other components of the Williams 16 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT legislation are specifically tied to teachers, mandate discussed earlier.) Parents, students, textbooks, or facilities, annual financial audits employees, and community members can file are not directly related to these areas. Given the complaints on behalf of themselves or on behalf of state has eliminated categorical programs for another individual. instructional materials and provides no specific For Certain Types of Complaints, State funding related to teacher assignments, audit Requires Schools to Respond Using Specific exceptions are unlikely to be directly related to Process. For complaints related to certain whether a school districts is properly addressing categorical programs, discrimination, harassment, issues in the Williams areas. Moreover, the state and civil rights, the state requires schools to use already has several mechanisms—such as the its UCP to resolve the complaint. The state’s UCP complaint process and LCAPs—to help enforce establish the basic responsibilities of complainants, Williams requirements. Given these other schools, and the California Department of mechanisms are more directly related to the three Education (CDE) in resolving the issue. Schools major Williams areas, we recommend repealing are required to develop policies and procedures for this requirement. investigating and resolving complaints consistent Fiscal Health Reporting Requirement with the state’s UCP. Unnecessary Because COEs Already Have Access Virtually All UCP Activities, With the to District Financial Information. The state’s fiscal Exception of Investigations, Found to Be oversight system requires COEs to review a school Reimbursable Mandates. Most procedural district’s financial condition at various points activities required under the state’s UCP have been throughout the year and determine whether the found to be reimbursable mandates. However, district will be able to meet its financial obligations activities are reimbursable only when the complaint for the next two fiscal years. Given this oversight relates to: (1) free and reduced-priced school meals; process already requires COEs to have access to (2) adult education programs in citizenship and detailed school district financial information, English; (3) most special education activities; requiring districts to forward the same or related and (4) discrimination, with the exception of reports to COEs for Williams purposes does discrimination relating to age, sex, and disability. not appear to add value. Thus, we recommend (Reimbursement is not required when the repealing the reporting requirement. complaint involves discretionary programs, such as career technical education. Reimbursement also U c niForm omPlainT is not required when discrimination occurs on the P (c ) rocedUres omPlainTs basis of sex, age, or disability, as federal law already State Requires Schools to Address Certain requires districts to adopt policies to resolve Complaints. The state requires schools to respond these complaints.) The specific UCP reimbursable to certain types of complaints. In particular, activities are: schools are required to respond to complaints • Adopting Complaint Procedures and alleging violations of state law regarding certain Notifying the Public. State regulations educational programs, discrimination, harassment, require schools to (1) adopt policies and facilities, teacher misassignments, and instructional procedures regarding complaints, and materials. (Complaints related to these last three (2) notify various school groups, including areas are part of the Williams Case Implementation parents, of complaint procedures. Schools www.lao.ca.gov Legislative Analyst’s Office 17 AN LAO REPORT only are required to adopt policies and nature and extent of the investigation, procedures on a one-time basis and are a report of any action taken to resolve not required thereafter to review or update the complaint, and a copy of the school’s them. complaint procedures. Recommend Mixed Approach for Addressing • Providing Notice of Civil Remedies. UCP Mandates. As displayed in Figure 5, we State law requires schools to inform recommend the Legislature retain the requirements complainants of any alternative civil to adopt complaint procedures and provide notice remedies available to them, such as filing of civil remedies and add them to the block grant. a civil suit in court. The school also Based on initial claims, we believe adding these must make this information available by mandates to the block grant will result in minimal publication in appropriate informational cost. Thus, we recommend not increasing block material. grant funding. We recommend the Legislature • Referring Certain Complaints. State amend the two remaining UCP requirements regulations require schools to refer certain relating to referring complaints and forwarding complaints to state and federal agencies. information to the CDE. For example, schools are required to refer Recommend Maintaining Requirement to complaints regarding fraud to the CDE’s Adopt Complaint Policies for Accountability Division Director and Legal Office. Purposes. Requiring schools to adopt local policies and procedures ensures that complainants have • Forwarding Information for Appeals. a process by which they can file and resolve State regulations require schools to forward complaints, which helps hold districts accountable information about complaint appeals to for violations of state law. Moreover, notifying CDE. This includes the original complaint, parents and other school groups about these policies the school’s decision, a summary of the and procedures informs them of the steps they Figure 5 Recommend Retaining Some Portions of Uniform Complaint Procedures Mandate Activity Claimants Assessment Recommendation Adopt and publish complaint School districts, Requirement helps hold Retain procedures COEs schools accountable. Provide notice of civil School districts, Requirement helps hold Retain remedies to complainants COEs schools accountable. Refer certain complaints School districts, Complainant better Amend regulations to refer to other state and federal COEs suited to work directly complainant (rather than agencies with other agencies. complaint itself) to other agencies Forward information for School districts, Stronger incentive Amend regulations to indicate that appeals to CDE COEs needed to ensure districts withholding requested information and COEs provide will be viewed as a finding in favor requested information. of the complainant COEs = county offices of education and CDE = California Department of Education. 18 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT can take to resolve any potential complaints and refusal to comply with requests for information hold districts accountable. For these reasons, we regarding appeals to be used as a finding in favor of recommend the Legislature add this requirement to the complainant. This would eliminate the mandate the mandate block grant. yet provide an even stronger incentive for schools Recommend Maintaining Requirement to comply with requests for information. to Provide Notice of Civil Remedies for U c niForm omPlainT Accountability Purposes. Providing complainants P (c ) rocedUres omPliance information regarding alternate means of complaint resolution provides another way of holding schools Antidiscrimination compliance requirements accountable for violations of state law. By providing are included in the UCP mandate. As they do not information regarding possible civil remedies, involve complaint procedures, however, we analyze complainants can determine which process would these issues separately below. best fit the complaint and ensure resolution. Schools Required to Comply With State Consequently, we recommend the Legislature add and Federal Antidiscrimination Laws. State this requirement to the mandate block grant. and federal laws require schools to perform two Recommend Streamlining Referral Process to activities to demonstrate compliance with state and Other State and Federal Agencies. We recommend federal antidiscrimination laws as they pertain to the Legislature direct CDE to amend its regulations education programs. First, schools must provide a to require schools to refer complainants (rather statement of intent to CDE that they will comply than the actual complaint) to the proper agency with antidiscrimination laws. Second, as directed when a complaint does not fall under their by CDE, schools must file descriptions of how they jurisdiction. Schools can help complainants by complied with antidiscrimination laws. informing them of the proper agency in which to Compliance Activities Exceeding Federal file their compliant. Complainants, however, are Law Found to Be State Mandates. California’s better positioned to file their compliant with the antidiscrimination compliance requirements other agency, as they have the greatest interest in include two areas of discrimination for the seeking quick resolution. purposes of education programs that are not Recommend Creating Stronger Incentive to included in federal law. Specifically, state Forward Information Relating to Appeals. In the antidiscrimination compliance requirements event of an appeal, schools have some incentive to encompass the areas of religion and sexual forward complaint information to CDE to ensure orientation. Because statements of intent and their side of the case is heard. There may be cases, reports of compliance regarding religion and sexual however, where a school believes it could benefit by orientation exceed federal law, these activities are withholding information regarding a complaint. found to be state mandates. (For discrimination For example, a school may not want to provide a regarding race, color, national origin, sex, disability, summary of actions taken to resolve the complaint and age, federal and state antidiscrimination if it did not follow its own policies and procedures. compliance laws are the same and therefore Instead of maintaining the requirement to forward statements of intent and reports of compliance in complaint information in the event of an appeal, these areas are not considered state mandates.) however, we recommend the Legislature direct Add Statement-of-Intent Requirement to CDE to amend regulations to allow a school’s Block Grant. Requiring schools to file statements of www.lao.ca.gov Legislative Analyst’s Office 19 AN LAO REPORT intent to comply with antidiscrimination law helps developer fee on a new housing project to pay for the the state ensure schools are aware of associated costs of expanding water and sewer lines. legal responsibilities and requirements. Moreover, State Has Requirements Regarding Developer minimal additional workload likely exists to Fees and School Overcrowding. If a school district provide these statements for the areas where state determines that overcrowding is interfering with law exceeds federal law. This is because federal law its educational programs and cannot be mitigated requires schools to provide statements of intent to by the district, then state law requires the school comply with all federal antidiscrimination laws in district to notify the city or county in which it is a single one-page document, and state law requires located. The city or county then is prohibited from schools to include statements of intent to comply approving residential development projects in with all state antidiscrimination laws within areas affected by school overcrowding. However, the same one-page document. Consequently, we a new development may be approved if the city recommend adding this requirement to the block or county either (1) requires the developer to pay grant but not increasing block grant funding. fees or dedicate land for temporary classroom Amend Compliance Report Mandate to facilities or (2) makes findings that overriding Provide Clearer Guidance. To date, CDE has fiscal, economic, social, or environmental factors not required schools to report on how they are justify the approval of a residential development. complying with antidiscrimination laws. (The If the city or county chooses to levy a developer fee department states that it is unclear on exactly under these circumstances, state law requires the what schools are to report and how the reports school district to report certain information to the are to be used.) We recommend the Legislature city and county regarding the fee revenue it receives provide greater clarity in this area by requiring and its spending on facilities. schools to submit compliance reports to CDE if Notification and Reporting Activities Found evidence of systemic discrimination emerges. For to Be Reimbursable Mandates. The CSM found the example, CDE could require compliance reports requirement that school districts notify cities and from a school that loses a certain number of counties about overcrowding to be a reimbursable discrimination-related complaint appeals (or the state mandate. The CSM also found the reporting number of unfavorable verdicts exceeds a certain activities that districts must undertake if a fee is threshold of the school’s enrollment). If evidence levied to be reimbursable state mandates. of systemic discrimination emerges, we further Mandate Unnecessary Since Districts Have recommend requiring CDE to inform the Governor an Incentive to Provide Notifications. School and Legislature. districts are overseen by locally elected governing bodies with responsibility to ensure effective d F eveloPer ees educational services are being delivered in the Local Governments Authorized to Levy Fees district. School districts, therefore, already have on New Developments. State law authorizes local a strong incentive at the local level to address the governments, including school districts, to charge effects of overcrowding, including notifying their real estate developers a levy known as a developer city or county about overcrowding in order to have fee. Developer fees are intended to offset costs to the them levy developer fees. For this reason, the state local government that result from new construction. requirement for school districts to provide this For example, a city or county could impose a notification is unnecessary. 20 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT Recommend Repealing Mandate. Given Certain Activities Associated With school districts already have a strong incentive to Contracting Out Found to Be Reimbursable notify their city or county about overcrowding, we Mandates. In June 2003, Clovis Unified School recommend the Legislature repeal the provisions of District and Santa Monica Community College state law requiring them to perform this activity. In District filed a test claim with CSM alleging doing so, the reporting activities would no longer that a number of statutory provisions related to be considered reimbursable state mandates because contracting out constitute state-reimbursable they would only occur if a school district chose to mandates for districts. (These districts contended notify the city or county about overcrowding. that these provisions applied to COEs too.) In May 2012, CSM determined that the requirement to P c Ublic onTracTs contract out for repairs and maintenance does not, Statute Requires Schools and Community in itself, constitute a state-reimbursable mandate. Colleges Under Specified Circumstances to This is because school and community college Contract for Repair and Maintenance Projects. districts have been statutorily required to contract State law requires schools and community for repairs and maintenance since before 1975. (As colleges to repair and maintain school property. discussed earlier, requirements that predate 1975 Statute generally provides them with discretion do not qualify as state-reimbursable mandates.) to undertake repair and maintenance projects The CSM identified, however, more than a dozen themselves (using district staff) or to contract with reimbursable activities that are triggered when a private entity for the work. Public Contract Code, districts are statutorily required to contract for however, identifies a limited set of circumstances repairs and maintenance. These reimbursable in which schools and community colleges must activities include: contract for repairs and maintenance. These • Specifying in any bid notice the type conditions generally depend on the number of of license that contractors must hold to students served by a district and the cost and perform the repair or maintenance work. number of labor hours needed to complete the project. For example: • Including a clause in contracts regarding identification of hazardous waste or • A school district with fewer than 35,000 other potentially harmful conditions if ADA generally must contract out for discovered while digging trenches or other repairs and painting jobs if the project both excavations that extend deeper than four (1) costs more than $15,000 and (2) requires feet below the surface. more than 350 labor hours. • After awarding a contract, reviewing each • A school district with more than 35,000 payment request from a contractor “as soon ADA generally must contract out for as practicable” to determine if the amount repairs and painting jobs if the project both of the payment request is accurate. (1) costs more than $15,000 and (2) requires more than 750 labor hours. • Returning to the contractor within Statute also spells out similar conditions under seven days any payment requests that are which community college districts must contract incorrect. for repairs and maintenance. www.lao.ca.gov Legislative Analyst’s Office 21 AN LAO REPORT • For community colleges only, undertaking • The current enrollment capacity at the efforts designed to increase participation district. of underrepresented contractors in district • The current capacity of the district repair activities (such as creating a list of office, libraries, and certain other district female contractors who may be qualified to facilities. bid on projects). The CSM found that COEs are not eligible for • An inventory of district facilities and land. reimbursement because statute gives them broad • Enrollment projections for the district. discretion to undertake repair and maintenance projects either on their own or using a • The extent to which plans for future contractor. academic and student-service programs Recommend Repealing the Mandate. We could affect estimated construction needs. recommend the Legislature repeal the Public • An estimate of monies the district has Contracts mandate. Schools’ and community available for the purposes of matching state colleges’ capacity to perform repair and funding for capital outlay projects. maintenance projects “in house” can vary from district to district. Instead of a uniform CSM Approves Part of Mandate Claim. In requirement, the Legislature could amend statute June 2003, Santa Monica Community College to allow schools and community colleges to decide District filed a claim with CSM alleging that for themselves the situations in which they conduct the statutorily required capital construction repair and maintenance activities either on their plans constituted a state-reimbursable mandate. own or by contracting with a private entity. Such In October 2011, CSM determined that the an approach would be consistent with how the requirement for districts to prepare and submit a state treats COEs, which are given wide discretion five-year plan does not, in itself, constitute a state- to decide on how best to undertake repair and reimbursable mandate. This is because five-year maintenance projects. plans have been required by statute since before 1975. (As mentioned earlier, requirements that c c c ommUniTy ollege onsTrUcTion predate 1975 do not qualify as state-reimbursable Community Colleges Must Prepare and mandates.) The CSM found that four of the six Regularly Review Capital Construction Plans. required content areas, however, do constitute state- Under current law, each community college district reimbursable mandates for districts. Specifically, is required to prepare and submit to the statewide these requirements include all, or parts, of the last Board of Governors (BOG) a five-year plan of its four content areas noted above. capital construction needs. Each district must Recommend Repealing Mandate. We regularly review its plan and annually submit recommend the Legislature repeal the Community any updates or changes to the BOG. Districts College Construction mandate. Instead of generally are permitted to include in their plans requiring districts to include the above content in any information they deem pertinent. Statute their five-year plans, the Legislature could make identifies six specific content areas, however, that the four specific mandated content areas voluntary. must be included. Given that it is standard information (and required 22 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT by the California Community Colleges Chancellor’s 2002, state law did not impose specific restrictions Office as a condition of a district’s participation on the location of charter school facilities. A few in the state’s capital outlay bond program), schools used this flexibility to operate satellite community college districts likely would continue facilities far from their authorizers. In response, to include and update this content in their plans. the Legislature passed Chapter 1058, Statutes of As such, the Legislature could achieve the overall 2002 (AB 1994, Reyes). This law requires a charter policy objective without the need for a mandate. school to describe the location of facilities in its proposed charter, operate facilities only within c s iv harTer chools the geographic jurisdiction of its authorizer, and, Charter Schools Approved to Operate and if the charter already has been approved, obtain Monitored by Authorizers. Charter schools are permission from its authorizer before opening publicly funded schools that are exempt from many new facilities. In addition, the law specifically state laws and operate under charters that describe requires authorizers to hold public meetings to their educational programs. Before opening, a review requests to open new facilities. The law charter school must submit its proposed charter also allows for the creation of charter schools to an authorizer, usually the school district within with the authority to be located throughout a which the charter school will be located. The county (“countywide charter schools”), provided authorizer determines if the proposed charter is the schools initially are approved by a COE. As of consistent with sound educational practice and 2013-14, the state has about 35 countywide charter adequately describes the school’s academic goals, schools serving more than 16,000 students. governance structure, disciplinary policy, safety 2002 Legislation Includes a Few Other procedures, and audit process, among other things. Requirements. Separate from addressing concerns If the charter is approved, the authorizer assumes over charter school locations, Chapter 1058 requires the responsibility of monitoring the school for all charter schools to submit annual financial data compliance with the terms of its charter. to their authorizers in a standard format. The Many Charter School Oversight Activities authorizers are required to forward this data to Already Are Reimbursable Mandates. The the appropriate COE to verify their mathematical existing Charter Schools I-III mandates reimburse accuracy. The COE then forwards the data to CDE. authorizers for reviewing proposed charters, Chapter 1058 also requires each proposed charter holding associated public hearings, and monitoring to include a plan to be followed if the school closes charter schools after approval. To defray and a plan for notifying the parents of high school monitoring costs, the state allows authorizers to students whether courses taken at the charter collect an oversight fee from their charter schools. school are accredited and whether they meet This fee generally is capped at the actual cost of college admission requirements (such as through monitoring each charter school or 1 percent of each qualification for the “A-G” course requirements). charter school’s general-purpose state funding, Several New Approval and Oversight whichever is lower. The Charter Schools I-III Activities Found to Be Reimbursable Mandates. mandates currently are included in the schools Several of the changes contained in Chapter 1058 block grant. have been found to be reimbursable mandates. State Revises Procedures for Establishing These activities make up the Charter Schools IV and Operating Charter Schools in 2002. Prior to mandate, as summarized below. www.lao.ca.gov Legislative Analyst’s Office 23 AN LAO REPORT • Reviewing Proposed Countywide Charter Activities. As shown in Figure 6, we recommend Schools. The COEs that review proposed the Legislature retain four components of the countywide charter schools may claim Charter Schools IV mandate, adding them to the reimbursement for the activities associated schools mandates block grant. We recommend with this review. The reimbursable making no adjustments to schools block grant activities are similar to those performed funding, as we estimate the costs of the four during the review of noncountywide activities are very minor based on initial claims charter schools. data. We recommend repealing the three remaining parts of the Charter Schools IV mandate. Below, we • Receiving Financial Information. describe each of these recommendations in greater Authorizers can claim reimbursement for detail. receiving financial data from the charter Recommend Retaining Review of Countywide schools they authorize and filing this data Charter Schools So These Schools Can Open. with the appropriate COE. (Authorizers Countywide charter schools operate a variety of are allowed to include this cost within specialized academic programs, including state and their oversight fee.) The COEs can claim federal job training programs, language immersion reimbursement for filing the data with programs, and early college high schools. This CDE. instruction is often provided at sites throughout a county. Without countywide charter schools, the • Reviewing Additional Information in alternative would be to seek separate authorization Proposed Charters. Authorizers can from several school districts. This alternative would claim reimbursement for reviewing (1) the likely (1) hinder the ability of the charter schools to procedures to be used if the charter school deliver specialized programs and (2) increase costs, closes, (2) the description of where the as the work of reviewing petitions for these charter charter school intends to be located, and schools would be transferred to school districts. For (3) the method of notifying parents about these reasons, we recommend the Legislature retain the accreditation and A-G status of high this mandate. school courses. Recommend Retaining Requirement to • Holding Open Meetings to Review Receive Financial Data for Accountability Requests for Additional Sites. Authorizers Purposes. The financial data collected by can claim reimbursement for the cost of authorizers and COEs and reported to the state is holding a public meeting to consider the the only consistent source of statewide information request by an existing charter school to showing how charter schools spend public open an additional site. funds. This data is used for a variety of purposes, including (1) meeting data tracking requirements • Verifying Financial Information. The required by federal grants, (2) allowing researchers COEs can claim reimbursement for and members of the public to identify local verifying the mathematical accuracy of spending patterns, and (3) helping the Legislature charter school financial data. understand the effects of various policy decisions. Recommend Adding Oversight Activities to In addition, having the information flow from Schools Block Grant While Repealing Redundant charter schools to the state through authorizers 24 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT and COEs takes advantage of the existing reporting program. For example, if the charter school relationships between these entities. For these proposes to serve a specific student population, reasons, we recommend the Legislature retain these the authorizer would want to determine if the mandates. (Given that CDE intends to implement proposed school sites are located in areas with new accounting software for all schools in 2015-16, high concentrations of these students. Given these we recommend the Legislature revisit this mandate fiscal and academic issues, we recommend the next year to see if some of the associated activities Legislature retain these two mandates. could be streamlined. With the new accounting Recommend Repealing Overlapping system, charter schools may be able to transmit Parental Notification Requirement. The parental their data directly to the state without authorizers notification requirement for high school courses or COEs having to coordinate the data transfers.) overlaps with several activities required by LCAPs. Recommend Retaining Review of Specifically, LCAPs require schools to describe and Closure Procedures and School Locations for set goals related to (1) plans to promote parental Accountability Purposes. Having an orderly involvement in local decision-making and (2) the closure procedure reviewed in advance helps ensure number of students taking A-G approved courses. that financial assets and student academic records (All schools offering A-G courses also must be are treated appropriately in the event of a closure. accredited.) These goals themselves are developed In addition, reviewing the proposed locations of in consultation with parents, among other local charter school sites helps an authorizer determine groups. Given the public nature of the LCAP, the if the number and location of sites are justified parental notification procedure contained in the and well aligned with a charter school’s academic Charter Schools IV mandate appears unnecessary. Figure 6 Recommend Retaining Some Portions of Charter Schools IV Mandate Activity Claimants Assessment Recommendation Review requests to establish COEs Necessary for countywide charter Retain countywide charter schools schools to open. Receive and file financial Authorizers,a Provides financial data about charter Retain statements COEs schools to state and the public. Review closure procedures for Authorizers Helps minimize negative fiscal and Retain proposed charter schools academic effects of closure. Review operating location of Authorizers Awareness of proposed location Retain proposed charter schools essential for oversight. Review proposed parental Authorizers Activity overlaps with similar LCAP Repeal notification procedures requirements. Hold an open meeting to Authorizers Open meetings would occur without Repeal consider the request for an this specific mandate. additional school site Verify the mathematical COEs Obsolete with computerized Repeal accuracy of financial data accounting system. a Refers to the entity authorizing the charter schools—in most cases a school district. COEs = county offices of education and LCAP = Local Control and Accountability Plan. www.lao.ca.gov Legislative Analyst’s Office 25 AN LAO REPORT In addition, this very specific mandate could draw meetings mandate. (Proposition 30, adopted in attention away from the more vital components of 2012, specifies that the state no longer is required charter review, including the proposed academic to reimburse local governments for the costs of program and the proposed budget. holding open meetings.) Recommend Repealing Redundant Open Recommend Repealing Obsolete Meetings Requirement. The Charter Schools IV Mathematical Verification Requirement. The open meetings mandate is unnecessary because mandate for COEs to verify the “mathematical existing law (1) deems any request for an additional accuracy” of charter school financial data is facility to be a “material revision” of a school’s modeled on existing law requiring COEs to charter; (2) requires all material revisions to be perform a similar verification for school districts. approved by the authority granting the charter The Legislature enacted this law in 1988, prior (a local governing board, or, in a few cases, SBE); to the statewide adoption of a computerized and (3) requires local governing boards (as well as accounting system. The current accounting the SBE) to make decisions only in open meetings system and its related software—now mandatory with notice to the public provided in advance of for all LEAs to use—automatically verifies the the meetings. (These open meeting requirements mathematical accuracy of LEA financial data before are contained in the Ralph M. Brown Act and the the submission to a COE. Given a more efficient Bagley-Keene Open Meeting Act as they apply, way now exists to ensure mathematical accuracy, respectively, to local governing boards and the COEs no longer need to perform the function. For SBE.) That is, open meetings would occur in this reason, we recommend the Legislature repeal any case without the Charter Schools IV open this mandate. 26 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT SUMMARY OF RECOMMENDATIONS Mandate Reimbursement Process 9 Reasonable Reimbursement Methodology (RRM). Repeal process overseen by the Commission on State Mandates to create RRMs for education mandates because the education mandates block grants serve the same function through the regular budget process. 9 Funding New Mandates. When adding mandates to the education mandates block grants, adjust funding based on a variety of factors, including: (1) the variation in initial mandate claims, (2) the number of local educational agencies (LEAs) performing the activity, and (3) the likelihood initial claims may be overstated. In select cases, request our office or the Department of Finance to provide independent cost estimates. 9 Funding Cost Increases. Provide a cost-of-living adjustment (COLA) to block grants similar to the COLA provided to other education programs. For 2014-15, provide a 0.86 percent COLA to the block grants for schools ($1.9 million) and community colleges ($0.3 million). New Mandates 9 Parental Involvement Programs. Repeal mandate since new Local Control Accountability Plans (LCAPs) include parental involvement as a state priority area and provide greater opportunities for parental involvement. 9 Williams Case Implementation. Repeal most mandated activities since their goals can be fulfilled through other mechanisms, including LCAPs. Merge Williams complaint procedures with potentially improved Uniform Complaint Procedures (UCP). 9 UCP (Complaints). Retain two requirements that help hold schools accountable for certain law violations. Modify two requirements to improve process. 9 UCP (Compliance). Retain one requirement that ensures schools are aware of certain legal responsibilities. Modify one requirement to provide more specificity as to when compliance reports need to be submitted to the California Department of Education. 9 Developer Fees. Repeal mandate since schools already have a strong incentive to perform the mandated activity. 9 Public Contracts. Repeal mandate since school districts and community colleges are better positioned to determine if contracting out is needed. 9 Community College Construction. Repeal mandate since community colleges have strong incentive to provide information voluntarily. 9 Charter Schools IV. Retain four activities related to oversight and fiscal accountability. Repeal two activities redundant with other state laws. Repeal one obsolete activity. www.lao.ca.gov Legislative Analyst’s Office 27 AN LAO REPORT Contact Information Paul Golaszewski Mandate Reimbursement Process 319-8341 Paul.Golaszewski@lao.ca.gov Mandate Block Grants Developer Fees Jameel Naqvi Parental Involvement Programs 319-8331 Jameel.Naqvi@lao.ca.gov Williams Case Implementation Carolyn Chu Uniform Complaint Procedures (Complaints) 319-8326 Carolyn.Chu@lao.ca.gov Uniform Complaint Procedures (Compliance) Paul Steenhausen Public Contracts 319-8324 Paul.Steenhausen@lao.ca.gov Community College Construction Kenneth Kapphahn Charter Schools IV 319-8339 Kenneth.Kapphahn@lao.ca.gov LAO Publications This report was coordinated by Paul Golaszewski and reviewed by Jennifer Kuhn. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 28 Legislative Analyst’s Office www.lao.ca.gov