Governor wants California school districts to give more detail on use of state funds in budgets

Gov. Brown presents his proposed his FY2019 state budget on Jan. 10, 2018 in Sacramento.
Paul Chinn / San Francisco Chronicle / Polaris

In an effort to make it easier to see how school districts in California are spending their funds to improve education outcomes, Gov. Jerry Brown wants to require school districts to publish in their annual budgets a summary of the funds they plan to spend on low-income children, English learners and other high-needs students.

His proposal is contained in what is called the Omnibus Education Trailer Bill issued by the state’s Department of Finance, published last week. The bill is intended to implement key sections of Brown’s proposed budget for the coming fiscal year. The Legislature would have to approve the trailer bill when it approves a final budget, probably sometime in June.

But the seemingly straightforward proposal has raised concerns among school district administrators that it will create an unnecessary extra bureaucratic requirement  without contributing to greater transparency in how state funds are spent.

Under landmark reforms championed by Brown, school districts receive additional funds depending on the number of low-income students, English learners, foster and homeless children they enroll. They are then required to draw up a Local Control and Accountability Plan, known as an LCAP, outlining their goals and how they will spend state funds to achieve them.

Department of Finance officials said the summary document Brown has in mind is simply designed to help parents and other laypersons better understand a district’s budget and to link it to the district’s accountability plan. “This way a layperson will be able to see a district’s budgeted resources in a simple, summarized manner,” said Jeff Bell, the department’s program budget manager for education.

Ever since they were introduced, the reforms have evoked considerable criticism from advocates and others who argue that it is not possible to easily follow how local school districts are spending funds intended for high needs-students. An additional challenge is that LCAPs have typically grown into voluminous documents, sometimes running into the hundreds of pages, and are often written in dense education jargon.

In a process familiar to every school business officer, school districts must draw up an annual budget using a uniform financial format commonly referred to as SACS (Standard Accounting Code Structure). State Board of Education President Michael Kirst said that one fundamental problem is the lack of transparency in the broad budget categories themselves that districts are required to use when reporting expenditures to the state. 

“The underlying categories for budgeting and auditing are really big buckets that don’t tell you a whole lot,” said Kirst last Friday at a conference organized by Policy Analysis for California Education, or PACE, a consortium that includes Stanford University, UC Davis and the University of Southern California. He said these categories cover very general budget items like “instruction,” “administration,” and “facilities.” Kirst said those are “huge buckets of inputs” that make it difficult to track how funds are actually spent.

Addressing concerns about transparency, Kirst rejected the notion that state government is purposely trying to hide how funds are spent. Rather, he said, “We don’t have much to work with in terms of the underlying budget categories” that make it difficult to identify specific expenditures in a district’s budget.

David Plank, PACE’s executive director, said that “developing a new system that provides greater transparency is a matter of great urgency, but it will also be a major challenge that requires cooperation from a variety of state agencies, including the Department of Finance, to resolve.”

Leilani Aguinaldo, director of governmental relations for School Services of California, a leading consulting firm that works with school districts around the state, said many administrators are apprehensive about the proposed new requirements. “There is a belief that there is already a lot of transparency, so it is not clear what the added transparency is that you will be getting with this additional document,” she said, referring to the summary document called for in the trailer bill.

“It does seem fairly redundant, so districts are very curious to see how this plays out at the state board level, and to see what the template (for the document) looks like,” she said.

Her view was echoed by Eric Dill, superintendent of the San Dieguito Union High School District in San Diego County. “I think the LCAP does a nice job in aligning budgeted expenditure to mirror the goals and actions that follow the state priorities,” he said. “Another summary document doesn’t seem necessary when everything is spelled out in the LCAP.”

Dill, a former school business officer, worried that a summary document might be helpful to some but not to others because it will have to compress too much complex information into a very brief format. “We get criticized if we provide summaries, and we get criticized if we provide too much detail,” he said.

Jennifer O’Day, a fellow at the American Institutes for Research and chair of the California Collaborative on District Reform, said that “finding ways to increase transparency is important.”

“I agree that the LCAP in most districts does not provide a very transparent view, not only of planned expenditures but of the overall approach and plan for the district as a whole,” said O’Day, who has co-authored several reports on the implementation of the new reforms. She said the state’s accounting codes “make it very difficult for districts to align — or at least to demonstrate alignment of — budgets and expenditures to the goals in their LCAPs.”

At the same time, she said it wasn’t clear “how the proposed language (in the trailer bill) actually goes beyond the information that is already required in the LCAP.” She worried that it would simply “add an extra bureaucratic step for local districts without meeting their stakeholders’ needs for transparency.”

However, the Department of Finance’s Bell said the summary document Brown is proposing “is not intended to re-create the wheel, or to create a significant additional workload.”

“All it is intended to do is ensure that we have a summary link between the budget that is passed and the Local Control and Accountability Plan,” he said.

 

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