Increasing Transparency of County Office of Education Spending

AN LAO REPORT Increasing Transparency of County Office of Education Spending GABRIEL PETEK | LEGISLATIVE ANALYST | MARCH 2024 SUMMARY County Offices of Education (COEs) Have Two Distinct Missions. COEs provide direct instruction to students in juvenile court and county community schools. These schools serve students who are placed in county juvenile facilities, on probation, referred by a probation department, or mandatorily expelled from their school district. COEs also provide oversight and support to school districts in their county. Some of these activities are required by law, while others are optional and vary across the state. COEs receive state funding primarily through the Local Control Funding Formula (LCFF). Similar to COEs’ two-part mission, the LCFF has two main components—an alternative education grant based on the number of students attending juvenile court and county community schools and an operations grant based on the number of school districts and number of students in the county. COEs generally have flexibility to use their LCFF funding from either part of the formula for any purpose. COEs Must Adopt Local Control and Accountability Plans (LCAPs). To provide transparency regarding how LCFF funding is spent, COEs must annually adopt LCAPs for their spending on juvenile court and county community schools. LCAPs, must include goals related to several state priority areas and specify actions COEs will take to meet these goals. COEs also must include information demonstrating that they are increasing or improving services for English learners (ELs), low-income students, and foster youth. State Law Requires Review of COE Plans. Chapter 48 of 2023 (SB 114, Committee on Budget and Fiscal Review) requires our office to make recommendations to change the COE LCAP or require alternative reporting requirements outside of the LCAP. The recommendations are primarily intended to increase transparency of COE operations and activities. Recommend an Annual Report That Describes Major COE Activities. Existing COE budget data does not provide helpful information on how COEs support school districts and students. COE budgets often include significant amounts of revenue for which COEs simply pass through funding to school districts and other local governments. These pass-throughs make it more difficult to understand what variation in funding and spending is due to a COE’s specific role in the county. To better understand each COE’s role, we recommend an annual report that includes a narrative of the major activities and services COEs conduct, allowing local partners and the state to understand the key work COEs do to support school districts and students. Recommend Several Changes to LCAP. We find several issues with current LCAPs. In particular, some spending information can be difficult to interpret, focusing on increases in services for specific student groups is arbitrary given the COE student population, and some state-required metrics are not particularly relevant for assessing COE-run programs. We recommend a variety of changes to LCAPs that would make spending information easier to interpret, allow state and local partners to better understand existing programs and services to students, streamline certain aspects of the LCAP, and use metrics for COEs that would be a better indication of performance in COE-run schools. Recommend Expenditure Report on Operations Grant Funding. The LCFF operations grant has no reporting requirements and is unrestricted, which means the state knows very little about how these funds are spent. We recommend COEs develop a report specifically on how the LCFF operations grant was spent. The report should disaggregate spending into three categories: (1) oversight and support to school districts, (2) juvenile court and county community schools, and (3) direct services to students not enrolled in juvenile court and community schools. The report should also be in a format that is comparable across the state. www.lao.ca.gov 1 AN LAO REPORT INTRODUCTION COEs Have Two Distinct Missions. COEs This included increases to rates in both provide direct instruction to students in juvenile components of the formula, new minimum grant court and county community schools. These amounts for COEs that operate juvenile court and schools serve students placed in county juvenile county community schools, and an attendance facilities, as well as students who are on probation, policy designed to cushion COEs from declines in referred by a probation department, or mandatorily attendance and reduce year-to-year fluctuations expelled from their school district. In addition to in funding. In addition, the state created a new serving these specific students, COEs provide a student support and enrichment block grant for range of oversight and support to school districts students enrolled in juvenile court and county in their county. Some of these activities, such as community schools. The 2023-24 budget package fiscal and academic oversight, are required by also included several state actions related to state law. Many other activities COEs conduct are juvenile court and county community schools. optional, with the specific activities conducted by Most notably, the budget package required the COEs varying significantly across the state. COEs California Department of Education (CDE) to begin receive most of their state funding for activities reporting certain access and outcome data for aligned with these missions through the LCFF. juvenile court and county community schools and The formula includes two components intended to contract for an independent evaluation of these align with COEs’ two-part mission, although COEs schools. The department must provide a report to generally have flexibility to use their LCFF funding the Legislature and administration regarding this from either part of the formula for any purpose. evaluation by November 1, 2025. COEs Must Adopt LCAPs. To provide State Law Requires Report on Transparency transparency regarding how LCFF funding is of COE LCAPs. Chapter 48 requires our office spent, COEs are required to annually adopt LCAPs to recommend changes to the LCAP for COEs for their spending on juvenile court and county or, to the extent feasible, recommendations for community schools. In their LCAPs, COEs must alternative reporting requirements outside of the set goals related to several state priority areas and LCAP. The recommendations are to (1) increase specify actions they will take to meet these goals. transparency of COE operations and programs, COEs also must include information demonstrating (2) provide methods to shorten and simplify that they are increasing or improving services for the LCAP, (3) increase transparency of COE ELs, low-income students, and foster youth. responsibilities and activities, (4) identify methods State Recently Enacted COE Funding to display all funds apportioned to COEs, and Increases and New Reporting for COE-Run (5) track spending increases and their impact on Programs. The 2022-23 and 2023-24 budget student outcomes. This report responds to the plans included increases to the COE LCFF beyond statutory requirement. the statutory cost-of-living adjustment (COLA). BACKGROUND Overview of COEs elected by voters in their counties or appointed by their county’s board of education. The Constitution State Constitution Establishes Role of authorizes voters to elect these county boards County Superintendents in Schools. The State of education. State law requires these boards to Constitution establishes county superintendents consist of five or seven members representing of schools. County superintendents are either 2 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT different areas of the county. Currently, all but five The cumulative number of students served in county superintendents are elected rather than court schools throughout the year is much higher, appointed by the boards. County superintendents as students often attend these schools for short and their staff are commonly referred to as periods of time while they await trial—a few days COEs. County superintendents manage the daily to a few weeks in many cases. For example, in operations of these COEs. 2022-23, roughly 2,200 students were enrolled County Boards of Education Have Certain across all juvenile court schools on census day Constitutional and Statutory Responsibilities. (the first Wednesday of October) compared with The Constitution gives county boards of education roughly 12,400 students cumulatively enrolled authority to set their county superintendent’s throughout the school year (about five and a half salary and state law tasks them with approving times census day enrollment). annual COE operating budgets. State law further COEs Also Typically Operate County tasks county boards of education with approving Community Schools. State law designates COEs certain academic plans developed by the COE. as a provider of education for students who are County boards of education also effectively serve on probation, referred by a probation department, as an appellant body, hearing disputes among local or mandatorily expelled from their school district. groups that have been unable to be resolved at the (State law requires students to be expelled if district level. For example, a group can appeal to they commit certain violent or drug-related the county board of education if a school district offenses.) COEs receive direct funding for these denies its application to open a charter school. students, who typically are served at COE-run Similarly, parents can appeal to the county board if county community schools, or at charter schools their home district has expelled their child and they authorized by the COE. (In cases where COEs do would like the decision overturned. not operate county community schools, students receive another placement, such as a district-run Juvenile Court and program.) The state also allows COEs to enroll County Community Schools other students in their county community schools. Many COEs Operate Juvenile Court Schools. For these other students, COEs must develop State law makes COEs responsible for ensuring local agreements under which the students’ home students placed in county juvenile facilities are districts reimburse them for associated education provided with an educational program. To comply costs. Preliminary data from 2023-24 shows with this requirement, COEs may directly educate that 51 COEs operate 74 county community students at juvenile court schools or arrange for schools serving an average of 19,964 students another COE or school district to educate the per day statewide. Like juvenile court schools, students. Since juvenile court school students the cumulative enrollment of students at these are in county-run facilities, COEs operate these schools is higher. COEs receive direct funding programs in partnership with county probation for 6,993 of these students and receive funding departments. Preliminary data for 2023-24 shows for 7,115 students through local agreements that 43 COEs (and one school district) currently negotiated with school districts. The remaining operate court schools. Of these COEs, 39 operate 5,856 students attend charter schools for which one court school and four operate two or more COEs do not receive direct funding. The size of court schools. Altogether, these schools serve an the community school student population varies average of 3,402 students per day as measured by significantly by COE, with about half of COEs that average daily attendance. On average, each COE operate county community schools averaging less serves 85 students per day across their juvenile than 65 students attending per day and the largest court schools, though this varies significantly by COE serving an average of 6,007 students per day. county, from seven students to 577 students. www.lao.ca.gov 3 AN LAO REPORT Oversight and Support COEs Also Must Review and Approve School District Plans. Chapter 47 of 2013 (SB 859, State Law Requires COEs to Provide Fiscal Committee on Budget and Fiscal Review) tasked Oversight of School Districts. The second COEs with reviewing and approving school district column of Figure 1 shows all the services COEs LCAPs. As part of this process, state law requires are required to provide to school districts within COEs to verify that district LCAP documents use their jurisdictions. Most notably, Chapter 1213 of the state-approved format; align with districts’ 1991 (AB 1200, Eastin) established the current adopted budgets; and appropriately direct funds fiscal oversight process, whereby COEs regularly to ELs, low-income students, and foster youth. monitor district solvency. Specific associated If district LCAPs meet these requirements, COEs responsibilities include the review and approval must approve them. If a COE rejects an LCAP, it of school district budgets, the review of interim must provide the district with technical assistance financial reports during the year, additional in modifying its plan. monitoring and technical assistance for districts identified as being at risk for fiscal insolvency, State Also Tasks COEs With Academic and more extensive intervention when districts Oversight and Support. Chapter 32 of 2018 are in severe fiscal distress. Additionally, state law (AB 1808, Committee on Budget) established a requires COEs to support districts in various other system of support for school districts and charter ways, including assisting them on certain pension schools identified for “differentiated assistance.” and insurance-related issues. School districts and COEs are identified for Figure 1 State-Required and Optional Activities Required Optional Alternative Education District Services Common Direct Instruction Common District Services Juvenile Court Schools District LCAP review, approval, Career technical education Teacher professional and related technical development assistance County Community Schoolsa Support of districts identified as Child care and preschool District LCAP development and needing improvement implementation Fiscal oversight Migrant education programs Leadership training Oversight of basic learning Adult education Standards implementation conditionsb Review of school staff Indian education programs Dissemination of information assignments and credentials about state policies Support of county board of After school programs Internet connectivity and education on appeal issues technology assistance Review of certain district audit Foster youth services Data support findings Review of districts’ LCFF Violence and drug prevention Assessment support unduplicated pupil counts programs Support of County Committee Charter school monitoring and on School District Organization investigation CalSTRS and CalPERS Legal and business services retirement reporting Support of unemployment Printing and production services insurance management system Technical assistance for after school, drug prevention, and foster youth programs a COEs receive funding to operate these schools if they serve students with certain characteristics. b COEs are required to review the condition of facilities, availability of textbooks, and teacher assignments in designated low-performing schools. LCAP = Local Control and Accountability Plan; LCFF = Local Control Funding Formula; and COEs = county offices of education. 4 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT differentiated assistance based on the performance Los Angeles County has the most school districts of their student subgroups. Under current practice, (80). In contrast, seven counties (Alpine, Amador, a district or COE enters differentiated assistance Del Norte, Mariposa, Plumas, San Francisco, and if they have at least one student group that has Sierra) have a single district within their jurisdictions. received the lowest performance level in two or Though each of these counties still has a county more priority areas. (We describe state priority superintendent of schools and a county board of areas in more detail later in this report). In 2023, education, its COE typically functions more like an 466 school districts and COEs and 203 charter extension of the school district office. In recognition schools were identified for differentiated assistance. of these especially tight district-county relationships, For each of the districts and charter schools within CDE—rather than the COEs—undertakes required its county identified for differentiated assistance, oversight activities on behalf of the seven districts. the COE is to take at least one of four actions: State Often Tasks Certain COEs to Take on (1) assist the school district in identifying its Regional or Statewide Roles. The state has given strengths, weaknesses, and student groups that regional or statewide roles to COEs for a wide are low performing or experiencing disparities from range of educational issues. For example, in 2004, other student groups; (2) secure an academic, Imperial COE was selected as the grantee tasked programmatic, or fiscal expert; (3) ask for assistance with helping schools across the state connect to from the California Collaborative for Educational high-speed broadband internet and continues to Excellence; or (4) identify the strengths and do these activities two decades later. The state weaknesses in a school district’s LCAP. (Identified also provides funding for nine COEs to serve as COEs receive assistance from either CDE, a geographic leads that help build capacity of other consortium of COEs, or another COE.) COEs within their region to effectively provide COEs Historically Have Fulfilled Other differentiated assistance to school districts. Functions Voluntarily. As the next two columns Typically, COEs taking on additional state level and of Figure 1 show, many current COE activities are regional roles are selected through a competitive not required by state law. Virtually all COEs provide application process and receive additional funding one or more optional services to school districts. for these new activities. Optional services commonly include staff training, Funding data support, and legal and business support. Exactly what optional services COEs provide LCFF Is Primary Source of State Funding varies across the state and is highly dependent on for COEs. In crafting LCFF in 2013, the state services needed within the county. For example, consolidated most state funding for COEs and some COEs serving many small school districts replaced most of the former funding formulas cover basic business services (such as payroll and with a new, two-part formula. As Figure 2 on procurement) for districts in the county. For the the next page shows, the alternative education districts that receive these services, the COE is grant provides funding based on the average providing an essential function. Many COEs also daily attendance of students enrolled in juvenile historically have applied for various state grants to court and county community schools. For funding provide direct student instruction to students that purposes, the state credits COEs with their average reside in the county. Most commonly, COEs have daily attendance in the current year, prior year, provided career technical education, child care and or the average of three prior years, whichever is preschool programs, migrant education programs, higher. Beginning in 2023-24, COEs also began and adult education. These programs tend to be receiving minimum grants if they operated at least offered regionally to students attending schools one juvenile court school and at least one county within the county. community school. (These minimum grants are technically considered add-ons, separate from the COEs Vary Greatly in Terms of the Number alternative education grant.) The operations grant of School Districts They Serve. In California, provides funding based on the number of school COEs have an average of 16 school districts districts and number of students in the county. within their jurisdictions, but the range is large. www.lao.ca.gov 5 AN LAO REPORT (The one exception is related to Figure 2 supplemental and concentration Components of Local Control Funding Formula for grant funds which we discuss in County Offices of Education (COEs) greater detail later in this section.) 2023-24 COEs Also Receive “Hold Harmless” Funding Through Alternative Education Grant LCFF. When the state transitioned Eligible student population Students who are (1) under the authority of the to LCFF, it included two provisions juvenile justice system, (2) probation referred, (3) on intended to hold harmless COEs probation, or (4) mandatorily expelled. that otherwise would have received Base funding $16,395 per student.a less funding under the new formula. Supplemental funding Provides 35 percent of the base rate for each student The first provision guarantees that that is an English learner, low income, or foster youth.b each COE will continue to receive Concentration funding Each English learner, low-income student, and foster at least as much total funding as it youth above 50 percent of enrollment generates received from revenue limits and an additional 17.5 percent of the base rate for categorical programs in 2012-13. juvenile court schools and 35 percent for county community schools.b The activities formerly associated Minimum grantsc $200,000 for COEs that operate at least one court with this funding, however, are school and $200,000 for COEs that operate at no longer required. Preliminary least one county community school. data from 2023-24 shows that Operations Grant 47 COEs (81 percent) are funded Base funding of $872,151 per COE. at the levels specified by their Plus $347,167 per school district in the county. Plus $69 to $109 per student in the county (less populous counties receive higher LCFF targets, with the remaining per-student rates). 11 being funded at their higher a As measured by average daily attendance. 2012-13 funding levels. Beginning b For juvenile court schools, all students are considered low income. c Minimum grants technically considered add-ons separate from the alternative education grant. in 2022-23, the state began growing the 2012-13 funding levels Note: COEs also receive funding from add-ons associated with the Targeted Instructional Improvement Block Grant and Home-to-School Transportation. with an annual statutory COLA. The second provision, known as COEs also receive add-on funds associated minimum state aid, ensures that with two categorical programs—the Targeted each COE will continue to receive at least as much Instructional Improvement Block Grant and the state General Fund as it received in 2012-13 for Home-to-School Transportation program—that categorical programs. The amount of minimum existed prior to LCFF. COEs that received funding state aid to which each COE is entitled varies based from these programs in 2012-13 continue to receive on historical participation in categorical programs, that same amount of funding in addition to what with those that ran more and/or larger programs the LCFF provides each year. (Home-to-School receiving larger amounts of state aid. Over one-third Transportation began receiving an annual COLA of COEs (22 of 58) receive minimum state aid in 2022-23.) Each COE’s target funding level is the funding. Similar to the first hold-harmless provision, sum of the alternative grant, operations grant, and COEs are not required to provide the services that add-ons. Like the school district LCFF, the COE originally generated the minimum state aid allotment. LCFF is funded by a combination of state General Almost half of COEs (26 of 58) receive funding from Fund and local property tax revenue, with the one or both hold harmless provisions. This funding proportion of each fund source varying by county. can be used for any purpose. As Figure 3 shows, Although the two components are intended to cover the preliminary hold harmless funding for 2023-24 costs of alternative education programs and district is $205 million—15 percent of all LCFF funding. support services, respectively, COEs generally In the rest of this report, we refer to additional LCFF have flexibility to use the their LCFF funding allotment beyond the alternative education and from either part of the formula for any purpose. operations grant as hold harmless funding. 6 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT • Equity Multiplier. In 2023-24, Figure 3 the state began providing $300 million annually to Breakdown of LCFF Funding for COEs schools that have student Preliminary 2023-24 (In Millions) populations with relatively high shares of poverty and mobility. Total Funding = $1.4 Billion Funding must be used for evidence-based services and supports for students, and Hold Harmless $205 must result in increased or Add-Onsb $64 improved services compared to what otherwise would have Students in County $458 been provided to students Operations County Community Grant in these schools. Schools Schools $180 receiving equity multiplier funding must set specific goals Alternative for improving performance Education Juvenile Court Grantª Schools of low-performing student $108 Districts in County $326 subgroups. About $29 million of the total allocation in Base $51 2023-24 is provided to 103 COE-run juvenile court and a Includes funding from minimum grant add-on associated with operating a juvenile court or county community school. county community schools. b Includes funding from Targeted Instructional Improvement Block Grant and Home-to-School Transportation. This represents 81 percent of all juvenile court and county community schools operated COEs Receive Other Funding to Provide by COEs. Direct Services to Students. In addition to their • Federal Title I Funding. The federal LCFF alternative grant funding, COEs also receive government provides funding to schools funding from various other sources to provide for improving academic achievement and direct services to students. In most cases, these providing support to high-needs students. programs allocate funding to school districts, In 2023-24 COEs received $31 million from COEs, and charter schools. Several notable Title I, Part A to support students in schools sources include: with high shares of low-income students, and $17 million from Title I, Part D, Subpart 2 • Student Support and Enrichment Block to support students who are neglected, Grant. In 2023-24, the state began providing delinquent, or at risk. COEs with $3,000 per student in juvenile • Special Education. Many COEs coordinate court and county community schools. Funds special education services within their region. can be used for a variety of activities, such These COEs receive funding for providing as expanding access to career technical services to students with disabilities from education, elective, world language, and various federal and state sources. The exact A-G courses; college/career or transition role COEs have depends on regional decisions counseling; mental health support services; about how funding will be administered and providing postsecondary options for and how special education services will be incarcerated youth who have a high school provided to students. In some cases, the diploma or high school equivalency certificate. COE serves as an administrative agent that Based on preliminary data, COEs received initially receives funding and then passes $34 million in 2023-24 for this purpose. www.lao.ca.gov 7 AN LAO REPORT funds through to school districts that provide • Fee-for-Service Contracts. COEs generate the special education services. In other revenue locally through fee-for-service cases, COEs are directly hiring and providing contracts. For example, some COEs have services to students in the county. COEs also contractual agreements to provide payroll or receive special education funding for students accounting services to their districts. (Other with disabilities enrolled in juvenile court and COEs provide these services at no charge county community schools. as part of their palette of optional services.) • State Preschool and Head Start. COEs operate a substantial number of preschool Local Control and Accountability Plans programs. About 71 percent of COEs operate State Required LCAPs Beginning in 2014-15. State Preschool, the state funded preschool To provide transparency regarding how LCFF program for three- and four-year olds. funding is spent, the state requires COEs, school Many COEs also operate federally funded districts, and charter schools to adopt LCAPs. The Head Start programs. state sets specific requirements for engagement • Career Technical Education. Many COEs with educational partners in developing and receive funding from state and federal adopting LCAPs. In their LCAPs, COEs, school grant programs to provide career technical districts, and charter schools must set goals in education opportunities to students. For state priority areas and specify actions they will example, in 2023-24, about half of COEs take to meet these goals. Although we focus on received funding from the Career Technical COEs in this section, all of the LCAP requirements Education Incentive Grant totaling roughly generally apply to school districts and charter $22 million. Additionally, in 2022-23, nine schools unless otherwise noted. COEs received federal Perkins V funding either COEs Must Adopt LCAPs for Their Juvenile individually or as part of a consortia, totaling Court and County Community Schools. The about $1 million. LCAP is a three-year plan that outlines each COE’s strategy to improve outcomes for students enrolled COEs Also Receive Other Funds for School at its juvenile court and county community schools. District Support Services. COEs also receive The plans are intended to hold COEs accountable some additional funding outside of LCFF for specific for serving these students and provide information services provided to school districts. to the public about the services students receive. • Differentiated Assistance. The state In addition, students attending alternative provides COEs with additional funding for their schools participate in the state’s standardized differentiated assistance activities through testing system. a formula based in part on the number of COEs Must Adopt LCAPs Every Three districts in need of assistance. In 2023-24, Years and Update Them Annually. LCAPs are the state provided COEs $84 million for three-year plans that school districts must update this purpose. annually. Through a vote of their local governing • Foster Youth Services Coordinating board, COEs must adopt (or update) their LCAP by Program. The state provides COEs with July 1 every year, in conjunction with their annual funding to coordinate support services budget adoption. COEs also are required to hold to foster youth in their county. Each COE at least two public hearings to discuss and adopt receives funding based on the number of (or update) their LCAPs. The COE must first hold at foster youths in their county and the number least one hearing to solicit recommendations and of school districts in the county. Total comments from the public regarding expenditures statewide funding for this purpose is about proposed in the plan. It then must adopt (or officially $32 million ongoing. update) the LCAP at a subsequent hearing. COEs are also required to annually present a midyear report on the LCAP to their governing board, no 8 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT later than February 28. The report must include a Figure 4 midyear update for metrics identified in the current LCAP and midyear expenditure and implementation State Has Performance Measures in data on all actions identified in the LCAP. Ten State Priority Areas COE LCAPs Based on Ten State Priority State Local Areas and Associated Performance Measures. Basic Conditions of Learning The legislation enacting LCFF establishes a Access to instructional materials, X framework for LCAPs based around goals in ten appropriately assigned teachers, and facility conditions state priority areas. (Eight of these ten priority areas Implementation of State Standards apply to school districts and charter schools, while Implementation of academic standards X two apply only to COEs.) Statute also directs the Parent Engagement State Board of Education (SBE) to address several Parent and family engagement X implementation details, such as developing an Pupil Achievement LCAP template that all COEs must use. As shown English Language Arts assessment X in Figure 4, some priority areas focus on academic Mathematics assessment X success (such as student achievement and course English learner progress X College and career readiness X access), while others address issues outside of academics (such as parental involvement Pupil Engagement High school graduation rate X and school climate). SBE also has established Chronic absenteeism X 13 performance measures in the state priority School Climate areas intended to monitor performance. Seven of Suspension rate X the performance measures are metrics that COEs Local climate survey X report to the state and are measured consistently Course Access statewide. The remaining six measures are local Access to a broad course of study X indicators for which COEs report locally developed Other Student Outcomes metrics or qualitative information describing No specific indicators adopted X their progress in the priority area. In addition Coordination of Instruction for to these required state and local measures, Expelled Studentsa No specific indicators adopted X COEs may include other performance measures Coordination of Services for Foster in their LCAPs. Youtha Statute Requires COEs to Set Goals in State No specific indicators adopted X Priority Areas. For each of the state and local a This state priority area only applies to county offices of education. measures, statute requires COEs to establish performance targets for its students, student lowest performance level based on one or more subgroups, and schools. (Statute identifies state indicators; and (3) student subgroups that 13 student subgroups—eight racial and ethnic received the lowest performance level based on groups as well as ELs, low-income students, foster one or more state indicators, either across all the youth, students with disabilities, and homeless COE’s schools or at a specific school. Focused students.) Statute requires that COEs establish goals for equity multiplier schools must be specific these targets for the coming school year as well as to improving performance for low-performing the next two years. COEs are required to evaluate student subgroups and addressing any issues with progress towards meeting the goals specified in teacher credentialing and preparation. LCAPs over a three-year period. COEs Must Specify Actions They Will Take COEs Required to Develop Additional to Achieve Goals. A COE’s LCAP must specify “Focused Goals” in Certain Circumstances. the actions the COE plans to take to achieve its Beginning in 2024-25, COEs are required to develop goals. The specified actions must be aligned focused goals for: (1) schools receiving equity with the COE’s adopted budget. For example, multiplier funding; (2) schools that received the a COE could specify that it intends to provide www.lao.ca.gov 9 AN LAO REPORT individualized transition plans for its juvenile court parent advisory committee and, in some cases, a school students upon release. To ensure the LCAP separate EL parent advisory committee. (EL parent and adopted budget are aligned, the COE would advisory committees are required if ELs comprise be required to include sufficient funding for staff at least 15 percent of the district’s enrollment and positions to develop transition plans and assist the district has at least 50 EL students.) Beginning in the coordination of services for families. COEs in 2024-25, COEs are required to establish are required to assess the effectiveness of actions student advisory committees if they had not had taken to achieve goals specified in their LCAP and one established or do not have two positions for are required to change actions that have not been students on the parent advisory committee. The effective towards meeting their intended goal over a advisory committees can review and comment on three year period. the proposed plan. COEs must respond in writing COEs Must Ensure “Proportionality” When to the comments of the advisory committees. COEs Spending Supplemental and Concentration also are required to notify members of the public Grant Funds. COEs must include information that they may submit written comments regarding demonstrating that they are increasing or improving the specific actions and expenditures proposed in services for ELs, low-income students, and the LCAP. The LCAP must include a description of foster youth in proportion to their supplemental how the COE engaged with educational partners, and concentration funding. As part of these and describe how the engagement resulted in requirements, COEs also must provide justification changed to goals and actions set forth in the LCAP. if they plan to spend their supplemental and LCAPs Must Include an LCFF Budget concentration funding for schoolwide purposes Overview for Parents. Beginning in 2019-20, or for all COE-run programs. SBE is required to COEs must include in their LCAPs a short summary develop regulations implementing these provisions. for parents. This summary must include projected The existing regulations allow COEs to reflect their total revenue for the upcoming fiscal year (including increase or improvement in services in quantitative LCFF and other state, local, and federal funding), or qualitative ways. (The LCAP template allows projected expenditures, and budgeted expenditures COEs to include spending information and a for planned actions and services. The summary narrative description to demonstrate how services must also specify how much of the COE’s total will increase or improve.) COEs must report the total LCFF funding is projected to be from supplemental amount of supplemental and concentration funding and concentration grants, and provide estimates of they expect to receive, as well as describe how they current-year expenditures to increase or improve plan to use their supplemental and concentration services for ELs, low-income students, and foster funding for the benefit of ELs, low-income youth. Beginning in 2024-25, the overview must students, and foster youth. They also must report contain plans on how funding from the Student how the proportional increase in supplemental Support and Enrichment Block Grant will be spent. and concentration funding meets a proportional In addition, the overview must contain a brief increase in services for these students. COEs are description of the activities or programs supported required to track whether any supplemental and by general fund expenditures that are not included concentration funding goes unspent in any given in the LCAP. year, and must set aside any unspent funds for CDE Must Review and Approve a COE’s LCAP. increasing and improving services in future years. Each COE must submit its LCAP to CDE for review. COEs Must Solicit Input in Developing Plan. (School districts submit their LCAPs to COEs COEs also must follow a process for soliciting and charter schools submit their LCAPs to their input in adopting their LCAPs. One of the main authorizing school district or COE.) The department requirements is that a COE consult with its school must approve a COE’s LCAP if it determines that employees, local bargaining units, parents, and (1) the LCAP adheres to the required template, students. As part of this consultation process, (2) the COE’s budgeted expenditures are sufficient COEs must present their proposed plans to a to implement the strategies outlined in the LCAP, 10 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT and (3) the LCAP adheres to the expenditure • Additional Statewide Reporting. Beginning requirements for supplemental and concentration in 2024-25, CDE will be required to report funding. As part of its review, the department can additional information for students in juvenile then seek clarification from the COE about the court and county community schools on contents of its LCAP. If the department seeks such a statewide, countywide, and school level clarification, the COE must respond in writing. basis. This information includes: (1) the Based on a COE’s response, the department can number and percentage of students who submit recommendations for amendments to the leave juvenile court or county community LCAP back to the COE. The COE must consider schools without a high school diploma or any of the department’s recommendations at a equivalent and subsequently enroll in a school public hearing, but the COE is not required to district or charter school; (2) the number and make changes to its plan. The annual deadline percentage of students enrolled in a juvenile for approval or rejection of a COE’s LCAP by the court or county community school without a department is October 8. high school diploma or equivalent and do not transfer to another public school; (3) access Other Reporting to and completion of A-G approved courses, Required Plan for Supporting School high school equivalency tests, and accredited Districts in Continuous Improvement. college coursework; and (4) a summary of Chapter 32 established a requirement for county outcomes aligned with the California School superintendents to prepare a summary of how Dashboard indicators for students served the COE plans to assist all school districts within by COE alternative schools, with the ability the county. The plan describes actions the COE to display information by all juvenile court will take in approving all LCAPs. The plan also schools, or by all county community schools. describes actions the COE will take to provide • An Evaluation of Juvenile Court and County assistance to school districts identified for Community Schools. CDE is required to differentiated assistance and how it will support contract for an independent evaluation of other districts in moving further ahead in their juvenile court and county community schools LCAP goals. COEs are also to report goals and and provide a report to the Legislature and an expenditure plan for providing this assistance. administration by November 1, 2025. The By November 1 of each year, CDE is to compile report is to include a number of components, COE descriptions of the support they are providing including an analysis of state and federal and post them in a single document on the funding available for these schools and a CDE website. sample cost-sharing agreement between COEs Have Reporting Requirements for COEs and county probation departments. Specific Categorical Programs. Many COEs • Convening of a Workgroup for Students participate in categorical programs that provide With Disabilities. CDE is required to convene funds for specific purposes. These programs each a workgroup to examine existing law and have specific reporting requirements. For example, current practices around the education of if a COE operates a State Preschool program it students with disabilities enrolled in juvenile must submit annual information on spending and court schools and county community schools, program enrollment. and provide a report to the Legislature 2023-24 Budget Package Requires State and administration by February 25, 2025. Actions Related to Juvenile Court and County This report is to include recommendations Community Schools. Trailer legislation included for improvements on several aspects, in the 2023-24 budget package adds three such as timely transfer of pupil records to requirements relating to juvenile court and county and from county juvenile court schools community schools. Specifically, the budget and collaboration between COEs and package requires: other agencies. www.lao.ca.gov 11 AN LAO REPORT ASSESSMENT In this section, we provide our assessment of COE LCFF Funding Provides Significant the transparency of COE budgets and plans. Our Degree of Flexibility. COE LCFF funding is unique assessment was based on a review of COE LCAPs in that it has two components intended to address and other budget documents, as well as interviews two distinct activities (operating juvenile court and with COE staff and other experts in COE spending county community schools and providing district and programs. support), while also allowing COEs to use the funding for any purpose. This means that COEs COE Budgets can spend funding generated based on juvenile COE Budgets Can Be Difficult to Interpret. court school programs on district support, and Reviewing a COE’s overall revenues and vice versa. COEs may also use their LCFF funds for expenditures does not provide helpful context other activities, such as offering career technical for understanding the ways COEs choose to education classes to students in the county. spend their discretionary funding. COE budgets This flexibility provides COEs with a great deal of often include significant amounts of revenue discretion to determine what activities would be of for which COEs simply pass through funding to most benefit in their county and results in significant school districts and other local governments. variation across the state. However, this flexibility (For example, with special education funding that also makes state oversight of COE activities is transferred to school districts and certain local more difficult. property tax transferred to trial courts.) In addition, Juvenile Court and COEs conduct a wide range of activities with LCFF—their primary state funding source. As such, County Community Schools overall budget documents do not separate out LCAP Overview for Parents Can Be Difficult funding based on specific activities, such as direct to Interpret. Although intended to provide greater services to students and district support. Given context to the spending described in the LCAP, the these issues, the Legislature cannot determine required overview for parents can be difficult to from budget documents if unique aspects of COE interpret. The first figure included in the template— funding and spending are due to pass-through Projected Revenue by Fund Source—shows the funding or because of the COE’s specific role within COE’s overall LCFF (including supplemental and the county. concentration funding) as a share of total revenue. Many COEs Provide High-Level Summaries The figure, however, includes pass-through funding of Spending to Their Boards. Based on our not spent by the COE and does not disaggregate conversations with COE staff, most COEs provide how much of the LCFF funding they receive is from high-level information on the entirety of their the alternative grant, operations grant, or from budgets to their superintendents and county the hold harmless funding. The second figure— boards of education. These high-level summaries Budget Expenditures in the LCAP—shows the are intended to provide leadership with a sense share of total COE expenditures included in the of the various activities that COEs conduct. Given LCAP. Since only the spending on juvenile court there is no state requirement for how to display and county community schools is included in COE this information, COEs take different approaches LCAPs—and COEs receive more funding through in categorizing their spending. For example, some their operations grant—a very small portion of COEs distinguished between required and LCFF funding is typically shown to be included. optional activities, while others focused on whether Rather than helping provide context for parents, the spending was directly benefitting students or documents raise questions as to why such a small supporting school districts. share of LCFF funding is included in the LCAP, even though COEs are complying with the requirements. 12 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Displaying total COE revenues and expenditures— Given COE Student Population, Distinction including funding for district support and funding Between Base Program and Increased and that is passed through to districts—makes it more Improved Services Seems Arbitrary. The challenging to assess spending specifically related increased and improved services section is to juvenile court and county community schools. intended to demonstrate how a COE plans to use This issue is unique to COEs, as school districts supplemental and concentration grant increases to primarily spend funding on services to students and increase or improve services for students generating do not have such a large share of spending that is the additional funding. Creating a distinction passed through to other entities. By including all between specific student groups and all students, revenues in the totals, the summary makes it more however, is difficult given the vast majority of COE challenging to see how COE spending on juvenile students are in one of these three categories. court and county community schools compares All juvenile court school students are categorically with the amount they receive from the alternative considered low income and generate supplemental education grant and other funding specifically for and concentration funding. For county community these programs. schools, 82 percent of students statewide in Interest in Understanding Overall Alternative 2023-24 are ELs, low income, or foster youth. Education Spending. In our conversations with Moreover, virtually all students in both settings enter COEs, they indicated that many educational COE-run schools with significant needs. Given partners are particularly interested in understanding the needs of these students, COEs are typically the current services that are available for students integrating additional supports within their base and whether these services are consistently program. Requiring separate reporting creates provided. For example, parents may be interested an arbitrary distinction that is not consistent with in knowing whether their child will be able to receive COE operations. COEs also are already required to counseling services, the types of courses the include goals and actions to address the needs of student can access at a court school, and whether their lowest-performing subgroups in other sections a student with a high school diploma would have of the LCAP. For example, they must set focused access to higher education. These questions are goals for the lowest-performing subgroups in all likely common because students are enrolled in schools receiving equity multiplier funding. these schools on short notice and juvenile court Required COE Metrics Not Particularly schools are not as accessible to parents as a Relevant for Assessing Quality of Programs. traditional school. The spending in the LCAP, Given the student population that COEs serve, the however, focuses on new spending and does not existing state-required metrics are not well suited to comprehensively describe services available to assessing the quality of their educational programs. students. Moreover, some services that students Students typically have relatively short stays and receive may not be included in the LCAP because can enroll in these schools at any point in the year. they are funded by county government or other In 2022-23, 75 percent of juvenile court and county external entities. (For example, facilities costs community schools were considered “nonstable”— and other services for juvenile court schools that they are enrolled at their school for less than 245 are covered by county probation departments.) continuous days or leave the school due to truancy The LCAP template includes a “general information” or expulsion. This is compared with 8.8 percent of section that provides a space for COEs to describe students statewide who are considered nonstable. their schools and the students they serve. COEs This data is consistent with our conversations sometimes use that section to more broadly with COEs, in which they indicated that their describe available services for students. The students are typically enrolled for short periods template also includes a section for COEs to of time, particularly for juvenile court schools. summarize their spending that is not included in the Given these short stays, the four-year graduation LCAP. COEs are not required to share any specific rate metric is not a particularly useful metric for details in either of those sections, so the level of assessing a juvenile court or county community detail varies by COE. school. (Schools, however, are required to report this metric for federal accountability purposes.) www.lao.ca.gov 13 AN LAO REPORT Moreover, given the high degree of mobility, Little Transparency for How LCFF Operations only a small share of students are enrolled long Grant and Hold Harmless Funds Are Spent. enough to take the standardized tests in math Most state categorical and federal funds that COEs and English language arts. In addition, many receive have specific spending restrictions and students are significantly behind grade level and reporting requirements. For example, COEs that will show low performance on the standardized operate a State Preschool program must report tests, even if they made substantial academic enrollment and expenditure information to CDE and progress while they were enrolled in the juvenile spend the associated funds on the State Preschool court or county community school. Although program. Conversely, the operations grant and not required, many COEs use local metrics to hold harmless components of the LCFF have no monitor their own progress based on short-term reporting requirements and are unrestricted, which measures of performance, including the number means the state knows very little about how these of credits students earn and whether students funds are spent. Although COEs provide unaudited successfully transition back to their traditional expenditure data annually, this information cannot schools. The challenge of finding useful metrics is answer important questions, such as the level of not unique to COE-run programs. This also applies funding and activities provided for district support, to other schools operated by school districts or the degree to which COEs use these funds to and charter schools that are designed to serve provide services to students across the county. students who are behind on credits and are at risk The annual expenditures also do not distinguish of dropping out. the operations grant and hold harmless funding from the alternative education grant. Moreover, LCFF Operations Grant and unlike school district LCFF and the alternative Hold Harmless Funds education grant included in the COE LCFF, there COEs Regularly Communicate With School are no broad requirements to submit a plan or Districts Regarding Available Support describe how the operations grant and hold Activities. Many COEs meet with school districts harmless funding is being spent, nor do COEs have or have public meetings to communicate to local to report on any outcomes associated with these partners the support activities that are offered. funds. The lack of information makes it difficult These meetings are also forums for COEs to for the Legislature to assess whether the amount obtain feedback on school district needs. Several of funding provided to COEs is aligned with state COEs put together annual reports or strategic requirements and expectations. plans to enhance this communication and transparency locally. RECOMMENDATIONS In this section, we describe our Require an Annual Report That Describes recommendations for improving transparency Major COE Activities. We recommend requiring of COEs’ spending. Specifically, these COEs to publish a report annually at the start of each recommendations are intended to provide greater school year that includes a narrative of the major clarity around each COE’s major activities and activities and services COEs conduct. This would services, better monitor spending and outcomes allow state and local partners to understand at a through the LCAP, and increase transparency high level the key work COEs do to support districts regarding how LCFF operations grant and hold and students, and provide an opportunity for COEs harmless funding is spent. to describe the specific role they play in their region. This report would include any major activities or priority initiatives, regardless of funding source. 14 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT The report would also include a description of the Most COEs also would still be required to set various ways the COE serves in a statewide or focused goals for equity multiplier schools and regional role, such as operating as a geographic schools with low-performing subgroups on the lead or operating countywide State Preschool School Dashboard. This action would shorten the programs. We recommend providing COEs with LCAP by eliminating a section that is duplicative flexibility in determining the format and content of of other portions of the plan. Implementing this report. This would allow them to better explain this change would require modifying statute to their mission and key goals for the academic year. exclude COEs from the requirements associated Limit Funding in Overview for Parents to with tracking increased and improved services Alternative Education Grant and Related Funds. within the LCAP. We recommend the revenues and expenditures Establish Set of COE-Specific Outcome listed in the overview for parents be limited to those Metrics. We recommend that state reporting related to funding from the alternative education requirements for these schools include academic component of the LCFF (including minimum grant performance data that measure how well they serve funds), the Student Support and Enrichment Block short-term students. The state could take a variety Grant, and equity multiplier. Under this approach, of approaches to measuring outcomes for students it would be easier to see how the funding COEs at juvenile court and county community schools. receive based on their juvenile court and county Two promising metrics that many schools already community schools compares with the costs of use include (1) scores on pre- and post-tests of operating these programs. skills, and (2) credits gained while enrolled. Various Require LCAP Include Description of pre- and post-tests exist and currently are used Services and Courses Students Can Access. by some COEs. Should the Legislature choose We recommend requiring that, in the general to adopt pre- and post-tests as a state-required information section of the LCAP, COEs be required performance measure, we recommend the state to include a description of services available to approve a specific set of tests and require that students and the range of courses that students schools select their tests from the approved can access. The services provided would include list. This would allow the state to compare the those funded outside the LCFF, as well as short-term academic progress of students across partnerships the COEs have with external entities juvenile court and county community schools. that provide services to students. COEs could The number of credits gained while at a juvenile describe the courses that students can access, court or county community school is another including career technical education courses, or short-term academic measure that would provide A-G courses. COEs could also describe whether the state with valid information about students’ they partner with a community college to provide academic progress and whether alternative schools access to dual enrollment for students. This would are meeting their primary objective of helping allow state and local partners to understand at a students overcome credit deficiencies. The state high level the existing programs and services to could consider soliciting input from COEs and students, in addition to the new spending included other experts on alternative education or other in the LCAP. relevant outcome metrics that could be added to the Dashboard that would be a better indication of Eliminate the Increased and Improved performance at COE-run schools. We recommend Services Section. We recommend eliminating that any metrics take into consideration the amount the increased and improved services section of time that students are enrolled. (For example, by of the LCAP. Virtually all students enrolled in displaying the average number of credits gained for juvenile court and county community schools are each 15-day period of enrollment.) students with high needs, and COEs are providing additional support through their base program. COEs would still report the actions they are taking to achieve goals around state priority areas. www.lao.ca.gov 15 AN LAO REPORT Require Expenditure Information on LCFF COEs also should be required to include Operations Grant and Hold Harmless Funding. spending from their alternative education grant, In addition to the annual report, we recommend if those funds are not used for students enrolled COEs develop a report specifically on how the LCFF in juvenile court and county community schools. operations grant and hold harmless funding was We recommend COEs be required to report spent. These reports should be publicly available this expenditure information in a format that is on COE websites six months after the close of the comparable across the state. The Legislature fiscal year and should disaggregate spending by could add subcategories of spending to address the following categories: specific interests. For example, the Legislature could require disaggregating oversight and • Oversight and Support. This would include support spending based on whether the activity is any district support or oversight activities required by law or optional. The Legislature could COEs conduct. Examples of activities that also require spending on services for students be would fall in this category would be fiscal disaggregated by program type (career technical oversight, academic oversight and support, education, special education, et cetera). business and information technology services, or training of district staff. Make Continuous Improvement Report Publicly Available. We find value in the information • Juvenile Court and County Community COEs are providing in the current required Schools. This would include any operations continuous improvement report per Chapter 32. grant or hold harmless funding used We recommend these reports be made publicly to support juvenile court and county available in their entirety. Currently CDE compiles community schools. COE descriptions of support they are providing. • Direct Services for Students Not Enrolled Based on our conversations with COE staff, it does in Juvenile Court and County Community not seem to be major workload to post these plans Schools. This would include spending on since they are already being developed. career technical education, adult education, preschool, and other programs that are directly provided to students enrolled in school districts and charter schools within the county. LAO PUBLICATIONS This report was prepared by Michael Alferes and Sara Cortez, and reviewed by Edgar Cabral. 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, California 95814. 16 LEGISLATIVE ANALYST’S OFFICE