Reforms > Local Control Funding Formula

School finance reform prompts dispute over counting low-income students


Photo from iStockphoto.com

Photo from iStockphoto.com

Never has school lunch meant so much for California education.

Delivering significantly more money to schools based on the number of low-income children they serve is at the heart of the sweeping new K-12 finance system approved by the state Legislature in June. The new system defines “low income” as those students eligible for the school’s free and reduced-price meals program.

But two months into the rollout of the reforms, which Gov. Jerry Brown praised as a victory for the neediest students, two of the largest districts – Los Angeles Unified and Fresno Unified – are in a dispute with the state over a last-minute change in how children who receive free meals are counted. Instead of moving into the school year confident of how much new funding they’ll receive for low-income students, the two districts, as well as scores of other districts in the state, are now being asked to submit new data from hundreds of thousands of low-income families before the funding will be released.

“We didn’t bargain for this and we were not told this,” said John Deasy, superintendent of Los Angeles Unified School District, the state’s largest district with more than 650,000 students, more than half of whom – 384,000 students – attend 466 district schools that are being asked to certify low-income students again. If the demand for new paperwork jeopardizes funding for needy children in any way, after years of work to pass Proposition 30 to fund education and to pass the new education finance system, Deasy said, there will be an outcry from educators, advocates, students, parents and legislators. “People will become unglued,” he said.

Counting heads

The dispute originated in a California Department of Education statement in August that it would no longer accept meal eligibility data used for decades by the federal government at a subset of schools that serve high percentages of low-income families. The state’s rejection of the data is being “hotly contested” in conversations between the district, the California Department of Education and the governor’s office, Deasy said. “We have been documenting poverty for years,” he said, and the federal data requirements are “an absolutely legitimate way to document poverty.”

The August announcement sent districts into a panic because they believed they had to have the new low-income student certification data by Oct. 2, the annual “census day” when schools must provide a comprehensive count of their student body to the state. But the state has clarified its information and has said that schools can correct the documentation of low-income students through Feb. 6, 2014.

At issue are two different methods used by the federal government to track low-income students eligible for free and reduced-price meals. The first method, used by the vast majority of schools, reports eligible students by their individual student identification numbers every year. The second method, used by 1,529 schools in high-poverty neighborhoods in the state, reports students individually once every four years and then uses that “base year” data to create a percentage of eligible students.

But with hundreds of millions of dollars of funding for low-income students on the line, the California Department of Education says it needs current data on low-income students.

“It’s one thing to do a rough estimate (based on numbers collected every four years), and it’s a much different thing when you have to calculate how much money to give to schools,” said Keric Ashley, director of the Analysis, Measurement and Accountability Reporting Division in the California Department of Education.

Millions at stake

Under the new formula approved by the Legislature, districts are supposed to receive additional funds for every high-needs student enrolled – as much as $3,000 per student once the formula is fully funded over the next eight years. With more than half of California’s 6 million students from low-income families, the monetary impact is huge for both the districts and the state budget.

And that demands reliable data, said Ashley, noting that some high-poverty-level schools collect “base year” data even less frequently than every four years. This is because income levels at their schools have remained consistently low and the federal government has granted extensions. There are schools, he said, “that haven’t collected that data for over a decade.”

Also at issue is whether low-income students must be identified individually, by their student identification numbers – which is data the group of high-poverty schools don’t have. But this level of detail is necessary, Ashley said, to ensure that low-income students aren’t also counted as foster youth or English learners. Each of these classifications – low income, foster youth and English learner – triggers additional funding for a student, but students are not allowed to collect additional funding for more than one classification. For instance, for the purposes of the new state funding formula, a low-income foster youth must be categorized as either low income or foster youth, but not both.

Still, Ruth F. Quinto, chief financial officer of Fresno Unified, questioned whether a new round of data collection was necessary in this first year of implementation of the new funding system, known as the Local Control Funding Formula.

“The requirements from the California Department of Education to document all of this sensitive information right now, we believe, are unnecessary, given the type of documentation that already exists,” she said.

The Fresno district has 55,000 students in 79 schools – representing three-quarters of the 106 schools in the district – that serve high-poverty neighborhoods and use the four-year data collection cycle.

‘Students are going to get left out’

While still hoping that the California Department of Education will adjust its demand for new documents, Quinto said Fresno is gearing up for a massive outreach to families. “The biggest barrier is logistically reaching families and having forms completed, returned, entered and accepted by the state,” she said. “We are putting together teams of people in a variety of languages, a game plan, and different communication strategies if we are left with no choice but to get moving on it.”

She added, “Students are going to get left out. We believe that would be in contrast to the governor’s desire to provide resources to our most at-risk population statewide.”

Even smaller districts are concerned.

“I don’t make the (federal) rules on how my kids qualify for free and reduced-price lunch,” said Frank Betry, superintendent of the Terra Bella Union School District in Tulare County. State lawmakers decided to use federal eligibility for the meal program as the qualification for extra funding for low-income students, he said, but now the California Department of Education has decided it won’t accept that count at the high-poverty schools. “If you are going to attach a qualifier to an existing program,” he said, “you can’t carve out the rules you don’t like.”

Deasy and others are still hoping to find a solution that addresses both district and state needs.

The new funding formula is “supposed to be less bureaucratic, more flexible and serve kids of greatest need,” Deasy said. “We believe in it completely and we hope the governor continues to be the unwavering governor he has been on this issue.”

Filed under: Local Control Funding Formula, School Finance

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16 Responses to “School finance reform prompts dispute over counting low-income students”

  1. navigio said

    on September 17, 2013 at 7:19 am

    There are schools, he said, “that haven’t collected that data for over a decade.”

    yet another onerous, burdensome reporting requirement that turns out not actually to have existed.. *sigh*

  2. CarolineSF said

    on September 17, 2013 at 8:04 am

    It sounds like schools are being asked to collect data that they currently don’t collect on their own at all and don’t necessarily have a mechanism to collect; is that correct?

    If I’m understanding correctly, the current method (besides students who automatically qualify based on already receiving public services) is that families fill out the meal applications and a percentage are audited by the California DOE. In my time as a San Francisco public school parent (1996-2012), the district never asked us for income information; only the feds did, via the meal application.

  3. Kim said

    on September 17, 2013 at 12:21 pm

    This article is talking about Provision 1, 2, 3 schools – federal options where, if more than a certain percentage of the school qualifies for F&R, then in subsequent years, no meal applications are required at all – the percentage of eligible students from the base year is used in subsequent years. In some cases, I think the entire school is considered eligible. There are other impacts – a school under one of these provisions would, I think, have a socio-economically disadvantaged subgroup of 100%. This percentage would also be used by the district to distribute Title 1 funds to that school.

  4. Jane Meredith Adams said

    on September 17, 2013 at 1:49 pm

    Kim is quite right. The schools involved are Provision 1, 2 or 3 schools (1,529 in the state) that operate under a “provision” in the federal lunch program designed to reduce paperwork for schools and families when 80 to 100 percent of students qualify for the subsidized meals. Students at these schools don’t fill out meal applications every year and the schools don’t have student-specific data every year, which is what the California DOE says it needs.

    At these schools, the mechanism to collect data about income status, for those families that aren’t automatically identified as low-income because they receive public services, would likely be a form asking families to verify that their income is at or below 185% of the federal poverty level.

    Ironically, as part of being a federal Provision 1, 2 or 3 school, schools agree not to ask families for income information related to meal eligibility, unless it is a base-year survey, typically conducted every four years. So the form would have to ask for income information, without mentioning the lunch program.

    • CarolineSF replied

      on September 17, 2013 at 3:41 pm

      Yes, I know at least about Provision 2, but my question is whether the schools themselves have been collecting income data as opposed to just having the families fill out the NSLP meal application. So do P2 (and I’m not familiar with 1 and 3) schools already collect data on their own, or are they now being asked to implement a new process to do so?

      • Jane Meredith Adams replied

        on September 17, 2013 at 8:50 pm

        Here’s how it works. The NSLP application asks for income level. The school collects the applications and reports to the state which student id numbers meet the income qualification for the subsidized meals. The state sends the information to the federal government.

        So it’s not exactly a new process for Provision 2 schools to ask for income information, but it is unusual because they will be verifying income data annually (instead of every four years) and they will not be allowed to mention the meal program as they do so. Also, they will likely have to send income questionnaires to all students, even those who “directly qualify” for the meals, because of what I understand to be rules prohibiting schools from overtly identifying students by income status.

  5. Manuel said

    on September 17, 2013 at 1:58 pm

    Oh, this is so deliciously confusing. But it really isn’t.

    Until the recession, nobody reall cared how many FRMP students there were. Perfunctory checks were made, the funds came in and were used to supplant, not supplement, the local budget.

    But recently the feds audited California on the use of Title III funds on the grounds that not enough services were received by English learners.

    Now the rumor is going around LAUSD that Title I funds cannot be used for supplies as has been the case for as long as anyone can remember. Can you guess why this change of policy, dear reader?

    LCFF complicates everything and since the geniuses in charge put in the Ed Code that Title I eligibility is one way of defining a poor child, well there’s a big scramble now to have those forms filled up.

    Because of internal LAUSD politics, the District changed the way it distributes funds. About 20 schools were denied funds for 2012-13 and after parents complained vociferously EIA/EDY funds were used to make them less happy. Still, that has set off a mad scramble at the beginning of the year to sign up as many kids for the FRMP in order to go over the magical 50% threshold to qualify for next year.

    LAUSD knows how many poor kids they got at each school. They even publish that list! What they don’t want to do is to enter that information into CALPADS.

    Incidentally, here’s something from CALPADS’ own web site on how student counts are to be reported:

    How do LEAs report students participating in Title I, Part A if the school is operating a school-wide program?

    LEAs should not submit Student Program records for students receiving services through a school-wide Title I, Part A school program. CALPADS will only collect student-level program participation in Title I, Part A if the student is receiving targeted services. The California Department of Education (CDE) collects, at the state-level, which school are receiving funding for NCLB Title I, Part school-wide services; therefore, the CDE can derive counts of students receiving NCLB Title I, Part A school-wide services based the school’s participation and the count of students enrolled in that school.

    LAUSD does not offer “targeted services.” Funds are distributed for “school-wide programs.” It should be very simple for LAUSD to correct the records since for the last 10 years (AFAIK) all schools have been SWP not TAS. Once that is cleared, CDE should be able to get the count from the data that it already has, just as it does with ADA. Isn’t that what it says in the August 5, 2013, memo linked above? It is just one check in each school’s file! Is that too much to ask? I don’t see why Deasy is complaining.

    Also, and this is crucial, the number of students participating in FRMP are to be reported within a window that covers the end of the year (April 28, 2014, to July18, 2014 for 2013-14) and is not the “census day” (October 2, 2013). Eligibility on FRMP has to be reported annually. (BTW, the census day may be a given date, but reporting that data is to be done within a window: October 2 to December 13, 2013.) That one may (or may not be) the census day. Is that complicated enough for you?

  6. Gary Ravani said

    on September 17, 2013 at 4:46 pm

    Please, everyone calm down. Recall the fundamental principle of LCFF is that it simplified the labyrinthian school funding mechanisms that were in place before. Does everyone understand that?

    LCFF is, after all, an effort to deal with one aspect of school reform that is straightforward and lacks complexity, as do all other aspects related to school reform. Please keep that in mind.

  7. Paul said

    on September 21, 2013 at 12:57 am

    The CDE is absolutely right to request annual, individual-level data for low-income students. My impression has always been that, even where school lunch applications are required, verification and audit practices are loose. No school district official wants to be seen as taking food away from a child, and no official spends much time limiting the amount of free money received from a different level of government.

    If communities, districts and families value the extra LCF funding, they will step up and make sure that their paperwork is in order. They will also do so if they care about equitable distribution of the state’s limited public resources.

    Beyond what happens in any individual household, or in the offices of any school district, it will be very important for the CDE to perform a trend analysis. Localized eligibility spikes would probably indicate school district negligence (no verification/audit of individual applications) or fraud (deliberate overcertification), except in the case of verifiable local economic changes, such as plant closures.

  8. CarolineSF said

    on September 21, 2013 at 7:31 am

    Paul, it’s my understanding that it’s not within school districts’ purview to do the verification or audit of individual meal applications — they don’t (and aren’t expected to) have the resources or the mechanism. The California Department of Education does that, if I’m understanding correctly.

    Many school districts have trouble getting kids who ARE qualified to eat the school lunches; the problem really isn’t meal-application fraud.

    • Manuel replied

      on September 21, 2013 at 9:20 am

      The truth is somewhere in between.

      Until recently, there was no scramble at LAUSD. Almost all schools got some Title I money (out of 697 school, 56 schools did not get funds for 2011-12; these schools had 6,727 eligible students out of a total eligible population of 430,038 and were all in reasonably well to do areas).

      But when the ARRA money went away, that reduced the entitlement, politics got into the act and 23 schools were denied funds by moving the lower limit of the poverty band to 50%.

      8 of these schools became “affiliated” charters and got a block grant to make up the loss but the others could not and got some EIA/EDY funds for a year.

      Now we are at year 3 of the mad scramble to sign up at least 50% of the students and things are looking bleak because of bureaucratic snafus and an arbitrary deadline. Advocate parents in many schools’ PTAs and/or Booster Clubs have been forced to pester other parents to sign up because the local administrators are overwhelmed with other duties.

      As far as LAUSD parents know, the applications are checked by LAUSD staff for “eligibility.” Whether they do verification is another story but I don’t think they do. They simply take the parents’ statements in the application as true.

      Given this turmoil, the schools that are in the 50% border will have problems every year to qualify.

      As I wrote above, this insanity has led many parents to question if this is also going to happen with LCFF. In fact, I’ve heard parents at public meetings complain that their schools’ success is being punished by their funds being reduced to give to less successful schools. In a way, they are right as LAUSD has decided to fund schools only at the level mandated by the Ed Code. Needless to say, it is a bare-bones approach that has reduced drastically the budgets in all schools except those getting Title I funds. Why? Because the Title I funds supplant funds that the District used to provide. And there are rumors that an audit is coming.

      The District has managed to escape public criticism by claiming that the state owes $2.5 billion over the last five years and, surely, you expect us to reflect this in the local school budget. Funny thing is, the total operating funds have remained almost constant while total enrollment has declined. This, dear reader, is why you do creative accounting made possible by a good PR department and an unquestioning local media.

      But, hey, LCFF is here and, as Gary sagely states, it should simplify the labyrinthian school funding mechanism we have had until now. Right? Right? Say “Amen” somebody!

  9. navigio said

    on September 21, 2013 at 2:51 pm

    It’s horrible that a school would covert to a charter for no other reason than to increase its funding. It’s even worse that a district led by a decidedly pro-charter superintendent would implement policy that makes that conversion lucrative. Sad when funding drivers become more important than pegagogical ones.

    • Manuel replied

      on September 22, 2013 at 4:29 pm

      It is worse now.

      District 3 of LAUSD serves a good chunk of the West San Fernando Valley. Based on 2012-13 enrollment and counting independent charters, there are about 28,853 high school students. 16,800 of them are in independent charters (Granada Hills, Birmingham, El Camino Real, Chatsworth, and Cleveland). Two of these schools went charter in 2013-14, I suspect, because they got tired of paying the high overhead that LAUSD carries, not because of its aging physical plant but because of how it runs itself (for example: the LAUSD PD has been budgeted to get $57 million during 2013-14).

      Given that charters can institute disciplinary practices that often results in the student transferring out, where do you think these “problem” students will end up?

      The fact that nearly 60% of high school students are in independent charters is grotesque and symptomatic that something is terribly wrong.

      • Manuel replied

        on September 22, 2013 at 4:42 pm

        Ooops. The last sentence should read:

        The fact that nearly 60% of high school students in this large area are in independent charters is grotesque and symptomatic that something is terribly wrong.

        • el replied

          on September 23, 2013 at 8:32 am

          I think it’s more evidence that LAUSD is just too large. I don’t think a governing board can effectively oversee 700+ schools and manage the district to the benefit of all of them. I am not an LAUSD parent and have no say, but it seems to me that much of the reason parents are interested in charters is to create a more manageable access to governance.

          Imagine if just one person from each school wanted to make a 3 minute public comment at a board meeting.

          • Manuel replied

            on September 23, 2013 at 10:52 am

            I have to disagree, el.

            What I have observed is that the changes to charters are made purely because of budgetary matters and due to a belief that the principal, with help from a handful of teachers and parents and outside management companies can run the school better than LAUSD. (This creates other problems, but I won’t go into that.)

            This is what happened at Granada Hills and provided a template. Birmingham tried to copy it and was not as successful, I hear. El Camino jumped next with Chatsworth and Cleveland following this year.

            I know that other high schools considered doing it but did not because they are magnets and depend on transportation for their existence. They saw what happened elsewhere and it was a case of “killing the chicken to scare the monkey.” For instance, the magnet at Granada Hills was quietly folded into the school and I have no idea how the kids who were taking the bus get there. But this did not affect their enrollment as they have a wait list. Maybe that will happen at Cleveland.

            From what I know, parents have not much say on how these schools are run, unless they are in cahoots with the principal as some horror stories making the rounds through the grapevine say. So, no, I don’t think it is an issue of having access to governance.

            Parents go along until their kid gets counseled out or outright expelled. I guess push-back will happen when that reaches a critical mass.

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