FOR IMMEDIATE RELEASE                                               
July 11, 2019


Isabel Alegría, Public Advocates;, 415.431.7434; 510.541-5428
Duc Luu, Public Advocates:, 415.625.8460; 857.373.9118
Alexandra Patchen, Covington & Burling LLP:, 1.212.841.1102

New Complaint Claims LAUSD Not Accounting for Billions in Funds Earmarked for High Need Students
After 2017 settlement of funding lawsuit, Los Angeles school district facing new charges under CA school finance reform law

SAN FRANCISCO, CA — Parents of children in the Los Angeles Unified School District (LAUSD) filed a complaint today with the CA Department of Education (CDE) charging the district with improper accounting and reporting practices involving more than $2 billion in state education funds intended to serve low-income students, English language learners and foster youth. The expenditures of state “supplemental and concentration” funds are reported through annual spending plans that undergo community review and that by law must demonstrate how the funds are used and how they will support the district’s high need students. The complaint raises serious questions about LAUSD’s spending plans for the 2018-19 and 2019-20 school years, some of which were echoed by the district’s own board members in approving the latest plan on June 18th.  Even after the public vetting and approval of this plan, ten days later LAUSD posted a new LCAP with substantial alterations that included radically diluting a Foster Youth program—all of this in total disregard of the LCFF-mandated public review process.

Public Advocates Inc. and the law firm Covington & Burling LLP, which is handling the matter pro bono, have filed the complaint on behalf of LAUSD parents Elvira Velasco and Ana Carrion. “The district isn’t respecting how the LCAP should be done to strengthen local control,” said Mrs. Carrion whose 12-year-old son attends public school in Los Angeles. “To make LCFF really transform our schools, the district has to be transparent about its spending, and they must trust us, the parents, to have something valuable to contribute,” she said, “Transparency, trust and transformation—that’s what I want from this complaint.”

Under LCFF, the state’s new school funding law, low-income students, English learners and foster youth generate significant additional “supplemental and concentration” funds (or S&C) for districts like LAUSD that have large concentrations of such students. In exchange, the law requires they use those funds to increase or improve services for the students who generated them. The actions undertaken must be specifically identified in annual spending plans and must be properly justified as principally directed and effective in meeting the district’s goals for high need students in most instances.

The complaint points out multiple violations of the law including the following:

  • The annual LCAPS from both 2019-20 and 2018-19 fail to demonstrate the district is meeting its overall obligation to increase or improve services for high need students by 32% a year or the equivalent of approximately $1.1 billion annually. Rather than improving, this year’s LCAP does an even worse job of justifying how LAUSD is meeting legal requirements for S&C funds than prior years. If the district does not demonstrate its funds are principally serving high need students, it could lose entitlement to them or need to reallocate them toward more targeted uses.
  • In violation of the law, LAUSD has “bundled” numerous and varied types of services and their associated expenditures under very vague “mega-actions,” which prevent the public from seeing what specific actions the district is undertaking, how much is spent on each and whether the actions can be legally justified. In its current LCAP, one broad “School Autonomy” action listed by the district alone accounts for the spending of $880 M in funds. That one item constitutes 9% of all of California’s S&C funds yet is vaguely described and legally justified with only 3 summary lines of text.
  • LAUSD passed more than $464 million of S&C funds in the 2019-20 school year down to school sites for locally-determined uses. Though the practice is perfectly lawful in concept, LAUSD’s implementation violates the law by again failing to show what specific actions are being pursued with those funds, at what cost and if they are legal. LAUSD fails to even identify which schools are receiving the funds.

“LA gets more than a billion a year to target on high need students, which is 12% of all the supplemental and concentration funds in the state,” said John Affeldt a Managing Attorney at Public Advocates and lead counsel. “Yet they do about the worst job of any district in showing how they are using those funds to support these students. We suspect they are underspending on high need students by hundreds of millions of dollars a year. It’s time for LAUSD to get its house in order and gain back some public confidence,” said Affeldt.

The complaint also alleges that LAUSD has inflated what it spends on high need students by having slipped into past spending plans and rolled forward some $340 million of undisclosed expenditures. This practice began in 2017 when the district unilaterally reclassified a host of expenditures in its LCAP as supporting high need students which previously had been deemed core program services for all students. The district’s “realignment” was its response to having been prohibited from misallocating some $450 M of S&C funds annually on special education services by the California Department of Education and a lawsuit settlement brought by Public Advocates, Covington and the ACLU.

The district has rolled its realignment reclassifications forward every year without ever disclosing to the public what actual services those funds support or demonstrating their use as principally directed to high need students as state law requires. “That’s a quarter of LAUSD’s obligation to increase to improve services for high need students accomplished by sleight of hand,” Nicole Ochi, a Public Advocates senior staff attorney observed.  “LAUSD is consistently hiding the ball with its equity dollars to the detriment of hundreds of thousands of low-income students of color who desperately need more targeted investments to unleash their full potential, she said.”

“We are once again at a crossroads where the heart of the law – community engagement, transparency and a strict adherence to the way the district must justify its’ expenditures—is threatened by LAUSD’s actions,” said Laura Muschamp, attorney with Covington & Burling. “LAUSD needs to remedy this situation quickly and thoroughly by fully complying with LCFF regulations.”

The complaint calls for LAUSD to:

  • Amend its 2019-20 LCAP by individually identifying each action and service under School Autonomy and other bundled actions and their associated expenditures,
  • Justify separately all actions funded by S&C funds as properly serving high need students,
  • Identify and justify or remove all the actions that constitute the $340 million of undisclosed “reclassified” actions
  • Identify which schools receive special allocations of S&C funds, the specific actions being undertaken with those funds and at what cost and justify their use as serving high need students.

The complaint that was filed today with the California Department of Education asks, by way of a special procedure, for immediate intervention so that the district’s LCAP can be put in order by the start of the upcoming school year.

The complaint also alleges similar legal violations against the Los Angeles County Office of Education (LACOE), asserting that the county has failed to ensure LAUSD follows the law each year by approving the district’s LCAP without enforcing LCFF’s legal requirements.


A copy of the complaint can be found here.
Complaint exhibits can be found here.

Public Advocates Inc. is a nonprofit law firm and advocacy organization that challenges the systemic causes of poverty and racial discrimination by strengthening community voices in public policy and achieving tangible legal victories advancing education, housing and transit equity.

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