Dive Brief:

• The California Department of Education has ruled that the Los Angeles Unified School District has misattributed $450 million in contributions meant for special ed and high-need students under the state's Local Control Funding Formula, instead of one or the other.
• The state's new report, released May 27, indicates that low-income students, English learners and foster children were adversely impacted by LAUSD's wrongful double attribution of the same expenditure; the district has been ordered to revamp its school budget to provide additional services for high-need students in 2016-17, Ed Source reports.
• For its part, LAUSD is claiming that no error was made, and that its interpretation of how to allocate funding was correct.

Dive Insight:

The mistake apparently made by the district seems to be steeped in an interpretation of how, exactly, California's new Local Control Funding Formula (LCFF) should be carried out. The formula, which was passed by Gov. Jerry Brown in 2013, guides school funding and accountability by defining eight metrics by which the state's schools can be ranked and evaluated. Yet the LCFF contains some flexibility, and it's been widely touted as a successful way to funnel more state money to disadvantaged students than just federal Title I dollars earmarked for spending on low-income, ELL, and students from foster homes.

It's likely that other districts could make similar errors as states scramble to create and execute new funding and accountability guidelines as new Every Student Succeeds Act guidance, which allows for more flexibility, is implemented. Significantly, one change related to how federal spending works under ESSA grants districts the ability to apply for waivers from states to use Title I money, regardless of the percentage of low-income students. Many are also questioning the flexibility and possibly burden on districts offered by the new guidance within ESSA's "supplement not supplant" guidelines. Without a careful consideration around accountability, suits like the one filed by the ACLU and Public Advocates that led to California's new decision around the district's alleged misuse of funds could become more common.