AB 84: School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, networks, and contracting: data systems: local educational agency contractor background checks and contracting.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2025-09-09
Current Status:
In Progress
(2025-09-12: Ordered to inactive file at the request of Senator Grayson.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Controller or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay. The bill would require a local educational agency to post the local educational agencys annual financial and compliance audits on its internet website.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made, as referenced above, and would require notification to applicable entities to be made within 6 months of the audit report due date or the audit report issue date, whichever is later. The bill would require the Controller to establish and publish as part of the audit guide a weighted risk-based criteria that considers auditor experience and quality factors in determining which audit engagements are required to undergo a quality control review, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities.
The bill, commencing with the 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits and an appendix with the Controllers desk review checklist that is used to determine whether audit reports are in conformance with specified reporting requirements, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by a local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies.
In order to be added to, or remain on, the Controllers directory of certified public accountants and public accountants as described above, the bill would require, commencing with the 202728 fiscal year, and every 2 years thereafter, audit engagement partners and certified public accountants or public accountants responsible for local educational agency audits to, among other things, complete 16 hours of continuing education, demonstrate specified experience, and maintain compliance with the California Board of Accountancy requirements to keep applicable licenses in active status and good standing, as provided. The bill would also apply the continuing education requirement to audit staff who perform audit procedures of local educational agencies.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. General. The bill would provide for the appointment of the Education Inspector General by the Governor, Governor from a list of 3 qualified individuals nominated by the Joint Legislative Audit Committee, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to to, among other things, (A) conduct and supervise forensic audits and investigations relating to of the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, state special schools, and entities managing charter schools, schools related to fraud, misappropriation of funds, and other illegal practices and (B) provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department, local educational agencies, and entities managing charter schools, and (C) provide a means for keeping the State Board of Education and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing charter schools and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate. annually report to the appropriate policy committees of the Legislature on investigations and audits of the programs and operations of the department, local educational agencies, and entities managing a charter school.
(3)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website.
This bill would require teachers employed by a local educational agency and offering certain courses to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
(4)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(5)Existing law requires the Superintendent, if, during any fiscal year, the amount apportioned to a school district or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district or fund was entitled by an amount equal to the local control funding formula allocation for one unit of average daily attendance, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, to withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess of deficiency, as the case may be.
This bill would require the Superintendent to apply the above-described provisions to county offices of education and charter schools. If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation for one or more units of average daily attendance, the bill would require the local educational agency to report the corrected amount to the Superintendent. To the extent the bill would impose additional duties on a local educational agency, the bill would impose a state-mandated local program.
Existing law requires state funding to be calculated and withheld from a school district or county office of education for any fiscal year in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, as provided.
The bill would apply the above-described provisions relating to the penalties for a person rendering services as a teacher who does not have a valid certification document to charter schools, as provided.
(6)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
Commencing July 1, 2028, the bill would require each chartering authority to annually (A) verify to, with respect to each charter school under its authority, (A) annually review specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools, (B) notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data, review the agenda and minutes of the meetings of the governing body of the charter school, (C) annually attend a at least one meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, as specified, and (D) monitor payments of charter schools to verify that the payments are legal and have proper authorization, as provided. identify and provide notification to the governing body of the charter school of any material concern arising out of the chartering authoritys ongoing oversight and monitoring activities.
The bill would require authorize the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations regulations, including emergency regulations, to require charter schools to report prepare periodic and annual financial data in the same manner and on the same form prescribed for school districts. districts, as provided. The bill would phase in, from the 202627 202829 fiscal year to the 202829 203031 fiscal year, inclusive, and based on the average daily attendance of the charter school and whether the charter school is a nonclassroom-based charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts, as provided.
The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would prohibit a school district with an average daily attendance of fewer than 10,000 pupils from authorizing one or more nonclassroom-based charter schools or approving a material revision to expand one or more nonclassroom-based charter schools if doing so would result in more than a totality of 100% of the average daily attendance of the school district and would create an exception for a nonclassroom-based charter school in operation on or before December 31, 2025, that exceeds that limitation if, as of December 31, 2025, certain requirements are met.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities.The bill would require charter schools to obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than $100,000 in a fiscal year.
Existing law requires the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, as defined, to be adjusted by the state board, as provided.
This bill would revise and recast those provisions by, among other things, requiring the above-described determination for funding to instead be on a percentage basis and requiring the Superintendent of Public Instruction to implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board, as provided. The bill would require charter schools to adhere to specified criteria when submitting a funding determination request, as provided. The bill would require the Superintendent to notify the chartering authority of a charter school that is maintaining an unassigned fund balance for economic uncertainties that is 5% or less of the charter schools annual expenditures.
Beginning with the 202728 school year, the bill would require the State Department of Education to annually develop a list that identifies networks of nonclassroom-based charter schools, as defined, based on data from the prior school year.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(7)This bill would establish the Chartering Authority Mentor Grant Program to be administered by the Superintendent for the purpose of providing chartering authority mentors with grants to provide technical assistance to eligible chartering authorities of charter schools.
The bill would establish the Charter School Authorizer Grant Program within the department to provide grants to chartering authorities for certain increased costs associated with the responsibilities imposed by this bill, as provided.
The bill would establish the Charter School Standardized Account Code Structure Grant Program within the department to provide grants of up to $50,000 per charter school that has not fully implemented the Standardized Account Code Structure as of June 30, 2025, as provided.
(7)(8)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law authorizes a local educational agency to claim apportionment credit for independent study only to the extent of the time value of pupil work products. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided. The bill would require a local educational agency to maintain one completed pupil work product in each of 4 specified subjects for a pupil enrolled in independent study for each of 3 specified attendance periods, except as provided.
The bill would require the governing board or body of a school district, educational joint powers authority, county office of education, or charter school, on or before July 1, 2027, to adopt a policy in order to evaluate and approve contractors. The bill would require the policy to include specified provisions, including, among other things, that a local educational agency is prohibited from (A) expending public funds for a contract unless the materials, programs, and activities are nonsectarian, (B) offering financial payments or gifts as an incentive for pupil enrollment, referral, or retention, and (C) purchasing or contracting for season passes or membership to amusement or theme parks, zoos, or family entertainment activities, except as provided.
(8)(9)Existing law requires any entity that has a contract with a school district, county office of education, or charter school to ensure that any employee who interacts with pupils, outside of the immediate supervision and control of the pupils parent or guardian or a school employee, has a valid criminal records summary, as specified.
This bill would require an entity that has a contract with a local educational agency to instead ensure any employee who interacts with pupils has a valid criminal records summary without regard to whether the interaction takes place outside of the immediate supervision and control of the pupils parent or guardian or a school employee.
(9)(10)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Superintendent of Public Instruction Controller or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay. The bill would require a local educational agency to post the local educational agencys annual financial and compliance audits on its internet website.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made made, as referenced above. The bill would require the Controller, in performing quality control reviews, to ensure, among other things, that the selection of audits for each auditor is representative of each type of local educational agency, as provided. above, and would require notification to applicable entities to be made within 6 months of the audit report due date or the audit report issue date, whichever is later. The bill would require the Controller to establish and publish as part of the audit guide a weighted risk-based criteria that considers auditor experience and quality factors in determining which audit engagements are required to undergo a quality control review, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities. The bill would require the Controller to conduct a quality control review after an authorized certified public accountant or public accountant, as specified, completes its first local educational agency financial statement and compliance audit or completes its first audit after 3 or more years of not having completed an audit, as provided. The bill would require the Controller, if an independent auditor has not engaged in financial or compliance audits for 3 or more consecutive years, to conduct a quality control review after the auditor completes the first financial or compliance audit.
The bill, commencing with the 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits, audits and an appendix with the Controllers desk review checklist that is used to determine whether audit reports are in conformance with specified reporting requirements, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and in good standing as certified by the California Board of Accountancy. selected by a local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies.
TheIn order to be added to, or remain on, the Controllers directory of certified public accountants and public accountants as described above, the bill would require, commencing with the 202728 fiscal year, and every 2 years thereafter, audit engagement partners and certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies to have completed 24 accountants responsible for local educational agency audits to, among other things, complete 16 hours of continuing education, to have certified prior demonstrate specified experience, and to have been peer reviewed by maintain compliance with the California Board of Accountancy, Accountancy requirements to keep applicable licenses in active status and good standing, as provided. The bill would also apply the continuing education requirement to audit staff who perform audit procedures of local educational agencies.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law, whenever in the Education Code the power to contract is invested in the governing board of a school district or any member thereof, authorizes that power, by a majority vote of the governing board, to be delegated to its district superintendent, or to any persons the district superintendent may designate, or if there is no district superintendent, to any other officer or employee of the district that the governing board may designate, as specified.This bill would add a similar provision relating to charter school governing bodies and charter school officials that may be designated by those governing bodies in that instance.(3)(2)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. The bill would provide for the appointment of the Education Inspector General by the Governor, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to (A) conduct and supervise audits and investigations relating to the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, state special schools, and entities managing charter schools, (B) provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department, local educational agencies, and entities managing charter schools, and (C) provide a means for keeping the State Board of Education and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing charter schools and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate.
(4)(3)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website.
This bill would require teachers of employed by a local educational agency and offering certain courses offered by a local educational agency to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
(5)(4)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(6)(5)Existing law requires the Superintendent, if, during any fiscal year, the amount apportioned to a school district or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district or fund was entitled by an amount equal to the local control funding formula allocation for one unit of average daily attendance, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, to withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess of deficiency, as the case may be.
This bill would require the Superintendent to apply the above-described provisions to county offices of education and charter schools. If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation for one or more units of average daily attendance, the bill would require the local educational agency to report the corrected amount to the Superintendent. To the extent the bill would impose additional duties on a local educational agency, the bill would impose a state-mandated local program.
Existing law requires the governing board of a school district, the governing body of a charter school, and a county board of education, except as provided, to use specified moneys apportioned to the local educational agency during any fiscal year exclusively for the support of the schools of the local educational agency for that year. Existing law requires the governing board of a school district to expend a specified minimum proportion of the school districts current expense of education, as defined, during each fiscal year for payment of salaries of classroom teachers, as provided. Existing law requires state funding to be calculated and withheld from a school district or county office of education for any fiscal year in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, as provided.
The bill would apply the above-described provisions relating to the payment of salaries of classroom teachers and penalties for a person rendering services as a teacher who does not have a valid certification document to charter schools, as provided.
(7)(6)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
Commencing July 1, 2028, the bill would require each chartering authority to annually (A) verify specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools, (B) notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data, (C) attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and (D) monitor payments of charter schools to verify that the payments are legal and have proper authorization, as provided.
The bill would require the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations to require charter schools to report periodic and annual financial data in the same manner and on the same form prescribed for school districts. The bill would phase in, from the 202627 fiscal year to the 202829 fiscal year, inclusive, and based on the average daily attendance of the charter school and whether the charter school is a nonclassroom-based charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts, as provided.
The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would prohibit a school district with an average daily attendance of fewer than 10,000 pupils from authorizing one or more nonclassroom-based charter schools or approving a material revision to expand one or more nonclassroom-based charter schools if doing so would result in more than a totality of 100% of the average daily attendance of the school district and would create an exception for a nonclassroom-based charter school in operation on or before December 31, 2025, that exceeds that limitation if, as of December 31, 2025, certain requirements are met.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities.
On and after July 1, 2026, the bill would require charter schools to comply with specified requirements relating to the expenditure of public funds for the payment of contractors, and would require the extent of the charter schools compliance with these requirements to be reviewed and reported as part of the annual, independent financial audit that the charter school is required to submit. The bill would require charter schools to obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than $100,000 in a fiscal year.
Existing law requires the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, as defined, to be adjusted by the state board, as provided.
This bill would revise and recast those provisions by, among other things, requiring the above-described determination for funding to instead be on a percentage basis and requiring the Superintendent of Public Instruction to implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board, as provided. The bill would require charter schools to adhere to specified criteria when submitting a funding determination request, as provided. The bill would require the Superintendent to notify the chartering authority of a charter school that is maintaining an unassigned fund balance for economic uncertainties that is 5% or less of the charter schools annual expenditures.
Beginning with the 202728 school year, the bill would require the State Department of Education to annually develop a list that identifies networks of nonclassroom-based charter schools, as defined, based on data from the prior school year.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(8)(7)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law authorizes a local educational agency to claim apportionment credit for independent study only to the extent of the time value of pupil work products. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided. The bill would require a local educational agency to maintain one completed pupil work product in each of 4 specified subjects for a pupil enrolled in independent study for each of 3 specified attendance periods, except as provided.
The bill would prohibit a local educational agency from allocating, or advertising the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are (A) not provided by a credentialed employee of the local educational agency for the pupil and (B) are paid for by the local educational agency.The bill would require the governing board or body of a school district, educational joint powers authority, county office of education, or charter school, on or before July 1, 2027, to adopt a policy in order to evaluate and approve contractors. The bill would require the policy to include specified provisions, including, among other things, that a local educational agency is prohibited from (A) expending public funds for a contract unless the materials, programs, and activities are nonsectarian, (B) offering financial payments or gifts as an incentive for pupil enrollment, referral, or retention, and (C) purchasing or contracting for season passes or membership to amusement or theme parks, zoos, or family entertainment activities, except as provided.
(9)(8)Existing law requires any entity that has a contract with a school district, county office of education, or charter school to ensure that any employee who interacts with pupils, outside of the immediate supervision and control of the pupils parent or guardian or a school employee, has a valid criminal records summary, as specified.
This bill would require an entity that has a contract with a local educational agency to instead ensure any employee who interacts with pupils has a valid criminal records summary without regard to whether the interaction takes place outside of the immediate supervision and control of the pupils parent or guardian or a school employee.
(10)(9)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Superintendent of Public Instruction or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made as referenced above. The bill would require the Controller, in performing quality control reviews, to ensure, among other things, that the selection of audits for each auditor is representative of each type of local educational agency, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities. The bill would require the Controller to conduct a quality control review after an authorized certified public accountant or public accountant, as specified, completes its first local educational agency financial statement and compliance audit or completes its first audit after 3 or more years of not having completed an audit, as provided. The bill would require the Controller, if an independent auditor has not engaged in financial or compliance audits for 3 or more consecutive years, to conduct a quality control review after the auditor completes the first financial or compliance audit.
The bill, commencing with the 202627 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and in good standing as certified by the California Board of Accountancy.
The bill would require, commencing with the 202627 202728 fiscal year, and every 2 years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies to have completed 24 hours of continuing education, to have certified prior experience, and to have been peer reviewed by the California Board of Accountancy, as provided.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law, whenever in the Education Code the power to contract is invested in the governing board of a school district or any member thereof, authorizes that power, by a majority vote of the governing board, to be delegated to its district superintendent, or to any persons the district superintendent may designate, or if there is no district superintendent, to any other officer or employee of the district that the governing board may designate, as specified.
This bill would add a similar provision relating to charter school governing bodies and charter school officials that may be designated by those governing bodies in that instance.
(3)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. The bill would provide for the appointment of the Education Inspector General by the Governor, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to (A) conduct and supervise audits and investigations relating to the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, state special schools, and entities managing charter schools, (B) provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department, local educational agencies, and entities managing charter schools, and (C) provide a means for keeping the State Board of Education and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing charter schools and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate.
(4)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website. Existing law specifies that, for these purposes, in a charter school, misassignment applies only to employees in teaching positions.
This bill would delete the provision that limits the application of misassignment in charter schools only to employees in teaching positions. The bill would require teachers of certain courses offered by a local educational agency to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
(5)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(6)Existing law requires the Superintendent, if, during any fiscal year, the amount apportioned to a school district or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district or fund was entitled by an amount equal to the local control funding formula allocation for one unit of average daily attendance, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, to withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess of deficiency, as the case may be.
This bill would require the Superintendent to apply the above-described provisions to county offices of education and charter schools. If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation for one or more units of average daily attendance, the bill would require the local educational agency to report the corrected amount to the Superintendent. To the extent the bill would impose additional duties on a local educational agency, the bill would impose a state-mandated local program.
Existing law requires the governing board of a school district, the governing body of a charter school, and a county board of education, except as provided, to use specified moneys apportioned to the local educational agency during any fiscal year exclusively for the support of the schools of the local educational agency for that year. Existing law requires the governing board of a school district to expend a specified minimum proportion of the school districts current expense of education, as defined, during each fiscal year for payment of salaries of classroom teachers, as provided. Existing law requires state funding to be calculated and withheld from a school district or county office of education for any fiscal year in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, as provided.
The bill would apply the above-described provisions relating to the payment of salaries of classroom teachers and penalties for a person rendering services as a teacher who does not have a valid certification document to charter schools, as provided.
(7)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
Commencing July 1, 2028, the bill would require each chartering authority to annually (A) verify specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools, (B) notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data, (C) attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and (D) monitor payments of charter schools to verify that the payments are legal and have proper authorization, as provided.
The bill would require the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations to require charter schools to report periodic and annual financial data in the same manner and on the same form prescribed for school districts. The bill would phase in, from the 202627 fiscal year to the 202829 fiscal year, inclusive, and based on the average daily attendance of the charter school and whether the charter school is a nonclassroom-based charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts, as provided.
The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would prohibit a school district with an average daily attendance of fewer than 10,000 pupils from authorizing one or more nonclassroom-based charter schools or approving a material revision to expand one or more nonclassroom-based charter schools if doing so would result in more than a totality of 100% of the average daily attendance of the school district and would create an exception for a nonclassroom-based charter school in operation on or before December 31, 2025, that exceeds that limitation if, as of December 31, 2025, certain requirements are met.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities.
On and after July 1, 2026, the bill would require charter schools to comply with specified requirements relating to the expenditure of public funds for the payment of contractors, and would require the extent of the charter schools compliance with these requirements to be reviewed and reported as part of the annual, independent financial audit that the charter school is required to submit. The bill would require charter schools to obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than $100,000 in a fiscal year.
Existing law requires the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, as defined, to be adjusted by the state board, as provided.
TheThis bill would, beginning July 1, 2026, revise and recast provisions of the act relating to the reporting of average daily attendance by charter schools, and would distinguish between the determination of funding for charter schools that offer less than 75% of instructional time at the schoolsite and require the attendance of all pupils for less than 75% of the minimum instructional time required to be offered and charter schools that offer 75% or more, respectively. would revise and recast those provisions by, among other things, requiring the above-described determination for funding to instead be on a percentage basis and requiring the Superintendent of Public Instruction to implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board, as provided. The bill would require charter schools to adhere to specified criteria when submitting a funding determination request, as provided. The bill would require the Superintendent of Public Instruction to notify the chartering authority of a charter school that is maintaining an unassigned fund balance for economic uncertainties that is 5% or less of the charter schools annual expenditures.
Beginning with the 202728 school year, the bill would require the State Department of Education to annually develop a list that identifies networks of nonclassroom-based charter schools, as defined, based on data from the prior school year.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(8)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided.
The bill would prohibit a local educational agency from allocating, or advertising the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are (A) not provided by a credentialed employee of the local educational agency for the pupil and (B) are paid for by the local educational agency.
(9)Existing law requires any entity that has a contract with a school district, county office of education, or charter school to ensure that any employee who interacts with pupils, outside of the immediate supervision and control of the pupils parent or guardian or a school employee, has a valid criminal records summary, as specified.
This bill would require an entity that has a contract with a local educational agency to instead ensure any employee who interacts with pupils has a valid criminal records summary without regard to whether the interaction takes place outside of the immediate supervision and control of the pupils parent or guardian or a school employee.
(10)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Superintendent of Public Instruction or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made as referenced above. The bill would require the Controller, in performing quality control reviews, to ensure, among other things, that the selection of audits for each auditor is representative of each type of local educational agency, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities. The bill would require the Controller to conduct a quality control review after an authorized certified public accountant or public accountant, as specified, completes its first local educational agency financial statement and compliance audit or completes its first audit after 3 or more years of not having completed an audit, as provided. The bill would require the Controller, if an independent auditor has not engaged in financial or compliance audits for 3 or more consecutive years, to conduct a quality control review after the auditor completes the first financial or compliance audit.
The bill, commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and in good standing as certified by the California Board of Accountancy.
The bill would require, commencing with the 202627 fiscal year, and every 2 years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies to have completed 24 hours of continuing education, to have certified prior experience, and to have been peer reviewed by the California Board of Accountancy, as provided.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law, whenever in the Education Code the power to contract is invested in the governing board of a school district or any member thereof, authorizes that power, by a majority vote of the governing board, to be delegated to its district superintendent, or to any persons the district superintendent may designate, or if there is no district superintendent, to any other officer or employee of the district that the governing board may designate, as specified. Existing law similarly authorizes the designation of school district officers or employees to exercise the authority to purchase supplies, materials, apparatus, equipment, and services on behalf of the district. In the event of malfeasance in office, existing law requires the school district officer or employee invested by the governing board with the power to contract to be personally liable for any and all moneys of the school district paid out as a result of the malfeasance.
This bill would add a similar provisions provision relating to charter school governing bodies and charter school officials that may be designated by those governing bodies in these instances. that instance.
(3)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. The bill would provide for the appointment of the Education Inspector General by the Governor, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to (A) conduct and supervise audits and investigations relating to the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, state special schools, and entities managing charter schools, (B) provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department, local educational agencies, and entities managing charter schools, and (C) provide a means for keeping the State Board of Education and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing charter schools and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate.
(4)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website. Existing law specifies that, for these purposes, in a charter school, misassignment applies only to employees in teaching positions.
This bill would delete the provision that limits the application of misassignment in charter schools only to employees in teaching positions. The bill would require teachers of certain courses offered by a local educational agency to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
(5)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(6)Existing law requires the Superintendent, if, during any fiscal year, the amount apportioned to a school district or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district or fund was entitled by an amount equal to the local control funding formula allocation for one unit of average daily attendance, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, to withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess of deficiency, as the case may be.
This bill would require the Superintendent to apply the above-described provisions to county offices of education and charter schools. If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation for one or more units of average daily attendance, the bill would require the local educational agency to report the corrected amount to the Superintendent. To the extent the bill would impose additional duties on a local educational agency, the bill would impose a state-mandated local program.
Existing law requires the governing board of a school district, the governing body of a charter school, and a county board of education, except as provided, to use specified moneys apportioned to the local educational agency during any fiscal year exclusively for the support of the schools of the local educational agency for that year. Existing law requires the governing board of a school district to expend a specified minimum proportion of the school districts current expense of education, as defined, during each fiscal year for payment of salaries of classroom teachers, as provided. Existing law requires state funding to be calculated and withheld from a school district or county office of education for any fiscal year in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, as provided.
The bill would apply the above-described provisions relating to the payment of salaries of classroom teachers and penalties for a person rendering services as a teacher who does not have a valid certification document to charter schools, as provided.
(7)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
Commencing July 1, 2028, the bill would require each chartering authority to annually (A) verify specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools, (B) notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data, (C) attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and (D) monitor payments of charter schools to verify that the payments are legal and have proper authorization, as provided.
The bill would require the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations to require charter schools to report periodic and annual financial data in the same manner and on the same form prescribed for school districts. The bill would phase in, from the 202627 fiscal year to the 202829 fiscal year, inclusive, and based on the average daily attendance of the charter school and whether the charter school is a nonclassroom-based charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts, as provided.
The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would prohibit a school district with an average daily attendance of fewer than 10,000 pupils from authorizing one or more nonclassroom-based charter schools or approving a material revision to expand one or more nonclassroom-based charter schools if doing so would result in more than a totality of 100% of the average daily attendance of the school district and would create an exception for a nonclassroom-based charter school in operation on or before December 31, 2025, that exceeds that limitation if, as of December 31, 2025, certain requirements are met.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities.
On and after July 1, 2026, the bill would require charter schools to comply with specified requirements relating to the expenditure of public funds for the payment of contractors, and would require the extent of the charter schools compliance with these requirements to be reviewed and reported as part of the annual, independent financial audit that the charter school is required to submit. The bill would require charter schools to obtain the approval of the governing body of the charter school for any contracts, as provided. contract that would cause the charter school to compensate an individual contractor more than $100,000 in a fiscal year.
Existing law prohibits the governing board of a school district from denying a petition to establish a charter school unless it makes written factual findings in support of one or more specific findings including, among others, a finding that the school district is not positioned to absorb the fiscal impact of the proposed charter school.The bill would additionally provide that a school district may demonstrate that the school district is not positioned to absorb that fiscal impact if, for the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district, the school district has exited state receivership and (A) has a qualified interim certification or (B) the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving a charter school would result in the school district having a qualified or negative interim certification, as provided.The bill would, beginning July 1, 2026, revise and recast provisions of the act relating to the reporting of average daily attendance by charter schools, and would distinguish between the determination of funding for charter schools that offer less than 75% of instructional time at the schoolsite and require the attendance of all pupils for less than 75% of the minimum instructional time required to be offered and charter schools that offer 75% or more, respectively. The bill would require charter schools to adhere to specified criteria when submitting a funding determination request, as provided. The bill would require the Superintendent of Public Instruction to notify the chartering authority of a charter school that is maintaining an unassigned fund balance for economic uncertainties that is 5% or less of the charter schools annual expenditures.
Beginning with the 202728 school year, the bill would require the State Department of Education to annually develop a list that identifies networks of nonclassroom-based charter schools, as defined, based on data from the prior school year.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(8)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided.
The bill would prohibit a local educational agency from allocating, or advertising the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are (A) not provided by a credentialed employee of the local educational agency for the pupil and (B) are paid for by the local educational agency.
(9)Existing law requires any entity that has a contract with a school district, county office of education, or charter school to ensure that any employee who interacts with pupils, outside of the immediate supervision and control of the pupils parent or guardian or a school employee, has a valid criminal records summary, as specified.
This bill would require an entity that has a contract with a local educational agency to instead ensure any employee who interacts with pupils has a valid criminal records summary without regard to whether the interaction takes place outside of the immediate supervision and control of the pupils parent or guardian or a school employee.
(10)The Local Agency Public Construction Act regulates, among other things, the letting of contracts by school district governing boards involving an expenditure of more than $50,000 for specified purposes, including the purchase of equipment, materials, or supplies to be furnished, sold, or leased to the district, services other than construction services, and repairs, including maintenance, as defined.This bill would extend to charter schools the provisions of the act that currently apply to school districts. To the extent the bill would impose additional duties on charter schools, the bill would impose a state-mandated local program.(11)(10)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Superintendent of Public Instruction or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made as referenced above. The bill would require the Controller, in performing quality control reviews, to ensure, among other things, that the selection of audits for each auditor is representative of each type of local educational agency, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities. The bill would require the Controller to conduct a quality control review after an authorized certified public accountant or public accountant, as specified, completes its first local educational agency financial statement and compliance audit or completes its first audit after 3 or more years of not having completed an audit, as provided. The bill would require the Controller, if an independent auditor has not engaged in financial or compliance audits for 3 or more consecutive years, to conduct a quality control review after the auditor completes the first financial or compliance audit.
The bill, commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and in good standing as certified by the California Board of Accountancy.
The bill would require, commencing with the 202627 fiscal year, and every 2 years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies to have completed 24 hours of continuing education, to have certified prior experience, and to have been peer reviewed by the California Board of Accountancy, as provided.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law, whenever in the Education Code the power to contract is invested in the governing board of a school district or any member thereof, authorizes that power, by a majority vote of the governing board, to be delegated to its district superintendent, or to any persons the district superintendent may designate, or if there is no district superintendent, to any other officer or employee of the district that the governing board may designate, as specified. Existing law similarly authorizes the designation of school district officers or employees to exercise the authority to purchase supplies, materials, apparatus, equipment, and services on behalf of the district. In the event of malfeasance in office, existing law requires the school district officer or employee invested by the governing board with the power to contract to be personally liable for any and all moneys of the school district paid out as a result of the malfeasance.
This bill would add similar provisions relating to charter school governing bodies and charter school officials that may be designated by those governing bodies in these instances.
(3)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. The bill would provide for the appointment of the Education Inspector General by the Governor, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to (A) conduct and supervise audits and investigations relating to the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, state special schools, and entities managing charter schools, (B) provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department, local educational agencies, and entities managing charter schools, and (C) provide a means for keeping the State Board of Education and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing charter schools and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate.
(4)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website. Existing law specifies that, for these purposes, in a charter school, misassignment applies only to employees in teaching positions.
This bill would delete the provision that limits the application of misassignment in charter schools only to employees in teaching positions. The bill would require teachers of certain courses offered by a local educational agency to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
(5)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(6)Existing law requires the Superintendent, if, during any fiscal year, the amount apportioned to a school district or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district or fund was entitled by an amount equal to the local control funding formula allocation for one unit of average daily attendance, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, to withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess of deficiency, as the case may be.
This bill would require the Superintendent to apply the above-described provisions to county offices of education and charter schools. If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation for one or more units of average daily attendance, the bill would require the local educational agency to report the corrected amount to the Superintendent. To the extent the bill would impose additional duties on a local educational agency, the bill would impose a state-mandated local program.
Existing law requires the governing board of a school district, the governing body of a charter school, and a county board of education, except as provided, to use specified moneys apportioned to the local educational agency during any fiscal year exclusively for the support of the schools of the local educational agency for that year. Existing law requires the governing board of a school district to expend a specified minimum proportion of the school districts current expense of education, as defined, during each fiscal year for payment of salaries of classroom teachers, as provided. Existing law requires state funding to be calculated and withheld from a school district or county office of education for any fiscal year in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, as provided.
The bill would apply the above-described provisions relating to the payment of salaries of classroom teachers and penalties for a person rendering services as a teacher who does not have a valid certification document to charter schools, as provided.
(7)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
Commencing July 1, 2028, the bill would require each chartering authority to annually (A) verify specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools, (B) notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data, (C) attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and (D) monitor payments of charter schools to verify that the payments are legal and have proper authorization, as provided.
The bill would require the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations to require charter schools to report periodic and annual financial data in the same manner and on the same form prescribed for school districts. The bill would phase in, from the 202627 fiscal year to the 202829 fiscal year, inclusive, and based on the average daily attendance of the charter school and whether the charter school is a nonclassroom-based charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts, as provided.
The bill would require teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications have been established, as provided, in charter schools to hold the Commission on Teacher Credentialing certificate, permit, or other document required for assigning individuals to certified positions.The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would prohibit a school district with an average daily attendance of fewer than 10,000 pupils from authorizing one or more nonclassroom-based charter schools or approving a material revision to expand one or more nonclassroom-based charter schools if doing so would result in more than a totality of 100% of the average daily attendance of the school district and would create an exception for a nonclassroom-based charter school in operation on or before December 31, 2025, that exceeds that limitation if, as of December 31, 2025, certain requirements are met.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities.
Existing law authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school (A) not to exceed 1% of the revenue of the charter school or (B) not to exceed 3% of the revenue of the charter school if the charter school is able to obtain substantially rent-free facilities from the chartering authority.The bill would create an exception for a chartering authority to exceed the above-described limit of 1% of the revenue of the charter school if the chartering authority is granted approval from the state board, except that under no circumstances shall oversight fees exceed 1% of the revenue of a charter school that is located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe.On and after July 1, 2026, the bill would require charter schools to comply with specified requirements relating to the expenditure of public funds for the payment of contractors, and would require the extent of the charter schools compliance with these requirements to be reviewed and reported as part of the annual, independent financial audit that the charter school is required to submit. The bill would require charter schools to obtain the approval of the governing body of the charter school for any contracts, as provided.
Existing law prohibits the governing board of a school district from denying a petition to establish a charter school unless it makes written factual findings in support of one or more specific findings including, among others, a finding that the school district is not positioned to absorb the fiscal impact of the proposed charter school.
The bill would additionally provide that a school district may demonstrate that the school district is not positioned to absorb that fiscal impact if, for the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district, the school district has exited state receivership and (A) has a qualified interim certification or (B) the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving a charter school would result in the school district having a qualified or negative interim certification, as provided.
The bill would, beginning July 1, 2026, revise and recast provisions of the act relating to the reporting of average daily attendance by charter schools, and would distinguish between the determination of funding for charter schools that offer less than 75% of instructional time at the schoolsite and require the attendance of all pupils for less than 75% of the minimum instructional time required to be offered and charter schools that offer 75% or more, respectively. The bill would require charter schools to adhere to specified criteria when submitting a funding determination request, as provided. The bill would require the Superintendent of Public Instruction to notify the chartering authority of a charter school that is maintaining an unassigned fund balance for economic uncertainties that is 5% or less of the charter schools annual expenditures.
Beginning with the 202728 school year, the bill would require the State Department of Education to annually develop a list that identifies networks of nonclassroom-based charter schools, as defined, based on data from the prior school year.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(8)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided.
The bill would prohibit a local educational agency from allocating, or advertising the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are (A) not provided by a credentialed employee of the local educational agency for the pupil and (B) are paid for by the local educational agency.
(9)Existing law requires any entity that has a contract with a school district, county office of education, or charter school to ensure that any employee who interacts with pupils, outside of the immediate supervision and control of the pupils parent or guardian or a school employee, has a valid criminal records summary, as specified.
This bill would require an entity that has a contract with a local educational agency to instead ensure any employee who interacts with pupils has a valid criminal records summary without regard to whether the interaction takes place outside of the immediate supervision and control of the pupils parent or guardian or a school employee.
(10)The Local Agency Public Construction Act regulates, among other things, the letting of contracts by school district governing boards involving an expenditure of more than $50,000 for specified purposes, including the purchase of equipment, materials, or supplies to be furnished, sold, or leased to the district, services other than construction services, and repairs, including maintenance, as defined.
This bill would extend to charter schools the provisions of the act that currently apply to school districts. To the extent the bill would impose additional duties on charter schools, the bill would impose a state-mandated local program.
(11)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Superintendent of Public Instruction or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made as referenced above. The bill would require the Controller, in performing quality control reviews, to ensure, among other things, that the selection of audits for each auditor is representative of each type of local educational agency, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities. The bill would require the Controller to conduct a quality control review after an authorized certified public accountant or public accountant, as specified, completes its first local educational agency financial statement and compliance audit or completes its first audit after 3 or more years of not having completed an audit, as provided. The bill would require the Controller, if an independent auditor has not engaged in financial or compliance audits for 3 or more consecutive years, to conduct a quality control review after the auditor completes the first financial or compliance audit.
The bill, commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and in good standing as certified by the California Board of Accountancy.
The bill would require, commencing with the 202627 fiscal year, and every 2 years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies to have completed 24 hours of continuing education, to have certified prior experience, and to have been peer reviewed by the California Board of Accountancy, as provided.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law, whenever in the Education Code the power to contract is invested in the governing board of a school district or any member thereof, authorizes that power, by a majority vote of the governing board, to be delegated to its district superintendent, or to any persons the district superintendent may designate, or if there is no district superintendent, to any other officer or employee of the district that the governing board may designate, as specified. Existing law similarly authorizes the designation of school district officers or employees to exercise the authority to purchase supplies, materials, apparatus, equipment, and services on behalf of the district. In the event of malfeasance in office, existing law requires the school district officer or employee invested by the governing board with the power to contract to be personally liable for any and all moneys of the school district paid out as a result of the malfeasance.
This bill would add similar provisions relating to charter school governing bodies and charter school officials that may be designated by those governing bodies in these instances.
(3)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. The bill would provide for the appointment of the Education Inspector General by the Governor, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to (A) conduct and supervise audits and investigations relating to the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, and state special schools to schools, and entities managing charter schools, (B) provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department and department, local educational agencies, and entities managing charter schools, and to (C) provide a means for keeping the State Board of Education and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department and department, local educational agencies agencies, and entities managing charter schools and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate.
(4)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website. Existing law specifies that, for these purposes, in a charter school, misassignment applies only to employees in teaching positions.
This bill would delete the provision that limits the application of misassignment in charter schools only to employees in teaching positions. The bill would require teachers of certain courses offered by a local educational agency to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
(5)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(6)Existing law requires the Superintendent, if, during any fiscal year, the amount apportioned to a school district or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district or fund was entitled by an amount equal to the local control funding formula allocation for one unit of average daily attendance, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, to withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess of deficiency, as the case may be.
This bill would require the Superintendent to apply the above-described provisions to county offices of education and charter schools. If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation for one or more units of average daily attendance, the bill would require the local educational agency to report the corrected amount to the Superintendent. To the extent the bill would impose additional duties on a local educational agency, the bill would impose a state-mandated local program.
Existing law requires the governing board of a school district, the governing body of a charter school, and a county board of education, except as provided, to use specified moneys apportioned to the local educational agency during any fiscal year exclusively for the support of the schools of the local educational agency for that year. Existing law requires the governing board of a school district to expend a specified minimum proportion of the school districts current expense of education, as defined, during each fiscal year for payment of salaries of classroom teachers, as provided. Existing law requires state funding to be calculated and withheld from a school district or county office of education for any fiscal year in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, as provided.
The bill would apply the above-described provisions relating to the payment of salaries of classroom teachers and penalties for a person rendering services as a teacher who does not have a valid certification document to charter schools, as provided.
(7)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
Commencing July 1, 2028, the bill would require each chartering authority to annually (A) verify specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools, (B) notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data, (C) attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and (D) monitor payments of charter schools to verify that the payments are legal and have proper authorization, as provided.
The bill would require the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations to require charter schools to report periodic and annual financial data in the same manner and on the same form prescribed for school districts. The bill would phase in, from the 202627 fiscal year to the 202829 fiscal year, inclusive, and based on the average daily attendance of the charter school, school and whether the charter school is a nonclassroom-based charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts. districts, as provided.
The bill would require teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications have been established, as provided, in charter schools to hold the Commission on Teacher Credentialing certificate, permit, or other document required for assigning individuals to certified positions.
The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would prohibit a school district with an average daily attendance of fewer than 10,000 pupils from authorizing one or more nonclassroom-based charter schools or approving a material revision to expand one or more nonclassroom-based charter schools if doing so would result in more than a totality of 100% of the average daily attendance of the school district and would create an exception for a nonclassroom-based charter school in operation on or before December 31, 2025, that exceeds that limitation if if, as of December 31, 2025, certain requirements are met.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities. The bill would require the Legislative Analysts Office to submit to the Governor and the appropriate education policy and budget committees of the Legislature, on or before December 1, 2030, an evaluation of the program.
Existing law authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school (A) not to exceed 1% of the revenue of the charter school or (B) not to exceed 3% of the revenue of the charter school if the charter school is able to obtain substantially rent-free facilities from the chartering authority.
The bill would gradually change the costs create an exception for a chartering authority is authorized to charge such that, on and after July 1, 2029, the chartering authority could charge for the actual costs of supervisorial oversight of a charter school not to exceed 3% to exceed the above-described limit of 1% of the revenue of the charter school, and would authorize certain chartering authorities to charge for the actual costs of supervisorial oversight, the administrative costs necessary to secure charter school funding, and the administrative costs necessary to perform certain oversight duties, as provided. The bill would authorize a chartering authority, if a charter school is able to obtain substantially rent-free facilities from the chartering authority, to charge an additional fee not to exceed 2% of the revenue of the charter school. school if the chartering authority is granted approval from the state board, except that under no circumstances shall oversight fees exceed 1% of the revenue of a charter school that is located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe.
On and after July 1, 2026, the bill would require charter schools to comply with specified requirements relating to the expenditure of public funds for the payment of contractors, and would require the extent of the charter schools compliance with these requirements to be reviewed and reported as part of the annual, independent financial audit that the charter school is required to submit. The bill would require charter schools to obtain the approval of the governing body of the charter school for any contracts, as provided.
Existing law prohibits the governing board of a school district from denying a petition to establish a charter school unless it makes written factual findings in support of one or more specific findings including, among others, a finding that the school district is not positioned to absorb the fiscal impact of the proposed charter school.
The bill would additionally provide that a school district may demonstrate that the school district is not positioned to absorb that fiscal impact if, for the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district, the school district has exited state receivership and (A) has a qualified interim certification or (B) the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving a charter school would result in the school district having a qualified or negative interim certification, as provided.
The bill would, beginning July 1, 2026, revise and recast provisions of the act relating to the reporting of average daily attendance by charter schools, and would distinguish between the determination of funding for classroom-based instruction and nonclassroom-based instruction. charter schools that offer less than 75% of instructional time at the schoolsite and require the attendance of all pupils for less than 75% of the minimum instructional time required to be offered and charter schools that offer 75% or more, respectively. The bill would require charter schools to adhere to specified criteria when submitting a funding determination request, as provided. The bill would require the Superintendent of Public Instruction to notify the chartering authority of a charter school that is maintaining an unassigned fund balance for economic uncertainties that is 5% or less of the charter schools annual expenditures.
Beginning with the 202728 school year, the bill would require the State Department of Education to annually develop a list that identifies networks of nonclassroom-based charter schools, as defined, based on data from the prior school year.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(8)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided.
The bill would prohibit a local educational agency from allocating, or advertising the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are (A) not provided by a credentialed employee of the local educational agency for the pupil and (B) are paid for by the local educational agency.
(9)Existing law requires any entity that has a contract with a school district, county office of education, or charter school to ensure that any employee who interacts with pupils, outside of the immediate supervision and control of the pupils parent or guardian or a school employee, has a valid criminal records summary, as specified.
This bill would require an entity that has a contract with a local educational agency to instead ensure any employee who interacts with pupils has a valid criminal records summary without regard to whether the interaction takes place outside of the immediate supervision and control of the pupils parent or guardian or a school employee.
(9)(10)The Local Agency Public Construction Act regulates, among other things, the letting of contracts by school district governing boards involving an expenditure of more than $50,000 for specified purposes, including the purchase of equipment, materials, or supplies to be furnished, sold, or leased to the district, services other than construction services, and repairs, including maintenance, as defined.
This bill would extend to charter schools the provisions of the act that currently apply to school districts. To the extent the bill would impose additional duties on charter schools, the bill would impose a state-mandated local program.
(10)(11)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Superintendent of Public Instruction or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made as referenced above. The bill would require the Controller, in performing quality control reviews, to ensure, among other things, that the selection of audits for each auditor is representative of each type of local educational agency, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities. The bill would require the Controller to conduct a quality control review after an authorized certified public accountant or public accountant, as specified, completes its first local educational agency financial statement and compliance audit or completes its first audit after 3 or more years of not having completed an audit, as provided. The bill would require the Controller, if an independent auditor has not engaged in financial or compliance audits for 3 or more consecutive years, to conduct a quality control review after the auditor completes the first financial or compliance audit.
The bill, commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and in good standing as certified by the California Board of Accountancy.
The bill would require, commencing with the 202627 fiscal year, and every 2 years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies to have completed 24 hours of continuing education, to have certified prior experience, and to have been peer reviewed by the California Board of Accountancy, as provided.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law, whenever in the Education Code the power to contract is invested in the governing board of a school district or any member thereof, authorizes that power, by a majority vote of the governing board, to be delegated to its district superintendent, or to any persons the district superintendent may designate, or if there is no district superintendent, to any other officer or employee of the district that the governing board may designate, as specified. Existing law similarly authorizes the designation of school district officers or employees to exercise the authority to purchase supplies, materials, apparatus, equipment, and services on behalf of the district. In the event of malfeasance in office, existing law requires the school district officer or employee invested by the governing board with the power to contract to be personally liable for any and all moneys of the school district paid out as a result of the malfeasance.
This bill would add similar provisions relating to charter school governing bodies and charter school officials that may be designated by those governing bodies in these instances.
(3)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. The bill would provide for the appointment of the Education Inspector General by the Governor, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to conduct and supervise audits and investigations relating to the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, and state special schools to provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department and local educational agencies, and to provide a means for keeping the Superintendent State Board of Education and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department and local educational agencies and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate.
(4)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website. Existing law specifies that, for these purposes, in a charter school, misassignment applies only to employees in teaching positions.
This bill would delete the provision that limits the application of misassignment in charter schools only to employees in teaching positions. The bill would require teachers of certain courses offered by a local educational agency to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
(5)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(6)Existing law requires the Superintendent, if, during any fiscal year, the amount apportioned to a school district or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district or fund was entitled by an amount equal to the local control funding formula allocation for one unit of average daily attendance, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, to withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess of deficiency, as the case may be.
This bill would require the Superintendent to apply the above-described provisions to county offices of education and charter schools. If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation for one or more units of average daily attendance, the bill would require the local educational agency to report the corrected amount to the Superintendent. To the extent the bill would impose additional duties on a local educational agency, the bill would impose a state-mandated local program.
Existing law requires the governing board of a school district, the governing body of a charter school, and a county board of education, except as provided, to use specified moneys apportioned to the local educational agency during any fiscal year exclusively for the support of the schools of the local educational agency for that year. Existing law requires the governing board of a school district to expend a specified minimum proportion of the school districts current expense of education, as defined, during each fiscal year for payment of salaries of classroom teachers, as provided. Existing law requires state funding to be calculated and withheld from a school district or county office of education for any fiscal year in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, as provided.
The bill would apply the above-described provisions relating to the payment of salaries of classroom teachers and penalties for a person rendering services as a teacher who does not have a valid certification document to charter schools, as provided.
(6)(7)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
ThisCommencing July 1, 2028, the bill would require each chartering authority to annually (A) verify specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools and would require the chartering authority to schools, (B) notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data. data, (C) attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and (D) monitor payments of charter schools to verify that the payments are legal and have proper authorization, as provided.
The bill would require the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations to require charter schools to report periodic and annual financial data in the same manner and on the same form prescribed for school districts. The bill would phase in, from the 202627 fiscal year to the 202829 fiscal year, inclusive, and based on the average daily attendance of the charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts.
The bill would require teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications have been established, as provided, in charter schools to hold the Commission on Teacher Credentialing certificate, permit, or other document required for assigning individuals to certified positions.
The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would limit the size of the totality of nonclassroom-based charter schools that a school district may authorize the charter for based on the average daily attendance of the school district. prohibit a school district with an average daily attendance of fewer than 10,000 pupils from authorizing one or more nonclassroom-based charter schools or approving a material revision to expand one or more nonclassroom-based charter schools if doing so would result in more than a totality of 100% of the average daily attendance of the school district and would create an exception for a nonclassroom-based charter school in operation on or before December 31, 2025, that exceeds that limitation if certain requirements are met.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities. The bill would require the Legislative Analysts Office to submit to the Governor and the appropriate education policy and budget committees of the Legislature, on or before December 1, 2030, an evaluation of the program.
Existing law authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school (A) not to exceed 1% of the revenue of the charter school or (B) not to exceed 3% of the revenue of the charter school if the charter school is able to obtain substantially rent-free facilities from the chartering authority.
The bill would gradually change the costs a chartering authority is authorized to charge such that, on and after July 1, 2028, 2029, the chartering authority could charge for the actual costs of supervisorial oversight of a charter school not to exceed 3% of the revenue of the charter school, and would authorize certain chartering authorities to charge for the actual costs of supervisorial oversight, the administrative costs necessary to secure charter school funding, and the administrative costs necessary to perform certain oversight duties, as provided. The bill would authorize a chartering authority, if a charter school is able to obtain substantially rent-free facilities from the chartering authority, to charge an additional fee not to exceed 2% of the revenue of the charter school.
On and after July 1, 2026, the bill would require charter schools to comply with specified requirements relating to the expenditure of public funds for the payment of contractors, and would require the extent of the charter schools compliance with these requirements to be reviewed and reported as part of the annual, independent financial audit that the charter school is required to submit. The bill would require charter schools to obtain the approval of the governing body of the charter school for any contracts, as provided.
Existing law prohibits the governing board of a school district from denying a petition to establish a charter school unless it makes written factual findings in support of one or more specific findings including, among others, a finding that the school district is not positioned to absorb the fiscal impact of the proposed charter school.
The bill would additionally provide that a school district may demonstrate that the school district is not positioned to absorb that fiscal impact if, for the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district, the school district has exited state receivership and (A) has a qualified interim certification or (B) the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving a charter school would result in the school district having a qualified or negative interim certification, as provided.
The bill would, beginning July 1, 2026, revise and recast provisions of the act relating to the reporting of average daily attendance by charter schools, and would distinguish between the determination of funding for classroom-based instruction and nonclassroom-based instruction.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(7)(8)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided.
The bill would prohibit a local educational agency from allocating, or advertising the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are (A) not provided by a credentialed employee of the local educational agency for the pupil and (B) are paid for by the local educational agency.
(8)(9)The Local Agency Public Construction Act regulates, among other things, the letting of contracts by school district governing boards involving an expenditure of more than $50,000 for specified purposes, including the purchase of equipment, materials, or supplies to be furnished, sold, or leased to the district, services other than construction services, and repairs, including maintenance, as defined.
This bill would extend to charter schools the provisions of the act that currently apply to school districts. To the extent the bill would impose additional duties on charter schools, the bill would impose a state-mandated local program.
(9)(10)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(1)Existing law requires county superintendents of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with county superintendents of schools to provide for that auditing. Existing law requires the governing board of each school district and each office of the county superintendent of schools to include specified provisions in their contracts for audits and requires financial and compliance audits to be performed in accordance with specified standards. If the governing board of a school district has entered into a contract for an independent audit of its financial statements and the audited financial statements have not been filed with the county superintendent of schools on or before a specified due date, existing law authorizes the county superintendent of schools to, among other things, investigate the causes for the delay, as provided.
This bill would expressly apply the above-described provisions to educational joint powers authorities and charter schools. The bill, among other things, would require those financial and compliance audits of local educational agencies to be conducted in accordance with specified filing deadlines and would revise requirements regarding which entity is responsible for providing an audit if a local educational agency has not provided for an audit of their respective books and accounts to include the Superintendent of Public Instruction or a chartering authority, as provided. The bill would require, instead of authorize, a county superintendent of schools to investigate the causes for an above-described delay.
Existing law requires the Controller to, among other things, on an annual basis, review and monitor the audit reports performed by independent auditors, determine whether audit reports are in conformance with specified reporting provisions, and notify each local educational agency, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. Existing law authorizes the Controller to perform quality control reviews of audit working papers to determine whether audits are performed in conformity with those specified standards. Existing law requires the Controller to annually report to the State Department of Education to apprise the department of school districts and offices of county superintendents of schools that are not in compliance with applicable statutes and regulations related to audits and requires the Controller to make recommendations as to what action should be taken by the department.
The bill would require the Controller to, if applicable, notify the responsible chartering authority of each determination made as referenced above. The bill would require the Controller, in performing quality control reviews, to ensure, among other things, that the selection of audits for each auditor is representative of each type of local educational agency, as provided. The bill would require the Controller to instead report and provide recommendations to the Superintendent of entities not in compliance with applicable statutes and regulations and would include educational joint powers authorities and charter schools as reported entities. The bill would require the Controller to conduct a quality control review after an authorized certified public accountant or public accountant, as specified, completes its first local educational agency financial statement and compliance audit or completes its first audit after 3 or more years of not having completed an audit, as provided. The bill would require the Controller, if an independent auditor has not engaged in financial or compliance audits for 3 or more consecutive years, to conduct a quality control review after the auditor completes the first financial or compliance audit.
The bill, commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, would require the Controller to include, among other things, instructions requiring specified supplemental information and schedules in audit report components for local educational agency audits, as provided.
Existing law requires audits to be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and in good standing as certified by the California Board of Accountancy.
The bill would require, commencing with the 202627 fiscal year, and every 2 years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies to have completed 24 hours of continuing education, to have certified prior experience, and to have been peer reviewed by the California Board of Accountancy, as provided.
To the extent the bill would impose additional duties on local educational agencies or local officials, the bill would impose a state-mandated local program.
(2)Existing law, whenever in the Education Code the power to contract is invested in the governing board of a school district or any member thereof, authorizes that power, by a majority vote of the governing board, to be delegated to its district superintendent, or to any persons the district superintendent may designate, or if there is no district superintendent, to any other officer or employee of the district that the governing board may designate, as specified. Existing law similarly authorizes the designation of school district officers or employees to exercise the authority to purchase supplies, materials, apparatus, equipment, and services on behalf of the district. In the event of malfeasance in office, existing law requires the school district officer or employee invested by the governing board with the power to contract to be personally liable for any and all moneys of the school district paid out as a result of the malfeasance.
This bill would add similar provisions relating to charter school governing bodies and charter school officials that may be designated by those governing bodies in these instances.
(3)Existing law establishes the State Department of Education, under the administration of the Superintendent of Public Instruction, and assigns to it numerous duties relating to the governance and financing of the public elementary and secondary schools of this state.
This bill would establish the Office of the Education Inspector General in the department. The bill would provide for the appointment of the Education Inspector General by the Governor, subject to confirmation by a vote of the majority of the membership of the Senate. The bill would require the Education Inspector General to conduct and supervise audits and investigations relating to the programs and operations of the department, school districts, county offices of education, charter schools, educational joint powers authorities, and state special schools to provide leadership and coordination and recommend policies to prevent and detect fraud and abuse in programs and operations of the department and local educational agencies, and to provide a means for keeping the Superintendent and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department and local educational agencies and the necessity for and progress of corrective actions that the Inspector General deems to be appropriate.
(4)Existing law requires the Commission on Teacher Credentialing to establish standards for the issuance and renewal of credentials, certificates, and permits. Existing law requires the commission and the department to enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator misassignments and vacant positions at local educational agencies, as provided, as part of the State Assignment Accountability System. Existing law requires the commission to annually use data it receives from the department to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment and requires the commission to notify local educational agencies and monitoring authorities of the opportunity to access and review the initial data file of potential misassignments, as defined, and vacant positions. Existing law grants the commission the authority to make a final determination for all potential misassignments. Existing law requires, commencing with the 202021 school year, the commission to make annual educator assignment, misassignment, and vacant position data publicly available on its internet website. Existing law specifies that, for these purposes, in a charter school, misassignment applies only to employees in teaching positions.
This bill would delete the provision that limits the application of misassignment in charter schools only to employees in teaching positions. The bill would require teachers of certain courses offered by a local educational agency to hold the certificate, permit, or other document required by the commission for that assignment and be monitored. To the extent that this provision would create new duties for county superintendents of schools and local educational agencies, it would constitute a state-mandated local program.
Existing(5)Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to provide a report, including to, by January 1, 2030, and in consultation with the County Office Fiscal Crisis Management Assistance Team, complete a report with specified data, to the appropriate policy and fiscal committees of the Legislature data relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system. system, and would require the department to provide the report to the appropriate policy and fiscal committees of the Legislature, as provided.
(6)The Charter Schools Act of 1992 authorizes the establishment, operation, and governance of charter schools. Existing law requires a petition to establish a charter school to include reasonably comprehensive descriptions of certain things, including the manner in which annual, independent financial audits shall be conducted, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.
This bill would require each chartering authority to verify specified data relating to the reporting of average daily attendance by nonclassroom-based charter schools and would require the chartering authority to notify the certified public accountant or accountant performing the audit of the charter school if the charter school does not provide the required documentation needed to verify the specified data.
The bill would require the State Board of Education, in consultation with the Superintendent of Public Instruction, to revise regulations to require charter schools to report periodic and annual financial data in the same manner and on the same form prescribed for school districts. The bill would phase in, from the 202627 fiscal year to the 202829 fiscal year, inclusive, and based on the average daily attendance of the charter school, the requirement that charter schools report this data in the same manner and on the same form prescribed for school districts.
The bill would require teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications have been established, as provided, in charter schools to hold the Commission on Teacher Credentialing certificate, permit, or other document required for assigning individuals to certified positions.
The bill would require the state board to appoint an advisory committee on charter schools that would include representatives from school district superintendents, charter schools, teachers, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
The bill would limit the size of the totality of nonclassroom-based charter schools that a school district may authorize the charter for based on the average daily attendance of the school district.
The bill would establish the Charter Authorizing Support Team program, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the State Department of Education, as an initiative to expand uniform charter school authorizing and oversight practices. The bill would specify the goals and proposed activities of the program, including the appointment of a 13-member advisory board with designated membership and responsibilities. The bill would require the Legislative Analysts Office to submit to the Governor and the appropriate education policy and budget committees of the Legislature, on or before December 1, 2030, an evaluation of the program.
Existing law authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school (A) not to exceed 1% of the revenue of the charter school or (B) not to exceed 3% of the revenue of the charter school if the charter school is able to obtain substantially rent-free facilities from the chartering authority.
The bill would gradually change the costs a chartering authority is authorized to charge such that, on and after July 1, 2028, the chartering authority could charge for the actual costs of supervisorial oversight of a charter school not to exceed 3% of the revenue of the charter school, and would authorize certain chartering authorities to charge for the actual costs of supervisorial oversight, the administrative costs necessary to secure charter school funding, and the administrative costs necessary to perform certain oversight duties, as provided. The bill would authorize a chartering authority, if a charter school is able to obtain substantially rent-free facilities from the chartering authority, to charge an additional fee not to exceed 2% of the revenue of the charter school.
On and after July 1, 2026, the bill would require charter schools to comply with specified requirements relating to the expenditure of public funds for the payment of contractors, and would require the extent of the charter schools compliance with these requirements to be reviewed and reported as part of the annual, independent financial audit that the charter school is required to submit. The bill would require charter schools to obtain the approval of the governing body of the charter school for any contracts, as provided.
Existing law prohibits the governing board of a school district from denying a petition to establish a charter school unless it makes written factual findings in support of one or more specific findings including, among others, a finding that the school district is not positioned to absorb the fiscal impact of the proposed charter school.
The bill would additionally provide that a school district may demonstrate that the school district is not positioned to absorb that fiscal impact if, for the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district, the school district has exited state receivership and (A) has a qualified interim certification or (B) the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving a charter school would result in the school district having a qualified or negative interim certification, as provided.
The bill would, beginning July 1, 2026, revise and recast provisions of the act relating to the reporting of average daily attendance by charter schools, and would distinguish between the determination of funding for classroom-based instruction and nonclassroom-based instruction.
To the extent that these additions to the act would impose new duties on local educational agencies, they would constitute a state-mandated local program.
(7)Existing law authorizes a school district, county office of education, or charter school to offer independent study to meet the educational needs of pupils when certain requirements are met, including, among others, that the local educational agency has adopted written policies, and implemented those policies, in accordance with rules and regulations adopted by the Superintendent, as specified. Existing law, for purposes of independent study, requires those programs to meet specified average-daily-attendance-to-certificated-employee ratios. Existing law prohibits school districts and county offices of education from being eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district or county board of education, as provided.
This bill would, among other things, extend the latter-described prohibition to charter schools, revise required average-daily-attendance-to-certificated-employee ratios, and add requirements to the independent study policies and procedures, as provided.
The bill would prohibit a local educational agency from allocating, or advertising the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are (A) not provided by a credentialed employee of the local educational agency for the pupil and (B) are paid for by the local educational agency.
(8)The Local Agency Public Construction Act regulates, among other things, the letting of contracts by school district governing boards involving an expenditure of more than $50,000 for specified purposes, including the purchase of equipment, materials, or supplies to be furnished, sold, or leased to the district, services other than construction services, and repairs, including maintenance, as defined.
This bill would extend to charter schools the provisions of the act that currently apply to school districts. To the extent the bill would impose additional duties on charter schools, the bill would impose a state-mandated local program.
(9)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Existing law states the intent of the Legislature to encourage sound fiscal management practices among local educational agencies by strengthening fiscal accountability at the school district, county, and state levels, as provided.This bill would state the intent of the Legislature that all charter schools be audited and that comprehensive statutory changes be made to implement specified recommendations related to the funding determination process for nonclassroom-based charter schools and related to audit best practices for detecting and curtailing charter school fraud.Existing law establishes a public school financing system that requires state funding for school districts, county offices of education, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law includes average daily attendance as a component of the calculation under the local control funding formula. Existing law establishes the California Longitudinal Pupil Achievement Data System, which is maintained by the State Department of Education and consists of pupil data from elementary and secondary schools, as specified, relating to demographics, program participation, enrollment, and statewide assessments, among other things.
This bill would require the department to provide a report, including specified data, to the appropriate policy and fiscal committees of the Legislature relating to the possible integration of the California Longitudinal Pupil Achievement Data System and the average daily attendance apportionment data system.
Existing law states the intent of the Legislature to encourage sound fiscal management practices among local educational agencies by strengthening fiscal accountability at the school district, county, and state levels, as provided.
This bill would state the intent of the Legislature that all charter schools be audited and that comprehensive statutory changes be made to implement specified recommendations related to the funding determination process for nonclassroom-based charter schools and related to audit best practices for detecting and curtailing charter school fraud.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(H)For schools that are identified on the list established in the 202425 fiscal year pursuant to subparagraph (A), and only in the fiscal years in which that list is used, a county superintendent shall complete the textbook and instructional materials review conducted for purposes of this paragraph and subparagraph (A) of paragraph (3) of subdivision (i) by the eighth week of the school year. The county superintendent shall prioritize reviewing, within the first four weeks of the school year where practicable, schools for which the county superintendent has received information from a survey, a complaint filed pursuant to Section 35186, or any other reliable source that the school does not have sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i), or that a facility of the school poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year, except as specified in subparagraph (H) of paragraph (2) of subdivision (c).
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts, educational joint powers authorities, county superintendents of schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the generally accepted government auditing standards promulgated by the United States Government Accountability Office. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation, or both, and includes the verification of each of the following, if applicable:
(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(C)Teacher misassignments pursuant to Section 44258.9.
(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126.
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14502.1 of the Education Code is amended to read:14502.1.(a)The Controller, in consultation with the Department of Finance and the department, shall develop a plan to review and report on financial and compliance audits. The plan shall commence with the 200304 fiscal year for audits of school districts, other local educational agencies, and the offices of county superintendents of schools. The Controller, in consultation with the Department of Finance, the department, and representatives of the California School Boards Association, the California Association of School Business Officials, the California County Superintendents Educational Services Association, the California Teachers Association, the California Society of Certified Public Accountants, the California Charter Schools Association, the Charter Schools Development Center, the California School Employees Association, and the County Office Fiscal Crisis and Management Assistance Team, shall recommend the statements and other information to be included in the audit reports filed with the state, and shall propose the content of an audit guide to carry out the purposes of this chapter. A supplement to the audit guide may be suggested in the audit year, following the above process, to address issues resulting from new legislation in that year that changes the conditions of apportionment. The proposed content of the audit guide and any supplement to the audit guide shall be submitted by the Controller to the Education Audit Appeals Panel for review and possible amendment.
(b)The audit guide and any supplement shall be adopted by the Education Audit Appeals Panel pursuant to the rulemaking procedures of the Administrative Procedure Act, as set forth in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. It is the intent of the Legislature that, for the 200304 fiscal year, the audit guide be adopted by July 1 of the fiscal year to be audited. A supplemental audit guide may be adopted to address legislative changes to the conditions of apportionment. It is the intent of the Legislature that supplements be adopted before March 1 of the audit year. Commencing with the 200405 fiscal year, and each fiscal year thereafter, the audit guide shall be adopted by July 1 of the fiscal year to be audited. A supplemental audit guide may be adopted to address legislative changes to the conditions of apportionment. The supplements shall be adopted before March 1 of the audit year. To meet these goals and to ensure the accuracy of the audit guide, the process for adopting emergency regulations set forth in Section 11346.1 of the Government Code may be followed to adopt the audit guide and supplemental audit guide. It is the intent of the Legislature that once the audit guide has been adopted for a fiscal year, as well as any supplement for that year, thereafter only suggested changes to the audit guide and any additional supplements need be adopted pursuant to the rulemaking procedures of the Administrative Procedure Act. The audit guide and any supplement shall be issued in booklet form and may be made available by any means deemed appropriate. The Controller and consultants in the development of the suggested audit guide and any supplement shall work cooperatively on a timeline that will allow the Education Audit Appeals Panel to meet the July 1 and March 1 issuance dates. Consistent with current practices for development of the audit guide before the 200304 fiscal year, the Controller shall provide for the adoption of procedures and timetables for the development of the suggested audit guide, any supplement, and the format for additions, deletions, and revisions.
(c)For the audit of school districts or county offices of education electing to take formal action pursuant to Sections 22714 and 44929, the audit guide content proposed by the Controller shall include, but not be limited to, the following:
(1)The number and type of positions vacated.
(2)The age and service credit of the retirees receiving the additional service credit provided by Sections 22714 and 44929.
(3)A comparison of the salary and benefits of each retiree receiving the additional service credit with the salary and benefits of the replacement employee, if any.
(4)The resulting retirement cost, including interest, if any, and postretirement health care benefits costs, incurred by the employer.
(d)The Controller shall annually prepare a cost analysis, based on the information included in the audit reports for the prior fiscal year, to determine the net savings or costs resulting from formal actions taken by school districts and county offices of education pursuant to Sections 22714 and 44929, and shall report the results of the cost analysis to the Governor and the Legislature by April 1 of each year.
(e)All costs incurred by the Controller to implement subdivision (c) shall be absorbed by the Controller.
(f)On or before January 1, 2015, the Controller, in consultation with the State Allocation Board, the Department of Finance, and the department, shall submit content to the Education Audit Appeals Panel to be included in the audit guide, Standards and Procedures for Audits of California K-12 Local Educational Agencies beginning in the 201516 fiscal year, that is related to the financial and performance audits required for school facility projects, as described in Section 15286.
SEC. 5.SEC. 6.Section 14503 of the Education Code is amended to read:14503.Financial and compliance audits shall be performed in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
SEC. 6.SEC. 7.Section 14504 of the Education Code is amended to read:14504.(a)(1)To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors.
(2)(A)The Controller shall determine whether audit reports are in conformance with the reporting provisions of Section 14503 and shall notify each local educational agency, the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor within six months of the audit report due date or the audit report issue date, whichever is later, regarding each determination.
(B)The local educational agency, the chartering authority, the county superintendent of schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
(b)Commencing with the 202728 fiscal year, the audit guide developed by the Controller and adopted by the Education Audit Appeals Panel pursuant to Section 14502.1 shall include an appendix with the Controllers desk review checklist that is used to determine whether audit reports are in conformance with the reporting requirements of Section 14503. The Controllers desk review checklist shall focus on elements of reporting that are material, whether qualitative or quantitative, and areas with a higher risk of error or misstatement.
SEC. 7.SEC. 8.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a local educational agency was conducted in a manner that may constitute noncompliance with Section 14503. The Controller shall communicate the results of the Controllers reviews to the entity that referred the independent auditor to the Controller, the independent auditor, and the local educational agency for which the audit was performed, and shall review the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)The Controller shall establish and publish as part of the audit guide a weighted risk-based criteria that considers auditor experience and quality factors in determining which audit engagements shall undergo a quality control review. Criteria shall primarily include, but not be limited to, all of the following:
(A)Audit reports that were found to have material nonconformance to the reporting provisions of Section 14503 through the Controllers review.
(B)Audits conducted by an engagement partner who has not performed audits of local educational agencies in the preceding three years.
(C)Audits that are submitted after the due date established pursuant to subdivision (k) of Section 41020, or an approved extension date, whichever is later.
(3)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct, as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(c)In any matter that is referred to the California Board of Accountancy under paragraph (3) of subdivision (b), the Controller may suspend the independent auditor from performing any local educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local educational agency under paragraph (3) of subdivision (b). The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(d)The county superintendent of schools, the school district, the charter school, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local educational agency to the California Board of Accountancy for action described in paragraph (3) of subdivision (b) if either of the following circumstances exist:
(1)An audit of a local educational agency was conducted in a manner that may constitute unprofessional conduct, as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
SEC. 8.SEC. 9.Section 14505 of the Education Code is amended to read:14505.(a)(1)The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(A)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of Section 14503.
(B)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to the reporting provisions of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to the reporting provisions of Section 14503.
(2)If the Controller has not provided a written certification that the audit report has conformed to the reporting provisions of Section 14503 or a written rejection letter detailing the exceptions noted by the Controllers review with instructions for corrections by the sixth month following the audit issue date, or the audit due date, whichever is later, the governing board or body of the local educational agency may release the amounts withheld in audit fees pursuant to paragraph (1).
(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to the reporting provisions of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to the reporting provisions of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(c)If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.SEC. 10.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits that are necessary to carry out the Controllers duties and responsibilities pursuant to this code and the Government Code. This chapter does not authorize a local educational agency, or a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out additional audits. To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid unnecessary duplication of audit efforts. In performing additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the local educational agency for the costs of these additional audits.
SEC. 10.SEC. 11.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the Superintendent on or before June 30 of each year in order to apprise the Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the Superintendent. Before issuing the report, the Controller shall allow each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting that local educational agency.
SEC. 11.SEC. 12.Section 14508 of the Education Code is amended to read:14508.Notwithstanding Section 10231.5 of the Government Code, the Controller shall submit a report, consistent with Section 9795 of the Government Code, to the Legislature on or before August 31 of each year regarding any recommendations made to the Superintendent pursuant to Section 14507.
SEC. 12.SEC. 13.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (o) of Section 41020.
SEC. 13.SEC. 14.Section 33309.5 is added to the Education Code, to read:33309.5.(a)(1)(A)The Office of the Education Inspector General is hereby established in the department. established. The Education Inspector General shall be appointed by the Governor, Governor to a four-year term from a list of three qualified individuals nominated by the Joint Legislative Audit Committee pursuant to subparagraph (B) and subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the state board. The state board shall not prevent or prohibit the The Education Inspector General shall not be prevented from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(B)The Joint Legislative Audit Committee shall provide at least 120 days notice that it is seeking applicants for nomination by providing notice in the Journals of the Senate and the Assembly and by advertising in appropriate newspapers and with nationally acknowledged professional journals and associations. Names for consideration by the Joint Legislative Audit Committee may be submitted by members of the Legislature, professional organizations, individuals, and other entities. The Legislature and the Governor may provide suggested qualifications to the Joint Legislative Audit Committee to consider when making its nominations.
(2)The Office of the Education Inspector General shall not be a subdivision of any other governmental entity.
(3)The Education Inspector General may not be removed from office by the Governor during that term, except for good cause.
(b)Subject to applicable law, the Education Inspector General shall select, appoint, and employ officers and employees necessary to carry out the functions of the office. In making these selections, the Education Inspector General shall ensure that those officers and employees have the requisite training and experience to enable the Education Inspector General to carry out their duties effectively.
(c)(1)For each fiscal year, the Education Inspector General shall provide the Department of Finance with the offices proposed budget by September 1 of each year. If the amount of the Education Inspector Generals proposed budget differs from the amount included in the Governors Budget, the Department of Finance shall provide a notification, no later than January 10 of each year, to the chairs and vice chairs of the budget committees of both houses of the Legislature and the Legislative Analysts Office identifying the differences and explaining the reasons for the differences.
(2)The annual salary for the Education Inspector General shall be equal to that of the High-Speed Rail Authority Inspector General established pursuant to Section 187020 of the Public Utilities Code.
(b)(d)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising forensic audits and investigations relating to of the programs and operations of the department, local educational agencies, and entities managing a charter school. school related to fraud, misappropriation, or other illegal practices.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department, local educational agencies, and entities managing a charter school.(3)Providing a means for keeping the state board and the Legislature fully and currently informed about problems and deficiencies relating to the administration of(2)(A)Coordinating audits of local educational agencies completed by the Education Inspector General pursuant to paragraph (1) with audits completed pursuant to Section 1241.5 and investigations by law enforcement.
(B)The Education Inspector General is authorized to coordinate and communicate with law enforcement and auditors conducting audits pursuant to Section 1241.5.
(3)Annually reporting to the appropriate policy committees of the Legislature information on all of the following:
(A)Investigations of the programs and operations of the department, local educational agencies, and entities managing a charter school, and the school.
(B)The number of referrals and reports made pursuant to subparagraphs (A) and (B) of paragraph (4).
(C)The necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(D)Recommendations for statutory changes necessary to prevent fraud and misappropriation of funds.
(4)(A)Referring findings of fraud or other illegal activity to the local district attorney and the Attorney General.
(B)Reporting audit findings with a fiscal impact to the department and determining the associated cost and the average daily attendance disallowance.
(C)(i)If a finding involves a charter school, reporting the finding to the governing body of the charter school and the chartering authority, unless doing so would undermine or compromise further necessary investigations.
(ii)If a finding involves a school district or county office of education, reporting the finding to the governing board of the school district or the county office of education, unless doing so would undermine or compromise further necessary investigations.
(e)(1)(A)A resident of California may report a concern of suspected fraud, misappropriation of public funds, or illegal practices by the department, local educational agencies, or entities managing a charter school to the Office of the Education Inspector General.
(B)A resident who reports a concern to the Office of the Education Inspector general shall have whistleblower protections against retaliation including protections provided pursuant to Article 5 (commencing with Section 44110) of Chapter 1 of Part 25 and Section 1102.5 of the Labor Code.
(2)A report made pursuant to paragraph (1) shall be provided in writing, including by electronic or online submission, and documented to the best ability of the person submitting the concern.
(3)A report made pursuant to paragraph (1) shall not be subject to a Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) request until an investigation is concluded and made public.
(f)Investigations by the Office of the Education Inspector General may only be furthered upon a finding that there is reasonable suspicion to believe that improprieties have occurred.
(g)(1)On or before December 15, 2032, the Legislative Analysts Office shall submit a report, consistent with Section 9795 of the Government Code, to the appropriate policy committees of the Legislature on the activities of the Office of the Education Inspector General, recommendations for the continuance of the office or improvements to the structure of the office. The report shall also include all of the following:
(A)The number of reports made to the Education Inspector General, the number of investigations and audits disaggregated by type of local educational agency and the number of investigations and audits of the department and entities managing a charter school.
(B)The number of referrals and reports made to the department, local district attorneys, and the Attorney General pursuant to subparagraphs (A) and (B) of paragraph (4) of subdivision (d).
(C)The extent to which findings from the Education Inspector General have resulted in the recovery of state funds due to fraud, misappropriation of funds, or other illegal practices.
(2)The Office of the Education Inspector General shall provide the Legislative Analysts Office with available information necessary to meet the requirements of paragraph (1).
(c)(h)For purposes of this section, the following definitions apply:
(1)Entity managing a charter school has the same meaning as defined in subdivision (a) of Section 47604.1.
(2)Local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SEC. 14.SEC. 15.Section 41020 of the Education Code is amended to read:41020.(a)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(b)A local educational agency shall post the local educational agencys annual financial and compliance audits on its internet website.
(c)(1)(A)On or before May 1 of each fiscal year, the governing board of each school district or educational joint powers authority shall either provide for an audit of all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the school district or educational joint powers authority to provide for that auditing.
(B)A contract to perform the audit of a school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. Except as provided in clause (ii) of subparagraph (B), an independent audit shall be separately conducted and reported for each charter school.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Notwithstanding subparagraph (A), financial data for charter schools that are included in the school district or county office of education audit shall be presented separately in one of the following manners:
(I)As a major fund, when applicable.
(II)As a Supplementary Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance. supplementary balance sheet and statement of revenues, expenditures, and changes in fund balance.
(III)As Supplementary Combining Statements supplementary combining statements for charter schools that are accounted for in the General Fund or when multiple charter schools are included in the charter school fund.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Controller to provide for that auditing.
(d)If the governing board of a school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (c) has not provided for an audit of the books and accounts of the local educational agency by April 1, one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Controller shall provide for the audit.
(e)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(f)Each audit conducted in accordance with this section shall include all of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency.
(2)An audit of pupil attendance procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 or, for a charter school, Section 47606.5.
(4)Notwithstanding any other law, to the extent the governing body of a charter school engages in activities that are unrelated to the charter school, the financial and compliance audit required by this section shall not apply with regard to those unrelated activities.
(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(h)(1)The cost of an audit provided for by a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Controller for a county superintendent of schools shall be paid by the Controller and the Controller shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(4)The cost of an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of a county superintendent of schools shall be paid from the county school service fund.
(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with Section 14503.
(4)(A)(i)Commencing with the 202728 fiscal year, and every two years thereafter, in order to be added to, or remain on, the Controllers directory of certified public accountants and public accountants deemed qualified to conduct audits of local educational agencies, audit engagement partners and certified public accountants or public accountants responsible for local educational agency audits and audit staff who perform audit procedures of local educational agencies shall complete 16 hours of continuing education that, at a minimum, covers both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include, but are not limited to, pupil attendance, independent study, charter schools, if applicable, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education hours taken as part of the California Board of Accountancy license renewal requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202728 fiscal year, in order to be added to, or remain on the Controllers directory of certified public accountants and public accountants deemed qualified to conduct audits of local educational agencies, audit engagement partners, certified public accountant firms, and certified public accountants or public accountants responsible for local educational agency audits shall comply with both of the following:
(i)(I)Have demonstrated experience conducting financial and compliance audits for local educational agencies.
(II)Audit engagement partners, certified public accountant firms, and certified public accountants or public accountants may perform a financial and compliance audit for a local educational agency during their first year of conducting those audits, provided the audit report receives a preissuance review, consistent with applicable professional standards on quality control, performed by an auditor that has demonstrated experience in conducting financial and compliance audits for local educational agencies.
(ii)Have maintained compliance with the California Board of Accountancy requirements to keep applicable licenses in active status and good standing.
(C)The continuing education hours and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)(A)A local educational agency and an auditor that is under contract with the local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(B)(i)Before accepting a new engagement for a local educational agency, auditors shall request the local educational agency to provide authorization for predecessor auditors to respond fully and without limitation to the successor auditors inquiries and request to examine work papers related to subparagraph (C).
(ii)If the local educational agency refuses to authorize predecessor auditors to respond, or limits the response, the auditor shall inquire about the reasons and consider the implications of that refusal or limitation in deciding whether to accept the engagement.
(iii)If the local educational agency provides permission for predecessor auditors to respond fully, the successor auditor shall make the following inquiries of the predecessor auditors:
(I)Their knowledge of information that might bear on the integrity of management of the local educational agency.
(II)Whether there were any disagreements with management of the local educational agency regarding matters of accounting principles, financial reporting, compliance, or audit scope.
(III)Whether there were any communications to management of the local educational agency regarding fraud, illegal acts, noncompliance, or internal control matters.
(IV)The predecessor auditors understanding of the reason for the change of auditors.
(V)Any information relevant to the successor auditors risk assessments for the period being audited.
(C)The successor auditor may request to inspect work papers as needed to gain full context of any risks identified through inquiry or to perform necessary procedures on beginning balances.
(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(k)(1)On or before January 31, a report of each local educational agency audit for the preceding fiscal year shall be filed with specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the Superintendent, and the Controller.
(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports pursuant to Section 41344.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Upon submission of the final audit report to the governing board of each school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district or educational joint powers authority, the county superintendent of schools shall do all of the following:
(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the school district or educational joint powers authority and request the governing board of the school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction before April 15.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, on or before June 15, that the county superintendent of schools staff has reviewed all audits of school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(4)In the audit of a school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall restate the exception in the audit report. After receiving a finding in an audit report, the Superintendent shall either consult with the school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before April 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before May 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Ensure that chartering authorities have certified that the charter schools they authorize have corrected or developed a plan of correction for exceptions identified in the audit report.
(iv)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)Notwithstanding subparagraph (A), if the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before June 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report.
(ii)After receiving a finding in an audit report pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)Notwithstanding subparagraph (B), if the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report.
(ii)After receiving an audit report pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report of a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction no later than 60 calendar days after the Superintendents notification if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools certifies as of June 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to chartering authorities, the county superintendent of schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(s)Audits of regional occupational centers and programs are subject to this section.
(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accordance with the generally accepted government auditing standards promulgated by the United States General Accountability Office.
(v)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 15.SEC. 16.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(2)(A)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(B)If a charter school has an approved audit extension pursuant to subdivision (b), a failure to file an audit on or before the legal deadline shall not be a cause for or contributing justification for charter nonrenewal or revocation. Failure to file an audit with the chartering authority on or before the legal deadline due to the inability of a charter school to contract for an audit due to market conditions of available auditors shall not be a cause for or contributing justification for charter nonrenewal or revocation.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent and the Controller on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(b)(1)(A)(i)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(ii)If a charter school has an approved audit extension pursuant to this subdivision, a failure to file an audit on or before the legal deadline shall not be a cause for or contributing justification for charter nonrenewal or revocation. Failure to file an audit with the chartering authority on or before the legal deadline due to the inability of a charter school to contract for an audit due to market conditions of available auditors shall not be a cause for or contributing justification for charter nonrenewal or revocation.
(B)As applicable pursuant to subdivision (a), the Controller may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)An extension granted pursuant to this subdivision shall be appropriate if the extension adheres to all of the following requirements:
(A)The local educational agency and the auditor have certified that the audit cannot be completed on time due to unforeseen circumstances or complex situations.
(B)An extension shall be the shortest amount of time reasonable given the extenuating circumstances justifying the extension.
(C)Extensions shall be in increments of no longer than 30 calendar days.
(D)Extensions shall not be granted past March 31.
(3)As applicable pursuant to subdivision (a), the county superintendent of schools or chartering authority may, after consultation with the governing board or body of a local educational agency, the auditors under contract to the local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the local educational agency. The county superintendent of schools or chartering authority or the Controller shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(4)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may request the Controllers office to investigate the situation and initiate action as provided in subdivision (c).
(c)(1)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may, after consultation with the governing board or body of the local educational agency and the auditor under contract with the local educational agency, do any of the following:
(A)Accept the action of the county superintendent of schools, the chartering authority, or the Superintendent, permitted by subdivision (b).
(B)Conduct the audit and prepare the auditors report, using the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools. local educational agency.
(C)Contract with any qualified certified public accountant or public accountant, using the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the local educational agency.
(D)Consistent with the limits described in paragraph (2) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)The Controllers office shall consult with the governing board or body of the local educational agency, the auditors under contract to the local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(d)Notwithstanding any extension granted under subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under subparagraph (B) or (C) of paragraph (1) of subdivision (c).
(e)If an extension has not been requested or granted and the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the local educational agency and the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than 15 calendar days from the due date established under Section 41020.
(f)The Controller shall notify the appropriate policy committees of the Legislature and the Department of Finance if local educational agencies are unable to contract for an audit due to market conditions of available auditors.
(g)By September 30, 2028, and every three years thereafter, the Controller shall, in consultation with the entities listed in Section 14502.1, provide recommendations to the appropriate committees of the Legislature regarding outdated or ineffective audit requirements in statute.
(h)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 16.SEC. 17.Section 41020.3 of the Education Code is amended to read:41020.3.By March 31 of each year, or 45 days after the issuance of an audit report, whichever is later, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Section 35145 or 47604.1, as applicable.
SEC. 17.SEC. 18.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202728 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, include the instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted: require all of the following:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by grade, month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study. Monthly enrollment shall be reported as the enrollment recorded on the last day of the school month, as that term is described in Section 37201.(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.(2)(A)Schedule of pupil attendance: schedule of pupil attendance by grade, month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.(5)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.(6)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.(7)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.(1)For local educational agencies, as part of supplementary information, or other information as deemed applicable under generally accepted auditing standards, schedules of all of the following, as applicable:
(A)Pupil enrollment and attendance, including total pupil enrollment and attendance by track for each school month, and, if the local educational agency operates a multitrack year-round calendar, perform an analytical procedure and identify and disclose unusual increases or decreases in enrollment by month that are material and provide an opportunity for the local educational agency to provide an explanation in the note.
(B)The largest 25 aggregate payments or transfers.
(C)For school districts and county offices of education, pupil-to-teacher ratios for independent study programs.
(D)Loans with related entities or employees.
(E)For charter schools, board members and related entities.
(F)The five highest paid employees.
(2)For nonclassroom-based charter schools, as part of supplementary information, or other information as deemed applicable under generally accepted auditing standards, additional instructions to require schedules of the components of funding determinations pursuant to Section 47634.2:
(A)The components used to determine the pupil-to-teacher ratio and the resulting ratio.
(B)The components used to determine the percent of revenue expended on certificated staff salaries and benefits, and the resulting percentage.
(C)The components used to determine the percent of revenue expended on instruction and related services, and the resulting percentage.
(3)(A)For nonclassroom-based charter schools that are part of a network, as defined in Section 47634.3, additional instructions to require documents needed to verify the data in paragraph (2) to be provided to the auditor and the department contemporaneously and include the unique teacher identifier, full-time equivalency, and salary and benefit amounts on an electronic template developed by the department.
(B)(i)As an alternative to having the department perform the analysis for a network pursuant to paragraph (2) of subdivision (d) of Section 47634.2, nonclassroom-based charter schools that are part of a network, as defined in Section 47634.3, may instead elect one of the following:
(I)A consolidated audit which includes the entire network.
(II)A combined audit which includes the entire network.
(III)A performance audit completed under Government Auditing Standards for the funding determination components that includes the entire network.
(ii)The auditor shall perform additional procedures to determine whether any of the components of paragraph (2) are inappropriately double counted in multiple charter schools across the network that adversely impact any of the components of paragraph (2). If such noncompliance is identified, the auditor shall report it as an audit finding.
(b)Commencing with the 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and or Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling are required to be performed and selected, the auditor shall independently identify the sample and make that selection personally. in a manner that cannot be predicted, in accordance with professional standards.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local educational agency pursuant to the test of compliance sample table in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable. representative of and inclusive of all the local education agencies tracks and grade spans as applicable and in consideration of materiality levels established in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(D)For charter schools that are a component entity of a school district or county office of education, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.(D)For an audit of a locally funded charter school that is governed by a school district or county office of education and that is included in the school districts or county office of educations audit, the auditor shall ensure that all samples completed are representative of each of the local educational agencies included in the audit.
(B)(3)Charter schools that are a component entity of locally funded and governed by a school district or county office of education shall report charter school financial data separately from the general fund of the school district or county office of education, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county office of education. The education. If the school district or county office of education audit includes more than one charter school, or if the charter school fund is not a major fund, the auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment and residency: for nonclassroom-based instruction, verify enrollment and residency of pupils.(B)(4)Using appropriate sampling techniques, verify pupil enrollment for independent study programs at local educational agencies and verify that a pupils residence is located within the jurisdiction of the county in which the chartering authority is located or an adjacent county, meets applicable residency requirements based on residency documentation provided by the parent or guardian of the pupil at the time of enrollment. pupil, emancipated pupil, or other custodian of pupil, or, in the case of a pupil over 18 years of age, by the pupil.
(C)State in a finding any inappropriately reported enrollment or residency identified.(5)(A)Chartering authority input: require auditors to consult with and interview inquire of the chartering authority for input and information, including a focus on during planning stages of the audit of a charter school authorized by the chartering authority to assist the auditor in identifying potential audit risks, including, but not limited to, fiscal and compliance areas that the charter school excels in or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(B)County office of education input: require auditors to consult with and inquire of the county office of education during planning stages of the audit of a school district or educational joint powers authority to assist the auditor in identifying potential audit risks, including, but not limited to, fiscal and compliance areas that the school district or educational joint powers authority may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(C)Superintendent input: require auditors to consult with and inquire of the Superintendent during planning stages of the audit of a county office of education to assist the auditor in identifying potential audit risks, including, but not limited to, fiscal and compliance areas that the county office of education may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: entity: determining if a related entity, as defined by generally accepted accounting principles, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school. A charter school that files a federal tax return shall include all related entities identified on the federal tax return.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.(B)Verify, for a nonclassroom-based charter school, the calculation of the schools certificated staff salaries and benefits using the documentation provided to the department in the funding determination pursuant to clause (ii) of subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2 and report any discrepancies as a finding.(7)(A)Verification: For a charter school, verify if more than 20 percent of the charter schools total average daily attendance was generated through independent study, pursuant to Section 47634.2.
(C)(B)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratio and calculations required pursuant to Section 51745.6 and report any discrepancies as a finding. For charter schools, verify the pupil-to-teacher ratio and calculations using the documentation provided to the department pursuant to clause (i) of subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2. 51745.6.
(8)Payments: select a sample of all payments and verify that those payments are legal and have proper authorization. The sampling shall include, but not be limited to, payments obtained through credit card statements, debit card statements, other electronic payment methods and media, and bank statements.
(9)Nonclassroom-based charter school network: for For nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school is in a network of nonclassroom-based charter schools, as defined in Section 47634.3.
(A)Whether the(B)If a determination is made pursuant to subparagraph (A), identify whether the charter school employs teachers who are required to provide instruction to pupils enrolled in nonclassroom-based charter schools other than the charter school holding the teachers employment contract.
(B)Whether the(C)If a determination is made pursuant to subparagraph (A), identify whether the charter school has teachers who are required to provide instruction to pupils who attend another nonclassroom-based charter school.
(C)Whether the charter school is in a network of nonclassroom-based charter schools, as defined in Section 47634.3.(D)If a determination is made pursuant to subparagraph (A), (B), or (C), identify the other nonclassroom-based charter schools within the network of nonclassroom-based charter schools and report these results to the chartering authority of the charter school and the department. department in a reporting method determined by the department.
(10)Funding determination thresholds: for nonclassroom-based charter schools, determine all of the following and report any discrepancies: following:
(A)Whether the charter school submitted a determination of funding request to the state board.
(B)Whether the state board approved the determination of funding request.(B)The most recently approved funding determination made by the state board.
(C)Whether the charter school is complying with the thresholds has met the pupil-to-teacher ratio pursuant to Section 51745.6 and both the percentage of revenue expended on certificated staff salaries and benefits, and the percentage of revenue expended on instruction and related services included in the state board approved determination of funding using the documentation provided to the department pursuant to subparagraph (A) of paragraph (3) of subdivision (d) of subdivision (c) of Section 47634.2. Verify the percentage of revenue expended on instruction and related services with detailed information and financial records necessary to determine the qualifying expenditures consistent with the definition of instruction and related services.
(11)Identify any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) or 10 percent of the local educational agencys total revenue and other sources, whichever is less, together with a written explanation from the local educational agency regarding the local educational agencys purpose for each of those expenditures.
(12)Charter school oversight: ensure the chartering authority has documentation of completing the oversight tasks in subdivisions (a), (c), and (d) of Section 47604.32 and teacher assignment monitoring pursuant to Section 44258.9.
(13)(A)For schools that offer grades 10, 11, or 12, inclusive, at local educational agencies, perform an analytical procedure and identify unusual enrollment patterns between consecutive grade levels and pupils that change grade levels during the school year for that school and report as a note.
(B)Identify if a pupil advanced to grade 12 without completing a California Assessment of Student Performance and Progress assessment in English language arts/literacy and mathematics using pupil cohort data and assessment data and report as a note. Report the total number of pupils disenrolled from the school after census day, in a note. A local educational agency shall provide the auditor necessary assessment data from the Test Operations Management System or subsequent successor system.
(14)Verify documentation of pupil work products pursuant to clause (iii) of subparagraph (A) of paragraph (2) of subdivision (b) of Section 51747.5.
(c)Commencing with the 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school. library of sample letters and schedules applicable to the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting requirements for school districts and charter schools as a means of guidance to auditors.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 18.SEC. 19.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section does not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other laws.
SEC. 19.SEC. 20.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other law, the auditor conducting an annual audit pursuant to Section 41020 shall, upon request, provide pertinent financial and compliance information related to the circumstances listed in subdivision (b) to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)The circumstances described in subdivision (a) include all of the following:
(1)The local educational agency has a financial audit finding, an audit finding for a material weakness or significant deficiency in internal controls, or a material noncompliance finding.
(2)The audit of a local educational agency contains an audit opinion other than unmodified.
(3)The audit has included a statement that there is substantial doubt about the local educational agencys ability to continue as a going concern for a reasonable period of time.
(4)A determination has been made that a school district may not be able to meet its obligations of the current or subsequent fiscal year pursuant to Section 42127.6.
(5)There is evidence that the school district is showing fiscal distress under the standards and criteria adopted in Section 33127 pursuant to paragraph (1) of subdivision (a) of Section 42127.6.
(6)A school district has a negative unrestricted fund balance or negative cash balance pursuant to Section 42127.5.
(7)A school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.
(8)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(9)A quality control review by the Controller is triggered pursuant to Section 14504.2.
(c)Information provided by an auditor to the chartering authority, a county superintendent of schools, the Controller, or the Superintendent pursuant to this section shall be submitted simultaneously to the named school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 20.SEC. 21.Section 41341 of the Education Code is amended to read:41341.(a)(1)If, during any fiscal year, the amount apportioned to a school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one unit of average daily attendance, the Superintendent, in accordance with regulations that the Superintendent is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Superintendent pursuant this subdivision shall be added to or allowed from any portion of the State School Fund.
(2)Notwithstanding paragraph (1), excesses may be withheld or deficiencies added to apportionments on account of audit exceptions reported in an audit or review, as described in subdivision (e) of Section 41344, or audit or review conducted by a certified public accountant or public accounting firm designated by a governmental agency that provided the local educational agency the opportunity to provide a written response.
(3)If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one or more units of average daily attendance, the school district, county office of education, or charter school shall report the corrected amount to the Superintendent.
(b)If, during any fiscal year, the amount apportioned to a community college district or to any fund from Section B of the State School Fund differs either positively or negatively from the amount to which the community college district or fund was entitled, by an amount equal to the funding of one full-time equivalent student, the Chancellor of the California Community Colleges, in accordance with regulations that the chancellor is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Chancellor of the California Community Colleges under this subdivision shall be added to or allowed from any portion of the State School Fund.
SEC. 21.SEC. 22.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other law, a local educational agency shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 23.Section 42100 of the Education Code is amended to read:42100.(a)On or before September 15, the governing board of each school district shall approve, in a format prescribed by the Superintendent of Public Instruction, Superintendent, an annual statement of all receipts and expenditures of the school district for the preceding fiscal year and shall file the statement, along with the statement received pursuant to subdivision (b), with the county superintendent of schools. On or before October 15, the county superintendent of schools shall verify the mathematical accuracy of the statements and shall transmit a copy to the Superintendent of Public Instruction. Superintendent.
(b)On or before September 15, each charter school shall approve, in a format prescribed by the Superintendent of Public Instruction, Superintendent, an annual statement of all receipts and expenditures of the charter school for the preceding fiscal year and shall file the statement with the entity that approved the charter school.
(c)The forms prescribed by the Superintendent of Public Instruction shall be adopted as regulations by the State Board of Education, and may be amended periodically to accommodate changes in statute or government reporting standards.(c)Commencing on June 30, 2031, Section 15071 of Title 5 of the California Code of Regulations is repealed and the charter school alternative form authorized in that section shall no longer be used.
SEC. 22.SEC. 24.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares both of the following:
(A)That continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low.
(B)That local educational agencies, state officials, pupils, and guardians have a vested interest in knowing and understanding the capacity of local educational agencies to fill all available and funded teaching assignments with educators who are fully credentialed for the subjects and pupils they are teaching, and a vested interest in understanding the scope of the teacher shortage across the TK/K12 educational system, including, but not limited to, those instances where vacancies cannot be filled, resulting in the use of substitutes, increases in class size, or cancellation of courses or classes.
(2)To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(3)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(4)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions and identifications apply:
(1)(A)An instance of a teacher shortage means an identification by the commission that a course or class assignment is not any of the following:
(i)Permanently filled as of Census Day.
(ii)Filled by a fully credentialed teacher.
(iii)Filled by a teacher who is appropriately assigned.
(B)A fully credentialed teacher means an individual who has completed a teacher preparation program, as defined in subdivision (e) of Section 44225.7, and who holds a valid preliminary or clear credential issued based upon the completion of that teacher preparation program.
(C)An assignment is permanently filled as of Census Day if the educator serving as a teacher has been contracted as of Census Day to provide instruction for either the entire school year or for a one-semester course for the entire semester.
(D)A teacher is appropriately assigned if the teacher holds a credential, permit, or waiver issued by the commission that contains an authorization to legally teach in the setting, in the subject area, and the pupil population associated with the assignment.
(2)An unfilled position shall be identified in each instance where a local educational agency has attempted to fill or is actively trying to fill an open and funded position, but is unable to do so.
(3)A vacant position shall be identified in each instance where, as of Census Day, a course or class assignment has not been permanently filled by a single-designated certificated employee serving for either the entire school year or for a one-semester course for the entire semester. For purposes of identifying an instance of a teacher shortage pursuant to paragraph (3) of subdivision (h), a vacant position shall be limited to an employee serving as a teacher.
(4)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(5)Local educational agency means a school district, county office of education, charter school, or state special school.
(6)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract. For purposes of this section, in a charter school, misassignment shall apply only to employees in teaching positions.
(7)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(8)System, unless the context requires otherwise, means the California Statewide Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Sections 10600 and 60900 for its functioning.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 11495), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and appropriately assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those appropriately assigned and misassigned, at the schoolsite, local educational agency, county, and state levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)(A)Identify instances of a teacher shortage in each instance where, as of Census Day, a course or class assignment is permanently filled by an employee who is not fully credentialed or who is not appropriately assigned, as identified in clauses (i) to (vii), inclusive, below:
(i)Individuals who are fully credentialed teachers and are serving outside their credential area based on holding a valid commission-issued permit authorizing the subject, setting, or pupil population being taught.
(ii)Individuals who are fully credentialed teachers and are serving outside of their credential area pursuant to a statute or Title 5 of the California Code Regulations that allows a local educational agency to otherwise legally assign the individual at the local level.
(iii)Individuals serving on a valid district or university intern credential that authorizes the subject, setting, or pupil population being taught.
(iv)Individuals who are fully credentialed teachers but are teaching a subject, setting, or pupil population not authorized by their credential area, excluding assignments authorized by subdivision (b) of Section 80005 of Title 5 of the California Code of Regulations.
(v)Individuals serving on the basis of a valid permit issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vi)Individuals serving on a short-term or variable-term waiver document issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vii)Individuals who are identified as misassigned by the commission, other than those educators described in clause (iv).
(B)Identify instances of a teacher shortage in each instance where, as of Census Day, a local educational agency identifies a vacant position or an unfilled position.
(4)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county levels.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)This section does not change existing rights or obligations, including, but not limited to, those specified in Sections 33126 and 33315.
(n)(1)A teacher employed by a local educational agency and offering a course in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
(2)Paragraph (1) does not authorize a local educational agency to assign a teacher of record that is not an employee of the local educational agency.
SEC. 23.SEC. 25.Section 45037 of the Education Code is amended to read:45037.(a)Except as provided in Section 45036, for the a fiscal year 200102 and for any fiscal year thereafter in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, consistent with the term described in Section 44002, the school district, county office of education, or charter school that the person is employed by shall be assessed a penalty that shall be calculated as provided in subdivision (b) and withheld from state funding otherwise due to the school district, county office of education, or charter school.
(1)Notwithstanding Section 46300, the attendance of the noncertificated persons pupils during the period of service shall be included in the computation of average daily attendance.
(2)The noncertificated persons period of service shall not be excluded from the determination of eligibility for instruction time pursuant to Article 8 (commencing with Section 46200) of Chapter 2 of Part 26.
(b)(1)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, add the total number of schooldays on which the person rendered any amount of the service.
(2)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, for a period of service during which the person did not have a valid certification document, add the number of schooldays on which the person rendered any amount of the service without a valid certification document.
(3)Divide the number determined in paragraph (2) by the number determined in paragraph (1) and carry the result to four decimal places.
(4)Multiply a school districts or charter schools local control funding formula grant apportionment for the fiscal year, calculated pursuant to Section 42238.02, as implemented by Section 42238.03, or a county office of educations local control funding formula alternative education grant computed pursuant to Section 2574, as apportioned pursuant to Section 2575, for the fiscal year, for the program in which the noncertificated person rendered service by the number determined in paragraph (3).
(c)Beginning in 200203, if If a county office of education releases a warrant in favor of a person for whom a period of school district or charter school service is included in the calculation set forth in paragraph (2) of subdivision (b), and the warrant is either compensation for employment as a teacher or for employment in some other capacity if the county office of education has direct knowledge or is in possession of information giving rise to a reasonable inference that the person is rendering service as a teacher, the county office of education shall be assessed a penalty. The penalty assessed to a county office of education for any fiscal year in which one or more school district or charter school teachers did not have a valid certification document shall be equal to the lesser of three amounts as follows:
(1)Fifty percent of all penalties assessed for that fiscal year to all school districts or charter schools in the county office of educations jurisdiction pursuant to subdivision (b).
(2)One-half percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when two or fewer school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(3)One percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when three or more school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(d)Except as provided in Section 41344.1, nothing in this section may be waived in whole or in part.
SEC. 24.SEC. 26.Section 45125.1 of the Education Code is amended to read:45125.1.(a)Any entity that has a contract with a local educational agency shall ensure that any employee who interacts with pupils has a valid criminal records summary as described in Section 44237. When the contracting entity performs the criminal background check, it shall immediately provide any subsequent arrest and conviction information it receives to any local educational agency that it is contracting with pursuant to the subsequent arrest service.
(b)(1)This section does not apply to an entity providing services to a local educational agency, as described in subdivision (a), in an emergency or exceptional situation, such as when pupil health or safety is endangered or when repairs are needed to make school facilities safe and habitable.
(2)Notwithstanding subdivision (a), an employee of any entity that has a contract with a local educational agency, and that offers work experience opportunities for pupils, including, but not limited to, opportunities pursuant to Section 51760, 52336, 52372, 52410, or 52460, Article 1 (commencing with Section 52300), Article 5 (commencing with Section 52381), or Article 7 (commencing with Section 52450) of Chapter 9 of Part 28 of Division 4, Chapter 16.5 (commencing with Section 53070) of Part 28 of Division 4, Article 5 (commencing with Section 54690) of Chapter 9 of Part 29 of Division 4, or Part 54.5 (commencing with Section 88820) of Division 7 of Title 3, or workplace placements as part of a pupils individualized education program, including, but not limited to, the services described in Article 3 (commencing with Section 56470) of Chapter 4.5 of Part 30 of Division 4, is not required to have a valid criminal records summary pursuant to subdivision (a) if all of the following requirements are met:
(A)At least one adult employee in the workplace during the pupils work hours, who has direct contact with the pupil and has been designated by the employer as the employee of record who is responsible for the safety of the pupil, has a valid criminal records summary as described in Section 44237.
(B)A staff representative of the local educational agency makes visitations as specified in a pupils individualized education program, or, if unspecified, at least once every three weeks to consult with the pupils workplace liaison, observe the pupil at the workplace, and check in with the pupil to ensure the pupils health, safety, and welfare, including by addressing any concerns the pupil has raised.
(C)The parent or guardian of the pupil has signed a consent form regarding the pupils work placement, attesting that the parent or guardian understands the duties assigned to the pupil and the nature of the workplace environment.
(3)If a pupil participates in services provided by a contractor as part of an independent study program and the pupil is under the immediate supervision and control of the pupils parent or guardian during the provision of those services, the local educational agency shall do either of the following:
(A)Verify completion of a valid criminal records summary for all employees of the contractor who interact with the pupil.
(B)Ensure that the parent or guardian of the pupil has signed a consent form before the pupils interaction with a person employed by the contractor, attesting that the parent or guardian understands that the person employed by the contractor has not completed a valid criminal records summary as described in Section 44237.
(c)On a case-by-case basis, a local educational agency may require an entity with whom it has a contract to comply with the requirements of this section for employees in addition to those described in subdivision (a). The entity shall prepare and submit those employees fingerprints to the Department of Justice, as described in subdivision (a).
(d)(1)The Department of Justice shall ascertain whether the individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has been arrested or convicted of any crime insofar as that fact can be ascertained from information available to the Department of Justice. Upon implementation of an electronic fingerprinting system with terminals located statewide and managed by the Department of Justice, the Department of Justice shall ascertain the information required pursuant to this section within three working days. When the Department of Justice ascertains that an individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has a pending criminal proceeding for a felony as defined in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1, the Department of Justice shall notify the employer designated by the individual of that fact. The notification shall be delivered by telephone or email to the employer.
(2)The Department of Justice, at its discretion, may notify the local educational agencies in instances when the employee is defined as having a pending criminal proceeding described in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1.
(3)The Department of Justice shall forward one copy of the fingerprints to the Federal Bureau of Investigation to verify any record of previous arrests or convictions of the applicant. The Department of Justice shall review the criminal record summary it obtains from the Federal Bureau of Investigation and shall notify the employer only as to whether or not an applicant has any convictions or arrests pending adjudication for offenses that, if committed in California, would have been punishable as a violent or serious felony. The Department of Justice shall not provide any specific offense information received from the Federal Bureau of Investigation. The Department of Justice shall provide written notification to the contract employer only concerning whether an applicant for employment has any conviction or arrest pending final adjudication for any of those crimes, as specified in Section 45122.1, but shall not provide any information identifying any offense for which an existing employee was convicted or has an arrest pending final adjudication.
(e)(1)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall not permit an employee to interact with pupils until the Department of Justice has ascertained that the employee has not been convicted of a felony as defined in Section 45122.1.
(2)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a felony if the employee has obtained a certificate of rehabilitation and pardon pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
(3)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a serious felony that is not also a violent felony if that employee can prove to the sentencing court of the offense in question, by clear and convincing evidence, that the employee has been rehabilitated for the purposes of schoolsite employment for at least one year. If the offense in question occurred outside this state, then the person may seek a finding of rehabilitation from the court in the local educational agency in which the employee is a resident.
(f)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall certify in writing to the local educational agency that neither the employer nor any of its employees who are required by this section to submit or have their fingerprints submitted to the Department of Justice and who may interact with pupils have been convicted of a felony as defined in Section 45122.1.
(g)Where reasonable access to the statewide electronic fingerprinting network is available, the Department of Justice may mandate electronic submission of the fingerprint cards and other information required by this section.
(h)(1)For purposes of this section, an individual operating as a sole proprietor of an entity that has a contract with a local educational agency, as described in subdivision (a), shall be considered an employee of that entity.
(2)To protect the safety of any pupil that may interact with an employee of an entity that is a sole proprietorship and has a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c), a local educational agency shall prepare and submit the employees fingerprints to the Department of Justice, as described in subdivision (a).
(i)For purposes of this section, local educational agency means a school district, county office of education, or charter school.
SEC. 25.SEC. 27.Section 46149 is added to the Education Code, immediately following Section 46148, to read:46149.Notwithstanding any other law, a school district, county office of education, or charter school that offers grades 10 and 12 shall also offer and enroll pupils in grade 11.
SEC. 26.SEC. 28.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 27.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:(1)Identify at least one staff member as a contact person for the charter school.(2)(A)Visit each charter schoolsite, resource center, meeting space, and satellite facility established by the charter school at least annually.(B)Commencing July 1, 2028, annually attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and review the agendas and minutes of those meetings to monitor actions that may be taken.(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.(4)(A)Monitor the fiscal condition of each charter school under its authority.(B)Commencing July 1, 2028, annually monitor payments of each charter school under its authority to verify that the payments are legal and have proper authorization. Monitoring shall include, but not be limited to, a review of credit statements, debit card statements, other electronic payment methods and media, and bank statements.(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:(A)A renewal of the charter is granted or denied.(B)The charter is revoked.(C)The charter school will cease operation for any reason.(6)(A)Commencing July 1, 2028, annually verify all of the following for a nonclassroom-based charter school:(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).(7)Commencing July 1, 2028, a chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.SEC. 29.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)Visit each charter school schoolsite approved in a petition or material revision and established by the charter school at least annually.
(3)Ensure Verify that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)Monitor the fiscal condition of each charter school under its authority.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)(i)A renewal of the charter is granted or denied. granted.
(ii)Notwithstanding any other law, a chartering authoritys failure to comply with paragraph (1) shall not be grounds for denying the renewal of the charter.
(B)A renewal of the charter is denied.
(B)(C)The charter is revoked.
(C)(D)The charter school will cease operation for any reason.
(b)The cost of performing the duties required by this section subdivision (a) shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
(c)Commencing July 1, 2028, each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)(A)Visit each resource center, meeting space, and satellite facility approved in a charter petition or material revision and established by the charter school upon the opening, and, subject to subparagraph (B), as necessary thereafter.
(B)Visit each resource center, meeting space, and satellite facility approved in a charter petition or material revision and established by the charter school at least once every two years.
(2)Annually attend, either virtually or in person, at least one meeting of the governing body of the charter school.
(3)Review the agendas and minutes of the meetings of the governing body of the charter school.
(4)Annually review a random sample of expenditures to determine whether the charter school might be engaging in misappropriating public funds and violating the policies of the governing body of the charter school. A random sample of expenditures shall include credit card statements, debit card statements, bank and financial institution statements, and other electronic payment methods.
(5)The chartering authoritys annual financial and compliance audit oversight responsibilities of the charter schools it authorizes pursuant to Section 41020.
(6)Once a chartering authority has completed its annual financial and compliance audit oversight responsibilities pursuant to section 41020, identify and provide notification to the governing body of the charter school of any material concern arising out of the chartering authoritys ongoing oversight and monitoring activities.
(d)(1)Commencing July 1, 2028, each chartering authority, in addition to any other duties imposed by this part, shall annually review, with respect to each nonclassroom-based charter school under its authority, the charter schools average daily attendance. If the average daily attendance reported by a charter school to the department for apportionment purposes has increased by 10 percent or more relative to the applicable first, second, and annual principal apportionment reporting for independent study average daily attendance, the chartering authority shall review a sample of independent study written agreements and work samples from each track to gauge whether the documents generally align with the reported attendance.
(2)If a review pursuant to paragraph (1) does not generally align with the reported attendance during the applicable apportionment reporting, including subsequent corrected reports submitted to the chartering authority, the chartering authority shall request additional information to explain the misalignment.
(e)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform verification duties described in this section.
SEC. 30.Section 47604.33 of the Education Code is amended to read:47604.33.(a)Each (1)Pursuant to Section 47604.35, each charter school shall shall, except as provided in subdivision (e), annually prepare and submit the following reports using the departments Standardized Account Code Structure Web financial reporting system to its chartering authority and the county superintendent of schools, or only to the county superintendent of schools if the county board of education is the chartering authority:
(1)(A)On or before July 1, a preliminary budget. For a charter school in its first year of operation, the information submitted pursuant to subdivision (h) of Section 47605 satisfies this requirement.
(2)On or before July 1, a local control and accountability plan and an annual update to the local control and accountability plan required pursuant to Section 47606.5.(3)(B)On or before December 15, an interim financial report. This report shall reflect changes through October 31.
(4)(C)On or before March 15, a second interim financial report. This report shall reflect changes through January 31.
(5)(D)On or before September 15, a final unaudited report for the full prior year.
(2)Each charter school shall annually prepare and submit, on or before July 1 of each year, a local control and accountability plan and an annual update to the local control and accountability plan required pursuant to Section 47606.5 to its chartering authority and the county superintendent of schools, or only to the county superintendent of schools if the county board of education is the chartering authority.
(b)The chartering authority shall use any financial or other information it obtains from the charter school, including, but not limited to, the reports required by this section, to perform the duties described in subdivision (a) of Section 47604.32, including monitoring the fiscal condition of the charter school.
(c) The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
(d)Commencing with the 202829 fiscal year, a charter school in its first year of operation shall only be required to comply with the requirement to submit the reports identified in subparagraphs (B), (C), and (D) of paragraph (1) of subdivision (a) using the Standardized Account Code Structure Web financial reporting system for that year.
SEC. 28.SEC. 31.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall is authorized to revise regulations regulations, including emergency regulations, to require that charter schools report prepare periodic and annual financial data data, as required by subdivision (a) of Section 47604.33, using the Standardized Account Code Structure (SACS) based forms and reports in the same manner and on the same form prescribed for school districts in accordance with all of the following: districts. SACS reporting shall be consistent with the annual audit when one or more local educational agencies are included in the annual audit. This requirement shall apply as follows:
(a)Charter Commencing with the 202829 fiscal year, for charter schools with an a 202728 average daily attendance of 5,000 or more pupils at the second principal apportionment and all nonclassroom-based charter schools shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year. schools, as defined in paragraph (2) of subdivision (e) of Section 47612.5, as determined at the time of the 202728 second principal apportionment.
(b)Charter schools, excluding nonclassroom-based charter schools, Commencing with the 202930 fiscal year, for charter schools with an a 202829 average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year. at the second principal apportionment and all nonclassroom-based charter schools, as defined in paragraph (2) of subdivision (e) of Section 47612.5, as determined at the time of the 202829 second principal apportionment.
(c)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.(c)Commencing with the 203031 fiscal year, for all charter schools.
(d)Commencing with the 202829 fiscal year, for all new charter schools authorized on or after January 1, 2027.
SEC. 32.Section 47604.6 is added to the Education Code, immediately following Section 47604.5, to read:47604.6.(a)On or before March 1, 2026, the Legislative Analyst's Office shall provide the Legislature, consistent with Section 9795 of the Government Code, with an estimate of the ongoing costs for charter schools related to the new requirements established by Assembly Bill 84 of the 202526 Regular Session, including, but not limited to, new audit requirements and approval requirements by the governing body of a charter school for contracts over one hundred thousand dollars ($100,000).
(b)It is the intent of the Legislature that the state provide additional funding through the mandates block grant, beginning with the 202627 fiscal year, based on the cost estimate provided by the Legislative Analysts Office.
SEC. 29.SEC. 33.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph if it has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership. Charter schools proposed in a school district satisfying one of these conditions shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by both the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers in charter schools shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall provide for an annual and independent financial and compliance audit in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 30.SEC. 34.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(L)Admission policy and procedures, consistent with subdivision (e).
(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall provide for an annual and independent financial and compliance audit in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 31.SEC. 35.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 32.SEC. 36.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize, except as provided in subdivision (d). A school district with an average daily attendance of fewer than 10,000 pupils shall not authorize one or more nonclassroom-based charter schools or approve a material revision to expand one or more existing nonclassroom-based charter schools if doing so would result in more than a totality of 100 percent of the average daily attendance of the school district authorizing the charter.
(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)Except as provided in subdivision (d), if the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
(d)(1)Notwithstanding subdivisions (a) and (c), a chartering authority that authorized a nonclassroom-based charter school in operation on or before December 31, 2025, and that exceeds the limits established in subdivision (a), may reauthorize and continue to be the chartering authority for that nonclassroom-based charter school if, as of December 31, 2025, the chartering authority employs at least four full-time equivalent executive-level staff members whose primary responsibilities are related to the following job classifications and areas of employment:
(A)Superintendent.
(B)Chief business official.
(C)Human resources.
(D)Special education.
(E)Curriculum.
(2)Staff members who have the job responsibilities described in subparagraphs (A), (C), (D), and (E) of paragraph (1) shall hold an administrative credential issued by the Commission on Teacher Credentialing, as required by Section 35028.
SEC. 33.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall include, but not be limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:(1)Acting as the fiscal agent for the program.(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.(4)Facilitating an annual statewide conference for chartering authorities.(5)Establishing and facilitating an advisory board, as provided in subdivision (d), to provide input on the development and full implementation of services provided by the program.(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (c) to measure the programs continual improvement and program fidelity, and to document the programs impact.(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:(A)The role and functions of the advisory board.(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.(C)The terms of advisory board members.(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.(E)Meetings, including the frequency of meetings.(F)The rules of order.(G)The process for amending bylaws.(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:(i)Responsibility: the duty to serve the states pupils and the public.(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.(iii)Fairness: impartial and just treatment of all stakeholders.(iv)Knowledge: understanding of charter school law and practice.(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.SEC. 34.SEC. 37.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder. The state board shall adopt regulations that apply Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 to charter schools. To the extent that these regulations concern the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)(1)Notwithstanding any other law and except as provided in paragraph (1) of subdivision (e), a charter school that has an approved charter may receive funding for nonclassroom-based instruction only if a determination for funding is made pursuant to Section 47634.2 by the state board. The determination for funding shall be subject to any conditions or limitations the state board may prescribe. The state board shall adopt regulations on or before January 1, 2027, to commence with the 202728 fiscal year, that define and establish general rules governing nonclassroom-based instruction that apply to all charter schools and to the process for determining funding of nonclassroom-based instruction by charter schools offering nonclassroom-based instruction other than the nonclassroom-based instruction authorized by paragraph (1) of subdivision (e). Nonclassroom-based instruction includes, but is not limited to, independent study, home study, workstudy, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(2)A charter school that receives a determination pursuant to Section 47634.2 is not required to reapply annually for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the state board. Notwithstanding any other law, the state board may require a charter school to provide updated information at any time it determines that a review of that information is necessary. The state board may terminate a determination for funding if updated or additional information requested by the state board is not made available to the state board by the charter school within a reasonable amount of time or if the information otherwise supports termination. A determination for funding pursuant to Section 47634.2 shall not exceed five years.
(3)A charter school that offers nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2 to receive funding each time its charter is renewed or materially revised pursuant to Section 47607. A charter school that materially revises its charter to offer nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2.
(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations pursuant to paragraph (1) of subdivision (d) specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of data collection in the California Longitudinal Pupil Achievement Data System (CALPADS), virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.(5)(4)Notwithstanding any other law, the state board and the Superintendent shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 35.SEC. 38.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other provision of law, through the 202526 fiscal year, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, shall be adjusted by the state board. The state board shall update the regulations setting forth criteria and processes for the determination of funding for nonclassroom-based instruction, and, at a minimum, the regulations shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the state board shall consider, among other factors it deems appropriate, the amount of the charter schools total expenditures on certificated employee salaries and benefits, the amount of the charter schools total expenditures on instruction and related services, expenditures on facilities pursuant to paragraph (2) of subdivision (e), and the teacher-to-pupil ratio in the school.
(2)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board in accordance with this section.
(b)(1)The state board shall adopt regulations setting forth criteria for the determination of funding for nonclassroom-based instruction and shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the state board shall consider, among other factors it deems appropriate, all of the following:(A)The amount of the charter schools total budget expended on certificated employee salaries and benefits and on schoolsites.(B)The teacher-to-pupil ratio in the school. (C)One-time local, state, and federal funds.(D)Expenses for facilities.(E)Budget reserves.(3)If the state board denies request for a determination for funding or provides a reduction as authorized by subdivision (a), the state board shall, in writing, give the reasons for its denial or reduction and, if appropriate, may describe how any deficiencies or problems may be addressed.
(4)Prior to a recommendation by the Advisory Commission on Charter Schools that a determination of funding request be denied or approved at a percentage lower than that requested is forwarded to the state board, the affected charter school shall be given 60 calendar days to amend its determination of funding request or to provide additional information in support of the request. Based upon consideration of the amended request or any additional information that may be provided, the Advisory Commission on Charter Schools may modify its recommendation to the state board.
(2)(b)The state board shall appoint an advisory commission to recommend criteria to the state board in accordance with this section if it has not done so by January 1, 2002. The advisory commission shall include, but is not limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
(c)Commencing with the 202728 fiscal year, the state boards Advisory Commission on Charter Schools shall recommend to the state board the approval of a funding determination request submitted by a charter school consistent with all of the following:
(1)(A)Approval of the request at 70 percent if both of the following criteria are met, unless there is a reasonable basis to recommend otherwise:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 35 percent but less than 40 percent. percent of total public revenue.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 60 percent but less than 70 percent. percent of total revenue.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(2)(A)Approval of the request at 85 percent, unless there is a reasonable basis to recommend otherwise, if both of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent. percent of total public revenue.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 70 percent but less than 80 percent. percent of total revenue.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying a percentage that is greater than 70 percent or if the recommended percentage is lower than the requested percentage, the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(3)(A)Approval of the request at 100 percent, unless there is a reasonable basis to recommend less, if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent. percent of total public revenue.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 80 percent. percent of total revenue.
(iii)The ratio of average daily attendance for independent study pupils to full-time certificated employees responsible for independent study does not exceed a pupil-teacher ratio of 25:1 or the equivalent ratio of pupils to full-time certificated employees for all other educational programs operated by the largest unified school district, as measured by average daily attendance, in the county or counties in which the charter school operates. the ratio specified in Section 51745.6.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(4)(A)Due to the nonclassroom-based instruction not being substantially dedicated to the instructional benefit of the pupils, a denial of the request if one or both of the following criteria are met, unless there is a reasonable basis to recommend otherwise:
(i)The percentage calculated for certificated employee salaries and benefits is less than 35 percent. percent of total public revenue.
(ii)The percentage calculated for total expenditures on instruction and related services is less than 60 percent. percent of total revenue.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying the denial and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(d)Commencing with the 202728 fiscal year, all of the following shall apply:
(1)An approved determination of funding for a new charter school in its first year of operation shall be submitted by December 1 and shall be for two fiscal years. Within 90 days after the end of its first fiscal year of operation, a charter school shall submit unaudited actual expense reports and a funding determination form based on the charter schools actual second-year budget. If the Advisory Commission on Charter Schools determines that the actual expenditures of the charter school or the second-year funding determination form do not support the funding determination for the second year, the Advisory Commission on Charter Schools shall recommend that the state board revise the funding determination. The Advisory Commission on Charter Schools and the state board shall give charter schools that are in their first year of operation serious consideration of full funding.
(2)Charter schools that are part of a network of nonclassroom-based charter schools shall apply for a funding determination at within the same time fiscal year in a year determined by the department and shall be considered by the state board shall consider the funding determination for each of the schools within a network at the same hearing. The department shall determine the year based on the furthest funding determination date within the network, but no later than five years after the network is identified. The funding determination for a charter school that is part of a network of nonclassroom-based charter schools shall not exceed three five years. If a charter school already has a multiyear funding determination prior to being identified as part of a network, that determination shall be deemed invalid and the network shall submit documentation for a new funding determination. During the review of a funding determination for a charter school that is part of a network of nonclassroom-based charter schools that do not use the audit process pursuant to subparagraph (B) of paragraph (3) of subdivision (a) of Section 41020.4, the department shall additionally review and compare the annual uniform electronic data template with unique teacher identifier information, full-time equivalent status, and salary and benefit information across the network of charter schools in order to determine whether any of the components described in paragraph (2) of subdivision (a) of Section 41020.4 are inappropriately double counted in multiple schools across the network that adversely impact any of the components described in paragraph (2) of subdivision (a) of Section 41020.4. By January 1, 2027, the department shall develop an electronic template document to collect only the unique teacher identifier, full-time equivalency status, and salary and benefit amounts.
(3)(A)Nonclassroom-based charter schools shall submit the financial documentation required for a funding determination to the department on an annual basis in the years between funding determinations, and the department shall review the documentation, consistent with all of the following:(i)Documentation for the pupil-to-teacher ratio shall include, for each certificated employee, their Commission on Teacher Credentialing-provided Statewide Educator Identifier (SEID) as reported in the California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and the calculation of the pupil-to-teacher ratio.(ii)Documentation for the certificated staff salaries and benefits shall include, for each employee, their Commission on Teacher Credentialing-provided Statewide Educator Identifier (SEID) as reported in the California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, salary and benefit amounts, percent of time spent on providing direct instruction and instructional support to pupils, indicate whether the certificated employee provides direct instruction or instructional support to pupils at two or more nonclassroom-based charter schools at the direction of their employer, and the calculation of the percent of revenue expended on certificated staff salaries and benefits.(iii)Documentation for instruction and related services shall include financial records and other supporting records necessary to determine the qualifying expenditures, consistent with the definition of instruction and related services, and the calculation of the percent of revenue expended on instruction and related services.(B)(3)The Advisory Commission on Charter Schools shall recommend to the state board funding determinations for each nonclassroom-based charter school that is part of a network, as defined in Section 47634.3, that do not use the audit process pursuant to subparagraph (B) of paragraph (3) of subdivision (a) of Section 41020.4 based on a review of aggregate expenditure and revenue information from all years since the prior funding determination was made for that school and shall recommend reducing modifying the funding accordingly.
(4)Any multiyear funding determination approved by the state board may be modified by the state board, including the terms of the multiyear approval and the funding authorized. The state board may terminate a determination of funding if updated or additional information requested by the department or the advisory committee pursuant to this section is not made available by a charter school within a reasonable amount of time or if credible information from any source supports termination. termination or reduction. If credible information from a source supports termination, termination or reduction, the charter school shall have a reasonable amount of time prior to the termination or reduction of funding to provide additional information to support the charter schools determination of funding.
(5)If a charter school is maintaining an unassigned fund balance for economic uncertainties that is 5 percent or less of the charter schools annual expenditures, the Superintendent shall notify the chartering authority of the charter school to investigate whether the charter school has sufficient reserves to address economic uncertainties.(6)(5)A charter school that is eligible for a funding determination based on the criteria pursuant to subdivision (c) may be eligible for an increase in the funding determination only if the state board finds a reasonable basis to recommend an increase in accordance with the mitigating circumstances described in paragraph (7). A charter school granted an increase in the funding determination based on mitigating circumstances shall receive a funding determination not to exceed two years.
(7)(A) A(6)A reasonable basis for the Advisory Commission on Charter Schools to make make, or the state board to approve, a recommendation other higher than one that results from the criteria described in subdivision (c) includes, but is not limited to, includes documented data regarding the individual circumstances of the charter school related to the following: one-time, unique, or exceptional expenses for facilities, the acquisition of one or more schoolbuses, the acquisition and installation of computer hardware not related to the instructional program, special education charges levied on the charter school by a local educational agency, or restricted private grants of funds awarded to the charter school that cannot be expended for teacher salaries. The Advisory Commission on Charter Schools may give charter schools that are in their first year of operation serious consideration of full funding. the charter school.
(B)Documentation for one-time, unique, or exceptional expenses for facilities shall be evidenced by at least one of the following: an approved material revision of the schools charter by their chartering authority to add one or more locations; an approved facility lease, facility purchase agreement, or contracts for architectural services, building construction services, or the like; evidence of plans submitted to a local government for permitting approval; a published request for proposals; or an item approved by the governing body of the charter school declaring the schools intent to lease, acquire, or renovate a facility that includes a detailed project budget and project timeline.(C)A charter school that applies for a funding determination based on mitigating circumstances related to documented one-time, unique, or exceptional expenses for facilities in two or more consecutive funding periods shall be required to demonstrate substantial progress towards the leasing, purchase, or renovation of that facility in order to receive a greater funding determination level than which they would normally qualify pursuant to the criteria established in subdivision (c).(D)The Advisory Commission on Charter Schools shall consider a charter schools amount of budget reserves, categories of reserves, and purpose of reserves in determining whether a reasonable basis to make a recommendation other than one that results from the criteria described in subdivision (c) is appropriate.(7)The Advisory Commission on Charter Schools shall give charter schools with less than a total of 100 units of prior year second period average daily attendance or that are in their first year of operation serious consideration of full funding.
(e)Commencing with the 202728 fiscal year, charter schools that submit a funding determination request shall adhere to all of the following:
(1)Exclude unspent one-time local, state, or federal revenues that are permitted to be spent over multiple fiscal years from the calculations of the percentage of school total revenues spent on instruction and related instruction-related services and total public revenue for certificated staff salaries and benefits if the charter school recognizes these revenues and expenditures in the year the funds are actually spent.
(2)May include in the total expenditures for instruction and related services any funds spent on resource centers centers, meeting spaces, satellite facilities, or site-based instructional facilities operated or leased by the charter school used primarily for purposes of in-person instruction and pupil support services, including, but not limited to, tutoring, counseling, special education services, libraries, testing, and visual and performing arts facilities. A charter school shall provide the department with supporting documentation related to these costs.
(3)Report the amount and classification of its reserves on funding determination forms consistent with state accounting categories of assigned, unassigned, restricted, committed, and nonspendable.
(4)Exclude from the revenue the portion of a net increase to the reserve for economic uncertainties that is sufficient to increase the fund balance to 10 percent of the charter schools annual expenditures if the charter school has a fund balance that represents less than 10 percent of their annual expenditures. This excluded amount shall not exceed 5 percent of a charter schools total revenue in any one year.(4)Exclude from the total revenue and total public revenue the portion of a net increase to the governing body designated reserve for economic uncertainties that is a component part of unrestricted net assets or unassigned fund balance excluding any transfers between the components of the fund balance, where applicable, that is sufficient to increase the reserve for economic uncertainties to 10 percent of the charter schools annual expenditures if the charter school has a governing body designated reserve for economic uncertainties that is a component part of unrestricted net assets or unassigned fund balance excluding any transfers between the components of the fund balance, where applicable, that represents less than 10 percent of their annual expenditures. This excluded amount shall not exceed 5 percent of a charter schools total revenue in any one year. Nothing in this paragraph is intended to be a cap on reserves for economic uncertainties.
(5)If applicable, explain on the funding determination form the purposes for which the governing body designated reserve for economic uncertainties that is a component part of unrestricted net assets or unassigned fund balances balances, where applicable, are being maintained at a level that is 10 percent or more of the charter schools annual expenditures.
(6)Exclude from the total revenue, or total public revenue, proceeds from loans for facilities and state apportionment deferrals.
(f)This section does not authorize the state board to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) of Section 47612.5.
(g)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction.
(h)Notwithstanding any other provision of law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
(i)For purposes of submitting a determination of funding request, the department shall issue a form or set of forms to collect the information necessary to implement this section. The form or forms shall be developed by the department in consultation with the Advisory Commission on Charter Schools. The form or forms shall require the approval of the state board and comply with applicable provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(j)A charter school may submit a request for funding determination up to one year prior to the fiscal year in which the request will initially be effective. The funding determination for a charter school that is part of a network of nonclassroom-based charter schools shall not exceed five years, except as allowed in accordance with subdivision (n) or as required in accordance with paragraph (6) of subdivision (d).
(k)Not more than 120 days following the receipt of a complete determination of funding request, the department shall present the request and the recommendation of the Advisory Commission on Charter Schools to the state board.
(l)Prior to a recommendation that a determination of funding request be denied or approved at a percentage lower than that requested by the Advisory Commission on Charter Schools being forwarded to the state board, the affected charter school shall be given 30 calendar days to amend its determination of funding request or to provide additional information in support of the request, or both. Based upon consideration of the amended request or any additional information that may be provided, the Advisory Commission on Charter Schools may modify its recommendation to the state board.
(m)If, during the effective period of a determination of funding, a charter school wishes to seek a higher or lower determination of funding, it shall do so by the filing of a new determination of funding request. During the effective period of a charter schools determination of funding, no more than one additional determination of funding request, which would replace the determination of funding then in effect, may be submitted by the charter school in the same fiscal year.
(n)(1)In any year that the annual charter school financial and compliance audit confirms that a nonclassroom-based charter school that is not part of a network, or a nonclassroom-based charter school that is part of a network and audited pursuant to subparagraph (B) of paragraph (3) of subdivision (a) of Section 41020.4, has met the criteria and thresholds established to receive 100 percent funding in paragraph (3) of subdivision (c), and the charter school is currently funded at 100 percent pursuant to the most recent funding determination, the school shall not be required to submit a funding determination form as otherwise required in this section and the school shall receive 100 percent funding for the following year.
(2)In any year that the annual charter school financial and compliance audit confirms that a charter school has met the criteria and thresholds established to receive 85 percent funding pursuant to paragraph (2) of subdivision (c), and the charter school, is currently funded at 85 percent, the school shall not be required to submit a funding determination form as otherwise required in this section and the school shall receive 85 percent funding for the following year.
(3)In any year that the annual charter school financial and compliance audit confirms that a charter school has met the criteria and thresholds established to receive 70 percent funding pursuant to paragraph (1) of subdivision (c), and the charter school, is currently funded at 70 percent, the school shall not be required to submit a funding determination form as otherwise required in this section and the school shall receive 70 percent funding for the following year.
(4)Notwithstanding paragraphs (1), (2), and (3), if the state board finds that the audit makes a finding that the charter school is not meeting the thresholds for the funding determination approved by the state board, or other information received by the department, or that the program offered by the charter school is not conducted for the instructional benefit of the pupil and substantially dedicated to that function, the state board shall notify the school that it is required to submit a funding determination form in accordance with this section. If the state board finds that the audit makes a finding that any charter school in a network of nonclassroom-based charter schools is not meeting the thresholds for the funding determination approved by the state board the state board shall notify all the schools in the network that they are required to submit a funding determination form in accordance with this section. A school shall submit a funding determination in accordance with this section within 120 days of receiving a notice under this paragraph.
(o)Any determination of funding request approved by the state board shall be effective commencing in the fiscal year following the state boards determination.
(i)(p)For purposes of this section, the following definitions apply:
(1)Certificated staff salaries and benefits means the total expenditures for salaries and benefits for all employees who possess a valid teaching certificate, permit, or other document equivalent to that which a teacher in other public schools would be required to hold issued by the Commission on Teacher Credentialing and who work in the charter school in a position required to provide direct instruction or direct instructional support to pupils.
(2)Employee includes all of the following:
(A)Special education teachers who possess a valid teaching certificate, permit, or other document equivalent to what special education teachers in noncharter public schools would be required to hold issued by the Commission on Teacher Credentialing, and who provide direct instruction or direct instructional support to pupils of the charter school pursuant to a contract with a public or private entity.
(B)Individuals who possess a valid certificate, permit, or other document equivalent to what individuals would be required to possess in a noncharter public school, issued by the Commission on Teacher Credentialing, and who are employed by a local educational agency, provided all of the following conditions are met:
(i)The local educational agency is the employer of all the charter schools staff.
(ii)The governing board or body of the local educational agency is the chartering authority for the charter school.
(iii)The local educational agencys employees are assigned exclusively to work at the charter school providing direct instruction or direct instructional support to pupils or, to the extent that the local educational agencys employees are assigned to work at the charter school on a part-time basis, the charter school pays for the services rendered by the employee providing direct instruction or direct instructional support to pupils on a documented, fee-for-service basis and not on the basis of a fixed annual amount, fixed percentage of average daily attendance revenue, or other basis that is not related to documented services actually rendered to the charter school.
(C)Certificated employees of a local educational agency shall not be considered employees of a charter school for purposes of this paragraph unless the charter school pays for the services rendered by the local educational agencys employees on a documented, fee-for-service basis.
(D)Qualified persons that provide direct instruction or direct instructional support, that are hired directly by the charter school through an employment services contract based on a documented, fee-for-service basis.
(3)Instruction and related services means all of the following:
(A)Activities dealing with the interaction between teaching staff and pupils, without regard to the instructional location or medium.
(B)Services that provide administrative, technical, and logistical support to facilitate and enhance instruction.
(C)Services in direct support of pupils.
(D)School-sponsored extracurricular or cocurricular activities designed to provide motivation and enjoyment and improvement of skills.
(E)Instructional materials, supplies, and equipment.
(F)Instructional facilities as described in paragraph (2) of subdivision (e).
(1)(4)Network of nonclassroom-based charter schools has the same meaning as defined in subdivision (b) of Section 47634.3.
(2)(5)Nonclassroom-based instruction has the same meaning as defined in paragraph (2) of subdivision (e) of Section 47612.5.
(3)(6)Pupil-teacher ratio has the same meaning as described in Section 51745.6.
(4)Schoolsite has the same meaning as described in paragraph (3) of subdivision (e) of Section 47612.5.(7)Total public revenue means total federal and state funds, local in-lieu property taxes, except as excluded in (e), and Public Charter School Grant Program start-up, implementation, and dissemination grant funds.
(8)Total revenue means total federal, state, and local funds, local in-lieu property taxes, and other income, except as excluded in (e).
SEC. 36.SEC. 39.Section 47634.3 is added to the Education Code, to read:47634.3.(a)Beginning with the 202728 school year, the department shall annually develop a list that identifies networks of nonclassroom-based charter schools, as described in this section, and the schools that make up those networks, based on data from the prior school year.
(b)For purposes of this section, a network of nonclassroom-based charter schools means two or more nonclassroom-based charter schools, as defined pursuant to paragraph (2) of subdivision (e) of Section 47612.5, that meet one or more of the following:
(1)Have a shared governance or management structure, including having supervisors and managers who typically function on a multischool level and oversee, evaluate, control teaching assignments, control class rosters, or discipline teachers or who set wages, hours, benefits, job duties, or other terms and conditions of employment for employees across multiple schools.
(2)Are under the control of the same corporate or legal entity, or are controlled by legal entities wherein one or more of the corporate directors are appointed or elected by another common entity.
(3)Have two or more nonclassroom-based charter schools that are have been determined by the Public Employment Relations Board to constitute either a single employer or joint employer. employer as of July 1, 2025.
(4)Have an entity or related party that is not the governing body of the charter school control or direct the transfer of funds or liabilities between two or more charter schools.
SEC. 40.Article 7 (commencing with Section 47670) is added to Chapter 6 of Part 26.8 of Division 4 of Title 2 of the Education Code, to read:7.Charter Grant Programs47670.(a)(1)The Chartering Authority Mentor Grant Program is hereby established.
(2)The Superintendent shall administer the program to chartering authority mentor grantees to provide technical assistance to eligible chartering authorities.
(3)The Superintendent shall establish criteria and a process to select and contract with three county offices of education or school districts to be chartering authority mentors. The selected county offices of education or school districts shall meet all of the following qualifications:
(A)Evidence of organizational capacity, including years of authorizing experience, and all of the following:
(i)Evidence in one or more areas of authorizing activities, including, but not limited to, new petition review, renewal, site visits, material revisions, teacher misassignment monitoring, notices of violation, and budget review.
(ii)Experience with a diverse authorizing portfolio across numerous metrics, including oversight of diverse charters such as both classroom-based and nonclassroom-based charter schools, schools with varying enrollments, charter-only special education local plan area membership, and charter schools that are not operated by, and that are operated by, an entity managing a charter school, schools using and not using district facilities, schools working in partnership with a Workforce Innovation and Opportunity Act program, alternative accountability schools, and schools that provide career technical education programs.
(iii)Evidence of providing high-quality technical assistance to their charter schools and other chartering authorities, including a clear description of at least three years of experience with delivering professional development to chartering authorities and charter schools, including the frequency, format, topics, target audience, and number of participants.
(B)Evidence of providing technical assistance with demonstrated expertise and experience in both of the following:
(i)Technical assistance for charter Schools and chartering authorities demonstrated by documentation of a clear description of the county office of education or school district experience with delivering free technical assistance to charter schools and chartering authorities. The description shall include examples of the free technical assistance provided by the county office of education or school district. Examples shall include the frequency, format, topics, target audience, and number of participants of the free technical assistance. Examples shall be supported by sample documents, such as annual schedules and presentation agendas or samples, including both of the following:
(I)Free technical assistance offered by the county office or school district employees to authorized charter schools regarding state and federal statutory and regulatory requirements, oversight practices and expectations.
(II)Free technical assistance by county office of education or school district employees to other chartering authorities regarding compliance with the Education Code and best practices in charter authorizing and oversight. Topics may include oversight of charter schools providing high school or career technical education programs, and schools serving English learners, pupils with disabilities, and socioeconomically disadvantaged pupils.
(ii)Technical assistance by county office of education or school district staff provided at conferences or trainings held by professional associations.
(C)Evidence of personnel resources including, but not limited to, one full-time equivalent administrator, at least three full-time equivalent oversight employees, and one full-time equivalent fiscal oversight employee.
(b)(1)Eligible chartering authorities shall be chartering authorities who have had two consecutive years of two or more findings related to charter oversight. Eligible chartering authorities shall be required to receive two years of technical assistance provided by one or more chartering authority mentors awarded a grant pursuant to subdivision (a), in accordance with this section.
(2)The county superintendent for a school district chartering authority, or the Superintendent for a county office of education chartering authority shall annually notify the chartering authorities under its jurisdiction that have met the eligibility conditions for assistance.
(3)An eligible chartering authority who has met the conditions for assistance shall not be required to pay for the assistance.
(c)An eligible chartering authority shall not authorize new nonclassroom-based charter schools during the two years of required technical assistance,
47671.(a)The Charter School Authorizer Grant Program is hereby established within the department.
(b)Pursuant to the Charter School Authorizer Grant Program, the department shall provide grants to chartering authorities with charter schools in operation as of January 1, 2026, for purposes of assisting with costs associated with the increased oversight responsibilities required pursuant to subdivisions (c) and (d) of Section 47604.32, as amended by Assembly Bill 84 of the 202526 Regular Session.
(c)Of the funds made available for purposes of this program, one-half shall be used for the program described in subdivision (d) and one-half for the program described in subdivision (e).
(d)(1)Within the program established by subdivision (a), the Charter School Authorizer Formula Grant Program shall be established for purposes of providing grants to chartering authorities with charter schools in operation as of January 1, 2025. The grants shall be calculated on a per-pupil basis of the charter school pupils approved by the chartering authority, as determined by the 202526 second principal apportionment average daily attendance of charter schools.
(2)Grants provided to chartering authorities pursuant to paragraph (1) that are not expended as of June 30, 2029, shall be returned to the department. The department shall apply the returned unexpended funds of the Charter School Authorizer Formula Grant Program to the Charter School Authorizer Excess Costs Grant Program described in subdivision (e), and the department shall distribute those funds on a prorated basis to chartering authorities that did not have their full requests funded by February 1, 2029.
(3)Grants provided to chartering authorities pursuant to paragraph (1) shall only be used for expenditures related to the increased oversight responsibilities required of chartering authorities established in subdivisions (c) and (d) of Section 47604.32, as amended by Assembly Bill 84 of the 202526 Regular Session.
(e)(1)Within the program established by subdivision (a), the Charter School Authorizer Excess Costs Grant Program is established to provide grants to chartering authorities that incur excess costs due to the increased oversight responsibilities required of the chartering authority established in subdivisions (c) and (d) of Section 47604.32, as amended by Assembly Bill 84 of the 202526 Regular Session, that incur costs beyond the amount of the formula grant provided pursuant to subdivision (d), and costs beyond the 1 percent oversight fee pursuant to Section 47613.
(2)The department shall notify chartering authorities of the Charter School Authorizer Excess Costs Grant Program by October 1, 2028. In order for eligible chartering authorities to participate in the grant program, the chartering authority shall notify the department by November 30, 2028, of its intention to seek a grant for this purpose. This notification shall be in a format prescribed by the Superintendent, and shall include an itemized list of excess costs incurred between January 1, 2026, and November 30, 2028. For a chartering authority that is a school district, the notification shall be certified by the county superintendent of schools. For a chartering authority that is a county office of education, the notification shall be certified by the department. The department shall apportion Charter School Authorizer Excess Costs Grant Program grants to eligible chartering authorities no later than February 1, 2029. All grant funds which are not reserved by a chartering authority by June 30, 2031, shall be reverted to the Proposition 98 Reversion Account within the General Fund, upon notification by the Superintendent to the Controller's office. Any funds returned from the Charter School Authorizer Formula Grant Program shall be used to increase reimbursement of Charter School Authorizer Excess Costs Grant Program.
(3)If the total excess costs from all applicants exceeds the amount available for the grants under this subdivision, the department shall prorate the grants to chartering authorities.
47672.(a)The Charter School Standardized Account Code Structure Grant Program is hereby established within the department.
(b)The department shall provide grants of up to fifty thousand dollars ($50,000) per charter school that has not fully implemented, as determined by the charter schools filing of the unaudited financial report for the prior year, the Standardized Account Code Structure as of June 30, 2025. A new charter school that commences operation after July 1, 2025, and before June 30, 2031, is eligible to receive a grant pursuant to this section.
(c)The department shall notify charter schools of the Charter School Standardized Account Code Structure Grant Program by October 1, 2026. In order for a charter school to participate in the grant program, the charter school shall notify the department by November 1, 2026, of its intent to implement the Standardized Account Code Structure and seek an apportionment for this purpose. This notification shall be in a format prescribed by the Superintendent. All grant funds which are not reserved by a charter school by June 30, 2031, shall be reverted to the Proposition 98 Reversion Account within the General Fund, upon notification by the Superintendent to the Controllers office. The department shall apportion Charter School Account Code Structure Grant Program to charter schools no later than January 1, 2027, except for new charter schools pursuant to subdivision (b).
(d)(1)Except as provided in paragraph (3), each charter school that receives a Charter School Standardized Account Code Structure Grant, is required to both fully implement the Standardized Account Code Structure pursuant to Section 47604.35 and expend these funds by no later than October 31, 2031, or repay those funds to the state, together with interest at a rate based on the most current investment rate of the Pooled Money Investment Account as of the date the funds are apportioned by the department. Interest shall accrue as of the date the grant funds are as apportioned by the department.
(2)The Superintendent shall withhold from the apportionments to be made to the charter school from the State School Fund an amount equal to the amount owed pursuant to paragraph (1), and those funds shall be immediately transferred by the Controller to the Proposition 98 Reversion Account within the General Fund.
(3)Only under extraordinary circumstances and on a case-by-case basis, the Superintendent may grant extensions of up to 12 additional months upon approval of the Department of Finance to the October 31, 2031, expenditure deadline for the purpose of determining whether repayment to the state is required pursuant to paragraph (1).
(e)For purposes of this section, fully implement for a charter school means submitting the following reports in the same manner as school districts, as applicable, based on the Standardized Account Code Structure:
(1)The adopted budget for the charter school pursuant to Section 47604.33.
(2)The financial and budgetary status reports for first and second interim pursuant to Section 47604.33.
(3)The annual statement of all receipts and expenditures pursuant to Section 47604.33.
(f)A chartering authority shall monitor compliance and notify the department if a charter school that receives a grant pursuant to this section does not comply with the requirement to submit the financial reports required in Section 47604.33 using the Standardized Account Code Structure Web financial reporting system pursuant to the timelines established in this section.
(g)If the department receives notification from a chartering authority of a charter school pursuant to subdivision (f), the department may require the charter school to return the funds to the state pursuant to paragraph (1) of subdivision (d).
(h)Acceptance by the charter school of the funds made available pursuant to this section shall constitute agreement by the charter school to the conditions set forth in this section.
SEC. 37.SEC. 41.Section 51745.6 of the Education Code is amended to read:51745.6.(a)(1)Except as provided in paragraph (2), the ratio of average daily attendance for independent study pupils 18 years of age or less for a school district or county office of education, and for independent study pupils regardless of age for a charter school, to full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall comply with one of the following:
(A)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school.
(B)It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(C)It shall not exceed a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or a fixed ratio of less than 25 pupils per certificated employee.
(2)Notwithstanding paragraph (1), a new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575 for county offices of education and Section 42238.05 for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 38.SEC. 42.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 39.SEC. 43.Section 51747.5 of the Education Code is amended to read:51747.5.(a)The independent study by each pupil shall be coordinated, evaluated, and, notwithstanding subdivision (a) of Section 46300, shall be under the general supervision of an employee of the local educational agency who possesses a valid certification document pursuant to Section 44865 or an emergency credential pursuant to Section 44300, registered as required by law.
(b)(1)A local educational agency may claim apportionment credit for independent study only to the extent of the time value of pupil work products, as personally judged in each instance by a certificated teacher employed by the local educational agency, or the combined time value of pupil work product and pupil participation in synchronous instruction pursuant to paragraph (2). It is the intent of the Legislature that teachers be given access to digital assignment tracking systems to reduce workload associated with evaluating and accounting for pupil work and synchronous instruction participation.
(2)For purposes of computing average daily attendance for each pupil enrolled in independent study pursuant to Section 51747, the following computations shall apply:
(A)(i)For each schoolday, add the combined equivalent daily time value of pupil work products, as personally judged by a certificated employee of the local educational agency.
(ii)For purposes of this section, pupil work products may include the daily time value spent by a pupil engaged in asynchronous instruction, including work completed on an online or computer-based instructional activity, regardless of whether pupil work products are produced, if the computer program documents pupil participation. The local educational agency shall maintain documentation of hours or fraction of an hour of both pupil work products and the time that the pupil engaged in asynchronous instruction.
(iii)(I)Except as provided in subclause (II), a local educational agency shall maintain one completed pupil work product in each of the subjects of English language arts, mathematics, history-social science, and science for a pupil enrolled in independent study for each of three attendance periods as follows:
(ia)The beginning of the school year through the first attendance period.
(ib)The day following the end of the first attendance period to the end of the schools second attendance period.
(ic)The day following the end of the schools second attendance period to the end of the school year.
(II)Notwithstanding subclause (I), if a pupil is not enrolled in one or more of the subjects identified in subclause (I) during an attendance period, the local educational agency shall maintain four completed pupil work products per attendance period that are representative of the pupils course schedule.
(B)(i)For each schoolday, add the combined daily instructional minutes a pupil participated in synchronous instruction, as defined by subdivision (d) of Section 51745.5 and offered pursuant to subdivision (e) of Section 51747, for which evidence of pupil participation is furnished and maintained. Evidence of pupil participation may include, but is not limited to, pupil work produced or performed, or documentation that the pupil participated in an instructional period either visually or verbally, as verified by a certificated employee and maintained by the local educational agency for each hour or fraction thereof of the synchronous instructional offering.
(ii)Pursuant to paragraph (1), a local educational agency may claim apportionment credit in this paragraph insofar as a pupils participation in a synchronous instructional offering augments the time value of pupil work product.
(C)For each schoolday, add the sum of subparagraphs (A) and (B). If the sum of subparagraphs (A) and (B) meets the applicable minimum schoolday requirements for each schoolday, and all other requirements in this section have been met, each schoolday shall be credited as up to one schoolday of attendance.
(3)The average daily attendance computed pursuant to this subdivision shall not result in more than one unit of average daily attendance per pupil.
(4)Notwithstanding any other law, average daily attendance computed for pupils enrolled in independent study shall not be credited with average daily attendance other than what is specified in this section.
(c)A local educational agency shall document each pupils participation in live interaction and synchronous instruction pursuant to Section 51747 on each schoolday, as applicable, in whole or in part, for which live interaction or synchronous instruction is provided as part of the independent study program. A pupil who does not participate in scheduled live interaction or synchronous instruction shall be documented as nonparticipatory for that schoolday for purposes of pupil participation reporting and tiered reengagement pursuant to Section 51747.
(d)A local educational agency shall maintain written or computer-based evidence of pupil engagement that includes, but is not limited to, a grade book or summary document that, for each class, lists all assignments, assessments, and associated grades.
(e)For purposes of this section, a local educational agency shall not be required to sign and date pupil work products when assessing the time value of pupil work products for apportionment purposes.
(f)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate compliance reviews for subdivisions (a) to (d), inclusive, unless compliance verification for those subdivisions is already included in the audit guide. Findings of noncompliance shall result in the loss of apportionment equal to the average daily attendance impacted by the noncompliance.
(g)The provisions of this section are not subject to waiver by the state board, by the Superintendent, or under any provision of Part 26.8 (commencing with Section 47600).
SEC. 40.SEC. 44.Section 51748 of the Education Code is amended to read:51748.School districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by a pupil who is not otherwise identified in the written records of the school district, charter school, or county board of education by grade level, program placement, and the school in which the pupil is enrolled.
SEC. 41.SEC. 45.Article 11.5 (commencing with Section 51827) is added to Chapter 5 of Part 28 of Division 4 of Title 2 of the Education Code, to read:11.5.Local Educational Agency Contracting51827.(a)On or before July 1, 2027, the governing board or body of a local educational agency shall adopt a policy for the local educational agency to comply with in order to evaluate and approve contractors. The policy shall include all of the following provisions:
(1)A local educational agency shall not expend public funds for a contract unless the materials, programs, and activities are nonsectarian and comply with nondiscrimination provisions of state and federal law.
(2)A local educational agency shall not expend public funds for a contract that pays for tuition or fees for a pupil at a private school that has filed an affidavit pursuant to Section 33190, except if required pursuant to a pupils individualized education program.
(3)(A)Financial payments or gifts shall not be offered by a local educational agency to a pupil, prospective pupil, or a pupils parent, guardian, or relative as an incentive for enrollment, referral, or retention.
(B)Financial incentives shall not be offered to employees for meeting pupil attendance metrics or goals. This subparagraph does not prohibit a local educational agency from offering financial incentives to employees for activities to encourage pupil engagement or reengagement of chronically absent pupils, such as home visits.
(4)For a nonclassroom-based charter school, contracts shall itemize costs attributed to credentialed staff, administrative staff, and instruction and related services with sufficient detail to determine a qualifying expense for purposes of a funding determination.
(5)A local educational agency shall ensure contracts reflect a reasonable market value.
(6)A local educational agency shall not purchase or contract for season passes or membership to amusement or theme parks, zoos, or family entertainment activities, except that a local educational agency may offer a one-time admission that is aligned with teacher assignments, or graduation activities funded through parent or student organizations. Family entertainment activities include, but are not limited to, laser tag, arcades, miniature golf, and trampoline parks.
(7)A local educational agency shall only contract with an entity that has a business license or business certificate, where applicable, and has appropriate insurance for the service being offered. Government agencies are not required to have a business license.
(8)A local educational agency shall not contract with a pupil or a pupils parent, guardian, or relative for services provided exclusively to that pupil, except for any of the following persons who are compensated by the local educational agency to provide school-related transportation for a pupil:
(A)A parent or legal guardian.
(B)A relative, as defined in paragraph (2) of subdivision (c) of Section 361.3 of the Welfare and Institutions Code, or a nonrelative extended family member, as defined in Section 362.7 of the Welfare and Institutions Code.
(C)A court-appointed educational rights holder.
(D)A court-appointed special advocate.
(9)A local educational agency shall not reimburse parents or guardians for any activities or services. This paragraph does not prohibit a local educational agency from reimbursing parents or guardians for activities or services for pupils with disabilities pursuant to an individualized education program and required by a legal settlement or agreement.
(10)A contractor who interacts with pupils outside the immediate supervision and control of a school employee shall have policies and procedures related to pupil and site safety, including in virtual settings, emergency response, and accident reporting that are reasonable for the instruction or activity.
(11)Contractor personnel interacting with pupils shall have a valid criminal records summary as described in Section 45125.1.
(12)As part of a contract with a local educational agency, contractors shall provide evidence of qualification and expertise for the activities to be provided, in accordance with policies of the governing board or body of the local educational agency.
(13)As part of a contract with a local educational agency, contractors shall not charge fees to pupils or the pupils parent or legal guardian.
(b)Auditing of the approval of, and compliance with, policies enacted in accordance with subdivision (a) shall be included in the audit guide, Standards and Procedures for Audits of California K-12 Local Educational Agencies, described in Section 14502.1.
(c)This section does not supersede or invalidate a contract that is in effect on or before July 1, 2027. If a contract is in effect on or before July 1, 2027, the contract shall remain in effect until the expiration of the contract or the parties to the agreement negotiate a successor agreement that will be operative after July 1, 2027, that complies with this section. A local educational agency shall not enter into a contract or make an amendment or other ancillary agreement to an existing contract on or after January 1, 2026, that would be operative after July 1, 2027, unless it would comply with this section.
(d)For purposes of this section, local educational agency means a school district, educational joint powers authority, county office of education, or charter school.
SEC. 42.SEC. 46.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(H)For schools that are identified on the list established in the 202425 fiscal year pursuant to subparagraph (A), and only in the fiscal years in which that list is used, a county superintendent shall complete the textbook and instructional materials review conducted for purposes of this paragraph and subparagraph (A) of paragraph (3) of subdivision (i) by the eighth week of the school year. The county superintendent shall prioritize reviewing, within the first four weeks of the school year where practicable, schools for which the county superintendent has received information from a survey, a complaint filed pursuant to Section 35186, or any other reliable source that the school does not have sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i), or that a facility of the school poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year, except as specified in subparagraph (H) of paragraph (2) of subdivision (c).
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts, educational joint powers authorities, county superintendents of schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the generally accepted government auditing standards promulgated by the United States Government Accountability Office. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation or both regulation, or both, and includes the verification of each of the following: following, if applicable:
(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(C)Teacher misassignments pursuant to Section 44258.9.
(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126.
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14503 of the Education Code is amended to read:14503.(a)Financial and compliance audits shall be performed in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
(b)(1)An independent auditor shall not engage in financial or compliance audits unless, commencing after the first audit, and every three years thereafter, the auditor completes a quality control review conducted by the Controller in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office. The time period between commencement of the second and successive quality control review and completion of a subsequent quality control review shall be calculated from the first day of the month following commencement of the completion of the preceding quality control review.(2)If an independent auditor has not engaged in financial or compliance audits for three or more consecutive years, the Controller shall conduct a quality control review after the auditor completes the first financial or compliance audit.SEC. 6.Section 14504 of the Education Code is amended to read:14504.(a)(1)To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors. The
(2)(A)The Controller shall determine whether audit reports are in conformance with the reporting provisions of subdivision (a) of Section 14503 and shall notify each local educational agency, the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor within six months of the audit report due date or the audit report issue date, whichever is later, regarding each determination. The
(B)The local educational agency, the chartering authority, the county superintendent of schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
(b)Commencing with the 202728 fiscal year, the audit guide developed by the Controller and adopted by the Education Audit Appeals Panel pursuant to Section 14502.1 shall include an appendix with the Controllers desk review checklist that is used to determine whether audit reports are in conformance with the reporting requirements of Section 14503. The Controllers desk review checklist shall focus on elements of reporting that are material, whether qualitative or quantitative, and areas with a higher risk of error or misstatement.
SEC. 7.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a local educational agency was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of the Controllers reviews to the entity that referred the independent auditor to the Controller, the independent auditor, and the local educational agency for which the audit was performed, and shall review the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)In performing quality control reviews, the Controller shall ensure that the selection of audits for each auditor undergoing a quality control review is representative of each type of local educational agency for which an auditor performs audits and shall ensure that reviewers have relevant experience with financial or compliance audits of local educational agencies.(c)(1)The Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for a local educational agency for the prior three fiscal years if any of the following circumstances exists:(A)The school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.(B)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.(C)The responsible county superintendent of schools or the Superintendent has otherwise determined that a lack of going concern exists for the school district, educational joint powers authority, or county superintendent of schools pursuant to Sections 1630 and 42127.6.(2)The Controller shall establish and publish as part of the audit guide a weighted risk-based criteria that considers auditor experience and quality factors in determining which audit engagements shall undergo a quality control review. Criteria shall primarily include, but not be limited to, all of the following:
(A)Audit reports that were found to have material nonconformance to the reporting provisions of Section 14503 through the Controllers review.
(B)Audits conducted by an engagement partner who has not performed audits of local educational agencies in the preceding three years.
(C)Audits that are submitted after the due date established pursuant to subdivision (k) of Section 41020, or an approved extension date, whichever is later.
(2)(3)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct conduct, as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(d)The Controller shall conduct a quality control review after an authorized certified public accountant or public accountant listed in the Certified Public Accountants Directory Service (1) completes its first local educational agency financial statement and compliance audit or (2) completes its first local educational agency financial statement and compliance audit after three or more years of not having completed an audit.(e)The Controller shall conduct a quality control review every three years to ensure that all certified public accountant firms are periodically reviewed.(f)(c)In any matter that is referred to the California Board of Accountancy under subparagraph (A) of paragraph (1) (3) of subdivision (c), (b), the Controller may suspend the independent auditor from performing any local educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local educational agency under paragraph (3) of subdivision (c). (b). The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(g)(d)The county superintendent of schools, the school district, the charter school, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local educational agency to the California Board of Accountancy for action described in paragraph (2) (3) of subdivision (c) (b) if any either of the following circumstances exists: exist:
(1)An audit of a local educational agency was conducted in a manner that may constitute unprofessional conduct conduct, as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
(3)The continuing education and prior experience requirements of Section 41020 are not met.SEC. 8.Section 14505 of the Education Code is amended to read:14505.(a)(1)The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(1)(A)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(2)(B)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to the reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to the reporting provisions of subdivision (a) of Section 14503.
(2)If the Controller has not provided a written certification that the audit report has conformed to the reporting provisions of Section 14503 or a written rejection letter detailing the exceptions noted by the Controllers review with instructions for corrections by the sixth month following the audit issue date, or the audit due date, whichever is later, the governing board or body of the local educational agency may release the amounts withheld in audit fees pursuant to paragraph (1).
(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to the reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(c)If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits that are necessary to carry out the Controllers duties and responsibilities pursuant to this code and the Government Code. This chapter does not authorize a local educational agency, or a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out additional audits. To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid unnecessary duplication of audit efforts. In performing additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the local educational agency for the costs of these additional audits.
SEC. 10.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the Superintendent on or before June 30 of each year in order to apprise the Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the Superintendent. Before issuing the report, the Controller shall allow each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting that local educational agency.
SEC. 11.Section 14508 of the Education Code is amended to read:14508.The Notwithstanding Section 10231.5 of the Government Code, the Controller shall submit a report report, consistent with Section 9795 of the Government Code, to the Legislature on or before June 30 August 31 of each year regarding any recommendations made to the Superintendent pursuant to Section 14507.
SEC. 12.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (o) of Section 41020.
SEC. 13.Section 17604 of the Education Code is amended to read:17604.(a)Wherever in this code the power to contract is invested in the governing board of the school district, the governing body of a charter school, or any member thereof, the power may, by a majority vote of the governing board or body, be delegated to its district superintendent or charter school administrator, or to any persons that the district superintendent or charter school administrator may designate, or if there is no district superintendent or charter school administrator, then to any other officer or employee of the school district or charter school that the governing board or body may designate. The delegation of power may be limited as to time, money, or subject matter or may be a blanket authorization in advance of its exercise, all as the governing board or body may direct. A contract made pursuant to the delegation and authorization shall not be valid or constitute an enforceable obligation against the school district or charter school unless the same shall have been approved or ratified by the governing board or body, the approval or ratification to be evidenced by a motion of the governing board or body duly passed and adopted.(b)In the event of malfeasance in office, the school district or charter school official invested by the governing board or body with the power of contract shall be personally liable to the school district or charter school employing the official for any and all moneys of the school district or charter school paid out as a result of the malfeasance.SEC. 14.SEC. 13.Section 33309.5 is added to the Education Code, to read:33309.5.(a)The Office of the Education Inspector General is hereby established in the department. The Education Inspector General shall be appointed by the Governor, subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the state board. The state board shall not prevent or prohibit the Education Inspector General from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(b)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising audits and investigations relating to the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1. school.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1. school.
(3)Providing a means for keeping the state board and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1, and the necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(c)For purposes of this section, local the following definitions apply:
(1)Entity managing a charter school has the same meaning as defined in subdivision (a) of Section 47604.1.
(2)Local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SEC. 15.SEC. 14.Section 41020 of the Education Code is amended to read:41020.(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)It is the further intent of the Legislature that all charter schools be audited.(b)A local educational agency shall post the local educational agencys annual financial and compliance audits on its internet website.
(b)(c)(1)(A)On or before May 1 of each fiscal year, the governing board of each school district or educational joint powers authority shall either provide for an audit of all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the school district or educational joint powers authority to provide for that auditing.
(B)A contract to perform the audit of a school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. Except as provided in clause (ii) of subparagraph (B), an independent audit shall be separately conducted and reported for each charter school that is assigned a County-District-School code. school.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Notwithstanding subparagraph (A) of paragraph (2), (A), financial data for charter schools that are a component entity of a included in the school district or county office of education audit shall be presented separately in the applicable audit report as if the financial data of the charter school represents a major fund, and not as a separately conducted and reported audit. one of the following manners:
(I)As a major fund, when applicable.
(II)As a Supplementary Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance.
(III)As Supplementary Combining Statements for charter schools that are accounted for in the General Fund or when multiple charter schools are included in the charter school fund.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Superintendent Controller to provide for that auditing.
(c)(d)If the governing board of a school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (b) (c) has not provided for an audit of the books and accounts of the local educational agency by April 1, one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Superintendent Controller shall provide for the audit.
(d)(e)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(e)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.(f)Each audit conducted in accordance with this section shall include all of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency.
(2)An audit of pupil attendance procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 or, for a charter school, Section 47606.5.
(4)Notwithstanding any other law, to the extent the governing body of a charter school engages in activities that are unrelated to the charter school, the financial and compliance audit required by this section shall not apply with regard to those unrelated activities.
(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(h)(1)The cost of an audit provided for by a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Superintendent Controller for a county superintendent of schools shall be paid by the Superintendent Controller and the Superintendent Controller shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(4)The cost of an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of a county superintendent of schools shall be paid from the county school service fund.
(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(4)(A)(i)Commencing with the 202728 fiscal year, and every two years thereafter, in order to be added to, or remain on, the Controllers directory of certified public accountant firms, accountants and public accountants deemed qualified to conduct audits of local educational agencies, audit engagement partners and certified public accountants or public accountants, accountants responsible for local educational agency audits and audit staff that conduct audits who perform audit procedures of local educational agencies shall complete 24 16 hours of continuing education in governmental accounting, auditing, or related subjects specific to local educational agencies and the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting. The continuing education shall include that, at a minimum, covers both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include include, but are not limited to, pupil attendance, independent study, charter schools, if applicable, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education units hours taken as part of the California Board of Accountancy licensure license renewal requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202728 fiscal year, in order to be added to, or remain on the Controllers directory of certified public accountants and public accountants deemed qualified to conduct audits of local educational agencies, audit engagement partners, certified public accountant firms, and certified public accountants or public accountants, and audit staff that conduct audits of accountants responsible for local educational agencies agency audits shall comply with both of the following:
(i)(I)Have certified prior demonstrated experience conducting financial and compliance audits for local educational agencies.
(II)Audit engagement partners, certified public accountant firms, and certified public accountants or public accountants may perform a financial and compliance audit for a local educational agency during their first year of conducting those audits, provided the audit report receives a preissuance review, consistent with applicable professional standards on quality control, performed by an auditor that has demonstrated experience in conducting financial and compliance audits for local educational agencies.
(ii)Have been peer reviewed by maintained compliance with the California Board of Accountancy to ensure that the selection of audits for each auditor undergoing a peer review is representative of each type of local educational agency for which an auditor performs audits and the reviewers have relevant experience with financial or compliance audits of local educational agencies. requirements to keep applicable licenses in active status and good standing.
(C)The continuing education units hours and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)Auditors (A)A local educational agency and an auditor that are is under contract with a the local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(7)Auditors that conduct audits of local educational agencies shall share work papers and draft audit reports upon request by the local educational agency or a successor auditor of the local educational agency.(8)A successor auditor of a local educational agency shall request all work papers and draft audit reports in the event that the previous auditor is terminated or otherwise denied for renewal.(B)(i)Before accepting a new engagement for a local educational agency, auditors shall request the local educational agency to provide authorization for predecessor auditors to respond fully and without limitation to the successor auditors inquiries and request to examine work papers related to subparagraph (C).
(ii)If the local educational agency refuses to authorize predecessor auditors to respond, or limits the response, the auditor shall inquire about the reasons and consider the implications of that refusal or limitation in deciding whether to accept the engagement.
(iii)If the local educational agency provides permission for predecessor auditors to respond fully, the successor auditor shall make the following inquiries of the predecessor auditors:
(I)Their knowledge of information that might bear on the integrity of management of the local educational agency.
(II)Whether there were any disagreements with management of the local educational agency regarding matters of accounting principles, financial reporting, compliance, or audit scope.
(III)Whether there were any communications to management of the local educational agency regarding fraud, illegal acts, noncompliance, or internal control matters.
(IV)The predecessor auditors understanding of the reason for the change of auditors.
(V)Any information relevant to the successor auditors risk assessments for the period being audited.
(C)The successor auditor may request to inspect work papers as needed to gain full context of any risks identified through inquiry or to perform necessary procedures on beginning balances.
(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(k)(1)On or before December 15, January 31, a report of each local educational agency audit for the preceding fiscal year shall be filed with specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the Superintendent, and the Controller.
(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports. reports pursuant to Section 41344.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Upon submission of the final audit report to the governing board of each school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district or educational joint powers authority, the county superintendent of schools shall do all of the following:
(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the school district or educational joint powers authority and request the governing board of the school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction before March April 15.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, on or before May June 15, that the county superintendent of schools staff has reviewed all audits of school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(4)In the audit of a school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county superintendent of schools and the Superintendent and restate the exception in the audit report. After receiving that notification, a finding in an audit report, the Superintendent shall either consult with the school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before March April 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before April May 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Ensure that chartering authorities have certified that the charter schools they authorize have corrected or developed a plan of correction for exceptions identified in the audit report.
(iii)(iv)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)If Notwithstanding subparagraph (A), if the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before April June 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report and shall immediately notify the appropriate chartering authority and the county superintendent of schools of the county in which the charter school is located. report.
(ii)After receiving notification a finding in an audit report pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)If Notwithstanding subparagraph (B), if the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report and shall immediately notify the Superintendent. report.
(ii)After receiving notification an audit report pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report submitted to of a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction before March 15 no later than 60 calendar days after the Superintendents notification if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools or chartering authority certifies as of May June 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools or chartering authority to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to chartering authorities, the county superintendent of schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(s)Audits of regional occupational centers and programs are subject to this section.
(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accordance with the generally accepted government auditing standards promulgated by the United States General Accountability Office.
(v)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 16.SEC. 15.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(2)(A)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(B)If a charter school has an approved audit extension pursuant to subdivision (b), a failure to file an audit on or before the legal deadline shall not be a cause for or contributing justification for charter nonrenewal or revocation. Failure to file an audit with the chartering authority on or before the legal deadline due to the inability of a charter school to contract for an audit due to market conditions of available auditors shall not be a cause for or contributing justification for charter nonrenewal or revocation.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent and the Controller on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(b)(1)(A)(i)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(ii)If a charter school has an approved audit extension pursuant to this subdivision, a failure to file an audit on or before the legal deadline shall not be a cause for or contributing justification for charter nonrenewal or revocation. Failure to file an audit with the chartering authority on or before the legal deadline due to the inability of a charter school to contract for an audit due to market conditions of available auditors shall not be a cause for or contributing justification for charter nonrenewal or revocation.
(B)As applicable pursuant to subdivision (a), the Superintendent Controller may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office, Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)An extension granted pursuant to this subdivision shall be appropriate if the extension adheres to all of the following requirements:
(A)The local educational agency and the auditor have certified that the audit cannot be completed on time due to unforeseen circumstances or complex situations.
(A)(B)An extension shall be the shortest amount of time reasonable given the extenuating circumstances justifying the extension.
(B)(C)Extensions shall be in increments of no longer than 45 30 calendar days.
(C)(D)Extensions shall not exceed a total of 90 calendar days from the due date established pursuant to Section 41020. be granted past March 31.
(3)As applicable pursuant to subdivision (a), the county superintendent of schools, schools or chartering authority, or Superintendent, authority may, after consultation with the governing board or body of a local educational agency, the auditors under contract to the local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the local educational agency. The county superintendent of schools, schools or chartering authority, or Superintendent, authority or the Controller shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(4)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may request the Controllers office to investigate the situation and initiate action as provided in subdivision (c).
(c)(1)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may may, after consultation with the governing board or body of the local educational agency and the auditor under contract with the local educational agency, do any of the following:
(A)Accept the action of the county superintendent of schools, chartering authority, or Superintendent, permitted by subdivision (b).
(B)Conduct the audit and prepare the auditors report, using the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.
(C)Contract with any qualified certified public accountant or public accountant, using the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the local educational agency.
(D)Consistent with the limits described in paragraph (2) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)The Controllers office shall consult with the governing board or body of the local educational agency, the auditors under contract to the local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(d)Notwithstanding any extension granted under subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under subparagraph (B) or (C) of paragraph (1) of subdivision (c).
(e)If an extension has not been requested or granted and the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the local educational agency and the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than 15 calendar days from the due date established under Section 41020.
(f)The Controller shall notify the appropriate policy committees of the Legislature and the Department of Finance if local educational agencies are unable to contract for an audit due to market conditions of available auditors.
(g)By September 30, 2028, and every three years thereafter, the Controller shall, in consultation with the entities listed in Section 14502.1, provide recommendations to the appropriate committees of the Legislature regarding outdated or ineffective audit requirements in statute.
(f)(h)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 17.SEC. 16.Section 41020.3 of the Education Code is amended to read:41020.3.By January March 31 of each year, or 45 days after the issuance of an audit report, whichever is later, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Sections 35145, 47604, and 47604.1. Section 35145 or 47604.1, as applicable.
SEC. 18.SEC. 17.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by grade, month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study. Monthly enrollment shall be reported as the enrollment recorded on the last day of the school month, as that term is described in Section 37201.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(2)(A)Schedule of pupil attendance: schedule of pupil attendance by grade, month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.
(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.
(5)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.
(6)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.
(7)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.
(b)Commencing with the 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling are required to be performed and selected, the auditor shall independently identify the sample and make that selection personally.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local educational agency pursuant to the test of compliance sample table in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable.
(D)For charter schools that are a component entity of a school district or county office of education, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.
(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.
(B)Charter schools that are a component entity of a school district or county office of education shall report charter school financial data separately from the general fund of the school district or county office of education, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county office of education. The auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment and residency: for nonclassroom-based instruction, verify enrollment and residency of pupils.
(B)Using appropriate sampling techniques, verify pupil enrollment and verify that a pupils residence is located within the jurisdiction of the county in which the chartering authority is located or an adjacent county, based on residency documentation provided by the parent or guardian of the pupil at the time of enrollment.
(C)State in a finding any inappropriately reported enrollment or residency identified.
(5)Chartering authority input: require auditors to consult with and interview the chartering authority for input and information, including a focus on fiscal and compliance areas that the charter school excels in or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: determining if a related entity, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.
(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.
(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.
(B)Verify, for a nonclassroom-based charter school, the calculation of the schools certificated staff salaries and benefits using the documentation provided to the department in the funding determination pursuant to clause (ii) of subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2 and report any discrepancies as a finding.
(C)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratio and calculations required pursuant to Section 51745.6 and report any discrepancies as a finding. For charter schools, verify the pupil-to-teacher ratio and calculations using the documentation provided to the department pursuant to clause (i) of subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2.
(8)Payments: select a sample of all payments and verify that those payments are legal and have proper authorization. The sampling shall include, but not be limited to, payments obtained through credit card statements, debit card statements, other electronic payment methods and media, and bank statements.
(9)Nonclassroom-based charter school network: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school employs teachers who are required to provide instruction to pupils enrolled in nonclassroom-based charter schools other than the charter school holding the teachers employment contract.
(B)Whether the charter school has teachers who are required to provide instruction to pupils who attend another nonclassroom-based charter school.
(C)Whether the charter school is in a network of nonclassroom-based charter schools, as defined in Section 47634.3.
(D)If a determination is made pursuant to subparagraph (A), (B), or (C), identify the other nonclassroom-based charter schools within the network of nonclassroom-based charter schools and report these results to the chartering authority of the charter school and the department.
(10)Funding determination thresholds: for nonclassroom-based charter schools, determine all of the following and report any discrepancies:
(A)Whether the charter school submitted a determination of funding request to the state board.
(B)Whether the state board approved the determination of funding request.
(C)Whether the charter school is complying with the thresholds included in the state board approved determination of funding using the documentation provided to the department pursuant to subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2.
(c)Commencing with the 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 19.SEC. 18.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section shall does not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other laws.
SEC. 20.SEC. 19.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other law, the auditor conducting an annual audit pursuant to Section 41020 shall, upon request, provide pertinent financial and compliance information related to the circumstances listed in subdivision (b) to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)The circumstances described in subdivision (a) include all of the following:
(1)The local educational agency has a financial audit finding, an audit finding for a material weakness or significant deficiency in internal controls, or a material noncompliance finding.
(2)The audit of a local educational agency contains an audit opinion other than unmodified.
(3)The audit has included a statement that there is substantial doubt about the local educational agencys ability to continue as a going concern for a reasonable period of time.
(4)A determination has been made that a school district may not be able to meet its obligations of the current or subsequent fiscal year pursuant to Section 42127.6.
(5)There is evidence that the school district is showing fiscal distress under the standards and criteria adopted in Section 33127 pursuant to paragraph (1) of subdivision (a) of Section 42127.6.
(6)A school district has a negative unrestricted fund balance or negative cash balance pursuant to Section 42127.5.
(7)A school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.
(8)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(9)A quality control review by the Controller is triggered pursuant to Section 14504.2.
(b)(c)Information provided by an auditor to the chartering authority, a county superintendent of schools, the Controller, or the Superintendent pursuant to this section shall be submitted simultaneously to the named school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 21.SEC. 20.Section 41341 of the Education Code is amended to read:41341.(a)(1)If, during any fiscal year, the amount apportioned to a school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one unit of average daily attendance, the Superintendent, in accordance with regulations that the Superintendent is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Superintendent pursuant this subdivision shall be added to or allowed from any portion of the State School Fund.
(2)Notwithstanding paragraph (1), excesses may be withheld or deficiencies added to apportionments on account of audit exceptions reported in an audit or review, as described in subdivision (e) of Section 41344, or audit or review conducted by a certified public accountant or public accounting firm designated by a governmental agency that provided the local educational agency the opportunity to provide a written response.
(3)If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one or more units of average daily attendance, the school district, county office of education, or charter school shall report the corrected amount to the Superintendent.
(b)If, during any fiscal year, the amount apportioned to a community college district or to any fund from Section B of the State School Fund differs either positively or negatively from the amount to which the community college district or fund was entitled, by an amount equal to the funding of one full-time equivalent student, the Chancellor of the California Community Colleges, in accordance with regulations that the chancellor is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Chancellor of the California Community Colleges under this subdivision shall be added to or allowed from any portion of the State School Fund.
SEC. 22.SEC. 21.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other law, a local educational agency shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 23.Section 41372 of the Education Code is amended to read:41372.(a)For purposes of this section, the following definitions apply:(1)Salaries of classroom teachers and teacher have the same meanings as defined in Section 41011 provided that the cost of all health and welfare benefits provided to the teachers by the school district or charter school are included within the meaning of salaries of classroom teachers.(2)(A)Current expense of education means the gross total expended (not reduced by estimated income or estimated federal and state apportionments) for the purposes classified in the final budget of a school district or charter school (except one which, during the preceding fiscal year, had less than 101 units of average daily attendance) submitted to and approved by the county superintendent of schools pursuant to Section 42127 or 47604.33, as applicable, for certificated salaries other than certificated salaries for pupil transportation, food services, and community services; classified salaries other than classified salaries for pupil transportation, food services, and community services; employee benefits other than employee benefits for pupil transportation personnel, food services personnel, and community services personnel; books, supplies, and equipment replacement other than for pupil transportation and food services; and community services, contracted services, and other operating expenses other than for pupil transportation, food services, and community services.(B)Current expense of education does not include expenditures classified as sites, buildings, books, and media and new equipment (object of expenditure 6000 of the California School Accounting Manual), the amount expended from categorical aid received from the federal or state government which funds were granted for expenditures in a program not incurring any teacher salary expenditures or requiring disbursement of the funds without regard to the requirements of this section, or expenditures for facility acquisition and construction, and does not include the amount expended pursuant to any lease agreement for plant and equipment or the amount expended from funds received from the federal government pursuant to the federal Economic Opportunity Act of 1964 or any extension of that act of Congress.(b)There shall be expended during each fiscal year for payment of salaries of classroom teachers:(1)By an elementary school district or elementary charter school, 60 percent of the school districts or charter schools current expense of education.(2)By a high school district or high school charter school, 50 percent of the school districts or charter schools current expense of education.(3)By a unified school district or charter school serving pupils in kindergarten and grades 1 to 12, inclusive, 55 percent of the school districts or charter schools current expense of education.(4)By a nonclassroom-based charter school, 40 percent of the charter schools current expense of education.(c)If the county superintendent of schools having jurisdiction over the school district or charter school determines, on the basis of an audit conducted pursuant to Section 41020, that a school district or charter school has not expended the applicable percentage of current expense of education for the payment of salaries of classroom teachers during the preceding fiscal year, the county superintendent of schools shall, in apportionments made to the school district or charter school from the State School Fund after April 15 of the current fiscal year, designate an amount of this apportionment or apportionments equal to the apparent deficiency in school district or charter school expenditures. Any amount designated by the county superintendent of schools shall be deposited in the county treasury to the credit of the school district or charter school, but shall be unavailable for expenditure by the school district or charter school pending the determination to be made by the county superintendent of schools on any application for exemption that may be submitted to the county superintendent of schools. If it appears to the governing board of a school district or the governing body of a charter school that the application of this section during a fiscal year results in serious hardship to the school district or charter school, or in the payment of salaries of classroom teachers in excess of the salaries of classroom teachers paid by other school districts or charter schools of comparable type and functioning under comparable conditions, the governing board or body may apply to the county superintendent of schools in writing not later than September 15 of the succeeding fiscal year for exemption from the requirements of this section for the fiscal year on account of which the application is made. Upon receipt of this application, the county superintendent of schools shall grant the school district or charter school an exemption for any amount that is less than one thousand dollars ($1,000). If the amount is one thousand dollars ($1,000) or greater, the county superintendent of schools may grant an exemption from the requirements for the fiscal year on account of which the application is made. If the exemption is granted by the county superintendent of schools, the designated moneys shall be immediately available for expenditure by the governing board of the school district or the governing body of the charter school. If no application for exemption is made or exemption is denied, the county superintendent of schools shall order the designated amount or amount not exempted to be added to the amounts to be expended for salaries of classroom teachers during the next fiscal year.(d)The county superintendent of schools shall enforce the requirements prescribed by this section, and may adopt necessary rules and regulations to that end.SEC. 24.SEC. 22.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares both of the following:
(A)That continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low.
(B)That local educational agencies, state officials, pupils, and guardians have a vested interest in knowing and understanding the capacity of local educational agencies to fill all available and funded teaching assignments with educators who are fully credentialed for the subjects and pupils they are teaching, and a vested interest in understanding the scope of the teacher shortage across the TK/K12 educational system, including, but not limited to, those instances where vacancies cannot be filled, resulting in the use of substitutes, increases in class size, or cancellation of courses or classes.
(2)To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(3)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(4)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions and identifications apply:
(1)(A)An instance of a teacher shortage means an identification by the commission that a course or class assignment is not any of the following:
(i)Permanently filled as of Census Day.
(ii)Filled by a fully credentialed teacher.
(iii)Filled by a teacher who is appropriately assigned.
(B)A fully credentialed teacher means an individual who has completed a teacher preparation program, as defined in subdivision (e) of Section 44225.7, and who holds a valid preliminary or clear credential issued based upon the completion of that teacher preparation program.
(C)An assignment is permanently filled as of Census Day if the educator serving as a teacher has been contracted as of Census Day to provide instruction for either the entire school year or for a one-semester course for the entire semester.
(D)A teacher is appropriately assigned if the teacher holds a credential, permit, or waiver issued by the commission that contains an authorization to legally teach in the setting, in the subject area, and the pupil population associated with the assignment.
(2)An unfilled position shall be identified in each instance where a local educational agency has attempted to fill or is actively trying to fill an open and funded position, but is unable to do so.
(3)A vacant position shall be identified in each instance where, as of Census Day, a course or class assignment has not been permanently filled by a single-designated certificated employee serving for either the entire school year or for a one-semester course for the entire semester. For purposes of identifying an instance of a teacher shortage pursuant to paragraph (3) of subdivision (h), a vacant position shall be limited to an employee serving as a teacher.
(4)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(5)Local educational agency means a school district, county office of education, charter school, or state special school.
(6)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract. For purposes of this section, in a charter school, misassignment shall apply only to employees in teaching positions.
(7)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(8)System, unless the context requires otherwise, means the California Statewide Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Sections 10600 and 60900 for its functioning.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 11495), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and appropriately assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those appropriately assigned and misassigned, at the schoolsite, local educational agency, county, and state levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)(A)Identify instances of a teacher shortage in each instance where, as of Census Day, a course or class assignment is permanently filled by an employee who is not fully credentialed or who is not appropriately assigned, as identified in clauses (i) to (vii), inclusive, below:
(i)Individuals who are fully credentialed teachers and are serving outside their credential area based on holding a valid commission-issued permit authorizing the subject, setting, or pupil population being taught.
(ii)Individuals who are fully credentialed teachers and are serving outside of their credential area pursuant to a statute or Title 5 of the California Code Regulations that allows a local educational agency to otherwise legally assign the individual at the local level.
(iii)Individuals serving on a valid district or university intern credential that authorizes the subject, setting, or pupil population being taught.
(iv)Individuals who are fully credentialed teachers but are teaching a subject, setting, or pupil population not authorized by their credential area, excluding assignments authorized by subdivision (b) of Section 80005 of Title 5 of the California Code of Regulations.
(v)Individuals serving on the basis of a valid permit issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vi)Individuals serving on a short-term or variable-term waiver document issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vii)Individuals who are identified as misassigned by the commission, other than those educators described in clause (iv).
(B)Identify instances of a teacher shortage in each instance where, as of Census Day, a local educational agency identifies a vacant position or an unfilled position.
(4)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county levels.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)This section does not change existing rights or obligations, including, but not limited to, those specified in Sections 33126 and 33315.
(n)(1)A teacher of a course offered employed by a local educational agency and offering a course in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
(2)Paragraph (1) does not authorize a local educational agency to assign a teacher of record that is not an employee of the local educational agency.
SEC. 25.SEC. 23.Section 45037 of the Education Code is amended to read:45037.(a)Except as provided in Section 45036, for the fiscal year 200102 and for any fiscal year thereafter in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, the school district, county office of education, or charter school that the person is employed by shall be assessed a penalty that shall be calculated as provided in subdivision (b) and withheld from state funding otherwise due to the school district, county office of education, or charter school.
(1)Notwithstanding Section 46300, the attendance of the noncertificated persons pupils during the period of service shall be included in the computation of average daily attendance.
(2)The noncertificated persons period of service shall not be excluded from the determination of eligibility for instruction time pursuant to Article 8 (commencing with Section 46200) of Chapter 2 of Part 26.
(b)(1)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, add the total number of schooldays on which the person rendered any amount of the service.
(2)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, for a period of service during which the person did not have a valid certification document, add the number of schooldays on which the person rendered any amount of the service without a valid certification document.
(3)Divide the number determined in paragraph (2) by the number determined in paragraph (1) and carry the result to four decimal places.
(4)Multiply a school districts or charter schools local control funding formula grant apportionment for the fiscal year, calculated pursuant to Section 42238.02, as implemented by Section 42238.03, or a county office of educations local control funding formula alternative education grant computed pursuant to Section 2574, as apportioned pursuant to Section 2575, for the fiscal year, for the program in which the noncertificated person rendered service by the number determined in paragraph (3).
(c)Beginning in 200203, if a county office of education releases a warrant in favor of a person for whom a period of school district or charter school service is included in the calculation set forth in paragraph (2) of subdivision (b), and the warrant is either compensation for employment as a teacher or for employment in some other capacity if the county office of education has direct knowledge or is in possession of information giving rise to a reasonable inference that the person is rendering service as a teacher, the county office of education shall be assessed a penalty. The penalty assessed to a county office of education for any fiscal year in which one or more school district or charter school teachers did not have a valid certification document shall be equal to the lesser of three amounts as follows:
(1)Fifty percent of all penalties assessed for that fiscal year to all school districts or charter schools in the county office of educations jurisdiction pursuant to subdivision (b).
(2)One-half percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when two or fewer school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(3)One percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when three or more school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(d)Except as provided in Section 41344.1, nothing in this section may be waived in whole or in part.
SEC. 26.SEC. 24.Section 45125.1 of the Education Code is amended to read:45125.1.(a)Any entity that has a contract with a local educational agency shall ensure that any employee who interacts with pupils has a valid criminal records summary as described in Section 44237. When the contracting entity performs the criminal background check, it shall immediately provide any subsequent arrest and conviction information it receives to any local educational agency that it is contracting with pursuant to the subsequent arrest service.
(b)(1)This section does not apply to an entity providing services to a local educational agency, as described in subdivision (a), in an emergency or exceptional situation, such as when pupil health or safety is endangered or when repairs are needed to make school facilities safe and habitable.
(2)Notwithstanding subdivision (a), an employee of any entity that has a contract with a local educational agency, and that offers work experience opportunities for pupils, including, but not limited to, opportunities pursuant to Section 51760, 52336, 52372, 52410, or 52460, Article 1 (commencing with Section 52300), Article 5 (commencing with Section 52381), or Article 7 (commencing with Section 52450) of Chapter 9 of Part 28 of Division 4, Chapter 16.5 (commencing with Section 53070) of Part 28 of Division 4, Article 5 (commencing with Section 54690) of Chapter 9 of Part 29 of Division 4, or Part 54.5 (commencing with Section 88820) of Division 7 of Title 3, or workplace placements as part of a pupils individualized education program, including, but not limited to, the services described in Article 3 (commencing with Section 56470) of Chapter 4.5 of Part 30 of Division 4, is not required to have a valid criminal records summary pursuant to subdivision (a) if all of the following requirements are met:
(A)At least one adult employee in the workplace during the pupils work hours, who has direct contact with the pupil and has been designated by the employer as the employee of record who is responsible for the safety of the pupil, has a valid criminal records summary as described in Section 44237.
(B)A staff representative of the local educational agency makes visitations as specified in a pupils individualized education program, or, if unspecified, at least once every three weeks to consult with the pupils workplace liaison, observe the pupil at the workplace, and check in with the pupil to ensure the pupils health, safety, and welfare, including by addressing any concerns the pupil has raised.
(C)The parent or guardian of the pupil has signed a consent form regarding the pupils work placement, attesting that the parent or guardian understands the duties assigned to the pupil and the nature of the workplace environment.
(3)If a pupil participates in services provided by a contractor as part of an independent study program and the pupil is under the immediate supervision and control of the pupils parent or guardian during the provision of those services, the local educational agency shall do either of the following:
(A)Verify completion of a valid criminal records summary for all employees of the contractor who interact with the pupil.
(B)Ensure that the parent or guardian of the pupil has signed a consent form before the pupils interaction with a person employed by the contractor, attesting that the parent or guardian understands that the person employed by the contractor has not completed a valid criminal records summary as described in Section 44237.
(c)On a case-by-case basis, a local educational agency may require an entity with whom it has a contract to comply with the requirements of this section for employees in addition to those described in subdivision (a). The entity shall prepare and submit those employees fingerprints to the Department of Justice, as described in subdivision (a).
(d)(1)The Department of Justice shall ascertain whether the individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has been arrested or convicted of any crime insofar as that fact can be ascertained from information available to the Department of Justice. Upon implementation of an electronic fingerprinting system with terminals located statewide and managed by the Department of Justice, the Department of Justice shall ascertain the information required pursuant to this section within three working days. When the Department of Justice ascertains that an individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has a pending criminal proceeding for a felony as defined in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1, the Department of Justice shall notify the employer designated by the individual of that fact. The notification shall be delivered by telephone or email to the employer.
(2)The Department of Justice, at its discretion, may notify the local educational agencies in instances when the employee is defined as having a pending criminal proceeding described in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1.
(3)The Department of Justice shall forward one copy of the fingerprints to the Federal Bureau of Investigation to verify any record of previous arrests or convictions of the applicant. The Department of Justice shall review the criminal record summary it obtains from the Federal Bureau of Investigation and shall notify the employer only as to whether or not an applicant has any convictions or arrests pending adjudication for offenses that, if committed in California, would have been punishable as a violent or serious felony. The Department of Justice shall not provide any specific offense information received from the Federal Bureau of Investigation. The Department of Justice shall provide written notification to the contract employer only concerning whether an applicant for employment has any conviction or arrest pending final adjudication for any of those crimes, as specified in Section 45122.1, but shall not provide any information identifying any offense for which an existing employee was convicted or has an arrest pending final adjudication.
(e)(1)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall not permit an employee to interact with pupils until the Department of Justice has ascertained that the employee has not been convicted of a felony as defined in Section 45122.1.
(2)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a felony if the employee has obtained a certificate of rehabilitation and pardon pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
(3)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a serious felony that is not also a violent felony if that employee can prove to the sentencing court of the offense in question, by clear and convincing evidence, that the employee has been rehabilitated for the purposes of schoolsite employment for at least one year. If the offense in question occurred outside this state, then the person may seek a finding of rehabilitation from the court in the local educational agency in which the employee is a resident.
(f)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall certify in writing to the local educational agency that neither the employer nor any of its employees who are required by this section to submit or have their fingerprints submitted to the Department of Justice and who may interact with pupils have been convicted of a felony as defined in Section 45122.1.
(g)Where reasonable access to the statewide electronic fingerprinting network is available, the Department of Justice may mandate electronic submission of the fingerprint cards and other information required by this section.
(h)(1)For purposes of this section, an individual operating as a sole proprietor of an entity that has a contract with a local educational agency, as described in subdivision (a), shall be considered an employee of that entity.
(2)To protect the safety of any pupil that may interact with an employee of an entity that is a sole proprietorship and has a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c), a local educational agency shall prepare and submit the employees fingerprints to the Department of Justice, as described in subdivision (a).
(i)For purposes of this section, local educational agency means a school district, county office of education, or charter school.
SEC. 25.Section 46149 is added to the Education Code, immediately following Section 46148, to read:46149.Notwithstanding any other law, a school district, county office of education, or charter school that offers grades 10 and 12 shall also offer and enroll pupils in grade 11.
SEC. 27.SEC. 26.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 28.SEC. 27.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)(A)Visit each charter schoolsite, resource center, meeting space, and satellite facility established by the charter school at least annually.
(B)Commencing July 1, 2028, annually attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and review the agendas and minutes of those meetings to monitor actions that may be taken.
(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)(A)Monitor the fiscal condition of each charter school under its authority.
(B)Commencing July 1, 2028, annually monitor payments of each charter school under its authority to verify that the payments are legal and have proper authorization. Monitoring shall include, but not be limited to, a review of credit statements, debit card statements, other electronic payment methods and media, and bank statements.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)A renewal of the charter is granted or denied.
(B)The charter is revoked.
(C)The charter school will cease operation for any reason.
(6)(A)Commencing July 1, 2028, annually verify all of the following for a nonclassroom-based charter school:
(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.
(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.
(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.
(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:
(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.
(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.
(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.
(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.
(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.
(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).
(7)Commencing July 1, 2028, a chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.
(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
SEC. 29.SEC. 28.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall revise regulations to require that charter schools report periodic and annual financial data in the same manner and on the same form prescribed for school districts in accordance with all of the following:
(a)Charter schools with an average daily attendance of 5,000 or more pupils and all nonclassroom-based charter schools shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year.
(b)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year.
(c)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.
SEC. 30.SEC. 29.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph if it has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership. Charter schools proposed in a school district satisfying one of these conditions shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by both the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers in charter schools shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct provide for an annual and independent financial and compliance audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 31.SEC. 30.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(L)Admission policy and procedures, consistent with subdivision (e).
(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct provide for an annual and independent financial and compliance audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 32.SEC. 31.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 33.SEC. 32.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize, except as provided in subdivision (d). A school district with an average daily attendance of fewer than 10,000 pupils shall not authorize one or more nonclassroom-based charter schools or approve a material revision to expand one or more existing nonclassroom-based charter schools if doing so would result in more than a totality of 100 percent of the average daily attendance of the school district authorizing the charter.
(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)Except as provided in subdivision (d), if the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
(d)(1)Notwithstanding subdivisions (a) and (c), a chartering authority that authorized a nonclassroom-based charter school in operation on or before December 31, 2025, and that exceeds the limits established in subdivision (a), may reauthorize and continue to be the chartering authority for that nonclassroom-based charter school if, as of December 31, 2025, the chartering authority employs at least four full-time equivalent executive-level staff members whose primary responsibilities are related to the following job classifications and areas of employment:
(A)Superintendent.
(B)Chief business official.
(C)Human resources.
(D)Special education.
(E)Curriculum.
(2)Staff members who have the job responsibilities described in subparagraphs (A), (C), (D), and (E) of paragraph (1) shall hold an administrative credential issued by the Commission on Teacher Credentialing, as required by Section 35028.
SEC. 34.SEC. 33.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.
(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.
(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall include, but not be limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.
(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:
(1)Acting as the fiscal agent for the program.
(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.
(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.
(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.
(4)Facilitating an annual statewide conference for chartering authorities.
(5)Establishing and facilitating an advisory board, as provided in subdivision (e), (d), to provide input on the development and full implementation of services provided by the program.
(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (e) (c) to measure the programs continual improvement and program fidelity, and to document the programs impact.
(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:
(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.
(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.
(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.
(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.
(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.
(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.
(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:
(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.
(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.
(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.
(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.
(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:
(A)The role and functions of the advisory board.
(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.
(C)The terms of advisory board members.
(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.
(E)Meetings, including the frequency of meetings.
(F)The rules of order.
(G)The process for amending bylaws.
(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:
(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:
(i)Responsibility: the duty to serve the states pupils and the public.
(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.
(iii)Fairness: impartial and just treatment of all stakeholders.
(iv)Knowledge: understanding of charter school law and practice.
(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:
(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.
(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.
(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.
(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.
SEC. 35.SEC. 34.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder. The state board shall adopt regulations that apply Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 to charter schools. To the extent that these regulations concern the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)(1)Notwithstanding any other law and except as provided in paragraph (1) of subdivision (e), a charter school that has an approved charter may receive funding for nonclassroom-based instruction only if a determination for funding is made pursuant to Section 47634.2 by the state board. The determination for funding shall be subject to any conditions or limitations the state board may prescribe. The state board shall adopt regulations on or before January 1, 2027, to commence with the 202728 fiscal year, that define and establish general rules governing nonclassroom-based instruction that apply to all charter schools and to the process for determining funding of nonclassroom-based instruction by charter schools offering nonclassroom-based instruction other than the nonclassroom-based instruction authorized by paragraph (1) of subdivision (e). Nonclassroom-based instruction includes, but is not limited to, independent study, home study, workstudy, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(2)A charter school that receives a determination pursuant to Section 47634.2 is not required to reapply annually for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the state board. Notwithstanding any other law, the state board may require a charter school to provide updated information at any time it determines that a review of that information is necessary. The state board may terminate a determination for funding if updated or additional information requested by the state board is not made available to the state board by the charter school within a reasonable amount of time or if the information otherwise supports termination. A determination for funding pursuant to Section 47634.2 shall not exceed five years.
(3)A charter school that offers nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2 to receive funding each time its charter is renewed or materially revised pursuant to Section 47607. A charter school that materially revises its charter to offer nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2.
(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations pursuant to paragraph (1) of subdivision (d) specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of data collection in the California Longitudinal Pupil Achievement Data System (CALPADS), virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.
(5)Notwithstanding any other law, the state board and the Superintendent shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 36.Section 47612.7 of the Education Code is amended to read:47612.7.(a)Notwithstanding any other law and except as provided in subdivision (b), from January 1, 2020, to December 31, 2025, inclusive, the approval of a petition for the establishment of a new charter school, as defined in paragraph (2) of subdivision (e) of Section 47612.5, is prohibited.(b)Subdivision (a) shall not apply to a nonclassroom-based charter school that was granted approval of its petition and providing educational services to pupils before October 1, 2019, under either of the following circumstances:(1)If Assembly Bill 1507 of the 201920 Regular Session amends Section 47605.1 and becomes operative on January 1, 2020, and the charter school is required to submit a petition to the governing board of a school district or county board of education in an adjacent county in which its existing resource center is located in order to comply with Section 47605.1, as amended by Assembly Bill 1507 of the 201920 Regular Session, or to retain current program offerings or enrollment.(2)If a charter school is required to submit a petition to a school district or county board of education in which a resource center is located in order to comply with the court decision in Anderson Union High School District v. Shasta Secondary Home School (2016) 4 Cal.App.5th 262, or other relevant court ruling, and the petition is necessary to retain current program offerings or enrollment.(3)A charter school authorized by a different chartering authority pursuant to paragraphs (1) and (2) shall be regarded by the department as a continuing charter school for all purposes to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.(c)Notwithstanding Section 33050 or any other law, the state board shall not waive the restrictions described in this section.(d)(1)No later than October 1, 2023, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall study the processes used to determine funding for nonclassroom-based charter schools.(2)The study shall identify and make recommendations on potential improvements to the processes, including recommendations for enhancing oversight and reducing fraud, waste, and abuse.(3)No later than March 1, 2024, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall report to the appropriate fiscal and policy committees of the Legislature, the Department of Finance, the department, and the executive director of the state board on recommendations and observations as a result of the study. These recommendations or observations shall consider the fiscal impact on the state.(e)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.SEC. 37.Section 47613.3 is added to the Education Code, to read:47613.3.(a)A charter school shall comply with all of the following:(1)For purposes of providing direct services to pupils, a charter school shall not expend public funds for a contract with a contractor, unless that contractor complies with both of the following requirements:(A)The materials, programs, and organizations providing services are nonsectarian.(B)The funds that would be used to pay for direct services to pupils are not used to pay tuition or fees at a private school.(2)A charter school shall not offer any financial payments or gifts to a teacher, a pupil or prospective pupil, or to the parent or guardian of a pupil or prospective pupil for enrollment, referral, retention, participation in school meetings or activities, or participation in direct services to pupils by contractors.(3)The salary and other income paid to an employee by a charter school or an entity managing a charter school, as defined by Section 47604.1, shall not depend on pupil attendance or pupil course completion.(4)Management services, business services, marketing, and technology contract fees, including, but not limited to, an entity managing a charter school, as defined by Section 47604.1, shall not be calculated as a percentage of the revenue of the charter school, as defined in Section 47613.(b)The extent of the charter schools compliance with subdivision (a) shall be reviewed and reported as part of the annual, independent financial audit that a charter school is required to transmit by December 15 of each year pursuant to Section 41020.(c)The Controller shall include the items listed in paragraphs (1) to (4), inclusive, of subdivision (a) in the next revision of the audit guide.(d)This section does not supersede or invalidate a contract that is in effect at the time this section becomes operative. If a contract is in effect at the time this section becomes operative, the contract shall remain in effect until the parties to the agreement negotiate a successor agreement. A memorandum of understanding shall not extend a contract that is in effect at the time this section becomes operative.(e)This section shall become operative on July 1, 2026.SEC. 38.SEC. 35.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other provision of law, through the 202526 fiscal year, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, shall be adjusted by the state board.
(2)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board in accordance with this section.
(b)(1)The state board shall adopt regulations setting forth criteria for the determination of funding for nonclassroom-based instruction and shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the state board shall consider, among other factors it deems appropriate, all of the following:
(A)The amount of the charter schools total budget expended on certificated employee salaries and benefits and on schoolsites.
(B)The teacher-to-pupil ratio in the school.
(C)One-time local, state, and federal funds.
(D)Expenses for facilities.
(E)Budget reserves.
(2)The state board shall appoint an advisory commission to recommend criteria to the state board in accordance with this section if it has not done so by January 1, 2002. The advisory commission shall include, but is not limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
(c)Commencing with the 202728 fiscal year, the state boards Advisory Commission on Charter Schools shall recommend to the state board the approval of a funding determination request submitted by a charter school consistent with all of the following:
(1)(A)Approval of the request at 70 percent if both of the following criteria are met, unless there is a reasonable basis to recommend otherwise:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 35 percent but less than 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 60 percent but less than 70 percent.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(2)(A)Approval of the request at 85 percent, unless there is a reasonable basis to recommend otherwise, if both of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 70 percent but less than 80 percent.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying a percentage that is greater than 70 percent or if the recommended percentage is lower than the requested percentage, the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(3)(A)Approval of the request at 100 percent, unless there is a reasonable basis to recommend less, if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 80 percent.
(iii)The ratio of average daily attendance for independent study pupils to full-time certificated employees responsible for independent study does not exceed a pupil-teacher ratio of 25:1 or the equivalent ratio of pupils to full-time certificated employees for all other educational programs operated by the largest unified school district, as measured by average daily attendance, in the county or counties in which the charter school operates.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(4)(A)Due to the nonclassroom-based instruction not being substantially dedicated to the instructional benefit of the pupils, a denial of the request if one or both of the following criteria are met, unless there is a reasonable basis to recommend otherwise:
(i)The percentage calculated for certificated employee salaries and benefits is less than 35 percent.
(ii)The percentage calculated for total expenditures on instruction and related services is less than 60 percent.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying the denial and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(d)Commencing with the 202728 fiscal year, all of the following shall apply:
(1)An approved determination of funding for a new charter school in its first year of operation shall be submitted by December 1 and shall be for two fiscal years. Within 90 days after the end of its first fiscal year of operation, a charter school shall submit unaudited actual expense reports and a funding determination form based on the charter schools actual second-year budget. If the Advisory Commission on Charter Schools determines that the actual expenditures of the charter school or the second-year funding determination form do not support the funding determination for the second year, the Advisory Commission on Charter Schools shall recommend that the state board revise the funding determination.
(2)Charter schools that are part of a network of nonclassroom-based charter schools shall apply for a funding determination at the same time in a year determined by the department and shall be considered by the state board at the same hearing. The department shall determine the year based on the furthest funding determination date within the network, but no later than five years after the network is identified. The funding determination for a charter school that is part of a network of nonclassroom-based charter schools shall not exceed three years. If a charter school already has a multiyear funding determination prior to being identified as part of a network, that determination shall be deemed invalid and the network shall submit documentation for a new funding determination.
(3)(A)Nonclassroom-based charter schools shall submit the financial documentation required for a funding determination to the department on an annual basis in the years between funding determinations, and the department shall review the documentation, consistent with all of the following:
(i)Documentation for the pupil-to-teacher ratio shall include, for each certificated employee, their Commission on Teacher Credentialing-provided State Teacher Statewide Educator Identifier (SEID) as reported in the California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and the calculation of the pupil-to-teacher ratio.
(ii)Documentation for the certificated staff salaries and benefits shall include, for each employee, their Commission on Teacher Credentialing-provided State Teacher Statewide Educator Identifier (SEID) as reported in the California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, salary and benefit amounts, percent of time spent on providing direct instruction and instructional support to pupils, indicate whether the certificated employee provides direct instruction or instructional support to pupils at two or more nonclassroom-based charter schools at the direction of their employer, and the calculation of the percent of revenue expended on certificated staff salaries and benefits.
(iii)Documentation for instruction and related services shall include financial records and other supporting records necessary to determine the qualifying expenditures, consistent with the definition of instruction and related services, and the calculation of the percent of revenue expended on instruction and related services.
(B)The Advisory Commission on Charter Schools shall recommend to the state board funding determinations based on a review of aggregate expenditure and revenue information from all years since the prior funding determination was made and shall recommend reducing the funding accordingly.
(4)Any multiyear funding determination approved by the state board may be modified by the state board, including the terms of the multiyear approval and the funding authorized. The state board may terminate a determination of funding if updated or additional information requested by the department or the advisory committee pursuant to this section is not made available by a charter school within a reasonable amount of time or if credible information from any source supports termination. If credible information from a source supports termination, the charter school shall have a reasonable amount of time prior to the termination of funding to provide additional information to support the charter schools determination of funding.
(5)If a charter school is maintaining an unassigned fund balance for economic uncertainties that is 5 percent or less of the charter schools annual expenditures, the Superintendent shall notify the chartering authority of the charter school to investigate whether the charter school has sufficient reserves to address economic uncertainties.
(6)A charter school that is eligible for a funding determination based on the criteria pursuant to subdivision (c) may be eligible for an increase in the funding determination only if the state board finds a reasonable basis to recommend an increase in accordance with the mitigating circumstances described in paragraph (7). A charter school granted an increase in the funding determination based on mitigating circumstances shall receive a funding determination not to exceed two years.
(7)(A)A reasonable basis for the Advisory Commission on Charter Schools to make a recommendation other than one that results from the criteria described in subdivision (c) includes, but is not limited to, documented data regarding the individual circumstances of the charter school related to the following: one-time, unique, or exceptional expenses for facilities, the acquisition of one or more schoolbuses, the acquisition and installation of computer hardware not related to the instructional program, special education charges levied on the charter school by a local educational agency, or restricted private grants of funds awarded to the charter school that cannot be expended for teacher salaries. The Advisory Commission on Charter Schools may give charter schools that are in their first year of operation serious consideration of full funding.
(B)Documentation for one-time, unique, or exceptional expenses for facilities shall be evidenced by at least one of the following: an approved material revision of the schools charter by their chartering authority to add one or more locations; an approved facility lease, facility purchase agreement, or contracts for architectural services, building construction services, or the like; evidence of plans submitted to a local government for permitting approval; a published request for proposals; or an item approved by the governing body of the charter school declaring the schools intent to lease, acquire, or renovate a facility that includes a detailed project budget and project timeline.
(C)A charter school that applies for a funding determination based on mitigating circumstances related to documented one-time, unique, or exceptional expenses for facilities in two or more consecutive funding periods shall be required to demonstrate substantial progress towards the leasing, purchase, or renovation of that facility in order to receive a greater funding determination level than which they would normally qualify pursuant to the criteria established in subdivision (c).
(D)The Advisory Commission on Charter Schools shall consider a charter schools amount of budget reserves, categories of reserves, and purpose of reserves in determining whether a reasonable basis to make a recommendation other than one that results from the criteria described in subdivision (c) is appropriate.
(e)Commencing with the 202728 fiscal year, charter schools that submit a funding determination request shall adhere to all of the following:
(1)Exclude unspent one-time revenues that are permitted to be spent over multiple fiscal years from the calculations of the percentage of school revenues spent on instruction and related services if the charter school recognizes these revenues and expenditures in the year the funds are actually spent.
(2)May include any funds spent on resource centers or site-based instructional facilities operated by the charter school used primarily for purposes of in-person instruction and pupil support services, including, but not limited to, tutoring, counseling, special education services, libraries, and visual and performing arts facilities. A charter school shall provide the department with supporting documentation related to these costs.
(3)Report the amount and classification of its reserves on funding determination forms consistent with state accounting categories of assigned, unassigned, restricted, committed, and nonspendable.
(4)Exclude from the revenue the portion of a net increase to the reserve for economic uncertainties that is sufficient to increase the fund balance to 10 percent of the charter schools annual expenditures if the charter school has a fund balance that represents less than 10 percent of their annual expenditures. This excluded amount shall not exceed 5 percent of a charter schools total revenue in any one year.
(5)If applicable, explain on the funding determination form the purposes for which unassigned fund balances are being maintained at a level that is 10 percent or more of the charter schools annual expenditures.
(f)This section does not authorize the state board to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) of Section 47612.5.
(g)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction.
(h)Notwithstanding any other provision of law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
(i)For purposes of this section, the following definitions apply:
(1)Network of nonclassroom-based charter schools has the same meaning as defined in subdivision (b) of Section 47634.3.
(2)Nonclassroom-based instruction has the same meaning as defined in paragraph (2) of subdivision (e) of Section 47612.5.
(3)Pupil-teacher ratio has the same meaning as described in Section 51745.6.
(4)Schoolsite has the same meaning as described in paragraph (3) of subdivision (e) of Section 47612.5.
SEC. 39.SEC. 36.Section 47634.3 is added to the Education Code, to read:47634.3.(a)Beginning with the 202728 school year, the department shall annually develop a list that identifies networks of nonclassroom-based charter schools, as described in this section, based on data from the prior school year.
(b)For purposes of this section, a network of nonclassroom-based charter schools means two or more nonclassroom-based charter schools, as defined pursuant to paragraph (2) of subdivision (e) of Section 47612.5, that meet one or more of the following:
(1)Have a shared governance or management structure, including having supervisors and managers who typically function on a multischool level and oversee, evaluate, control teaching assignments, control class rosters, or discipline teachers across multiple schools.
(2)Are under the control of the same corporate or legal entity, or are controlled by legal entities wherein one or more of the corporate directors are appointed or elected by another common entity.
(3)Have two or more nonclassroom-based charter schools that are determined by the Public Employment Relations Board to constitute either a single employer or joint employer.
SEC. 40.SEC. 37.Section 51745.6 of the Education Code is amended to read:51745.6.(a)The (1)Except as provided in paragraph (2), the ratio of average daily attendance for independent study pupils 18 years of age or less to for a school district, district or county office of education, or and for independent study pupils regardless of age for a charter school school, to full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall comply with one of the following:
(1)(A)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. school.
(2)(B)It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. year. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(3)(C)It shall be calculated by using not exceed a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a fixed ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio. All pupils of the school district, county office of education, or charter school, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.
(2)Notwithstanding paragraph (1), a new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575, 2575 for county offices of education, education and Section 42238.05, 42238.05 for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 41.SEC. 38.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 39.Section 51747.5 of the Education Code is amended to read:51747.5.(a)The independent study by each pupil shall be coordinated, evaluated, and, notwithstanding subdivision (a) of Section 46300, shall be under the general supervision of an employee of the local educational agency who possesses a valid certification document pursuant to Section 44865 or an emergency credential pursuant to Section 44300, registered as required by law.
(b)(1)A local educational agency may claim apportionment credit for independent study only to the extent of the time value of pupil work products, as personally judged in each instance by a certificated teacher employed by the local educational agency, or the combined time value of pupil work product and pupil participation in synchronous instruction pursuant to paragraph (2). It is the intent of the Legislature that teachers be given access to digital assignment tracking systems to reduce workload associated with evaluating and accounting for pupil work and synchronous instruction participation.
(2)For purposes of computing average daily attendance for each pupil enrolled in independent study pursuant to Section 51747, the following computations shall apply:
(A)(i)For each schoolday, add the combined equivalent daily time value of pupil work products, as personally judged by a certificated employee of the local educational agency.
(ii)For purposes of this section, pupil work products may include the daily time value spent by a pupil engaged in asynchronous instruction, including work completed on an online or computer-based instructional activity, regardless of whether pupil work products are produced, if the computer program documents pupil participation. The local educational agency shall maintain documentation of hours or fraction of an hour of both pupil work products and the time that the pupil engaged in asynchronous instruction.
(iii)(I)Except as provided in subclause (II), a local educational agency shall maintain one completed pupil work product in each of the subjects of English language arts, mathematics, history-social science, and science for a pupil enrolled in independent study for each of three attendance periods as follows:
(ia)The beginning of the school year through the first attendance period.
(ib)The day following the end of the first attendance period to the end of the schools second attendance period.
(ic)The day following the end of the schools second attendance period to the end of the school year.
(II)Notwithstanding subclause (I), if a pupil is not enrolled in one or more of the subjects identified in subclause (I) during an attendance period, the local educational agency shall maintain four completed pupil work products per attendance period that are representative of the pupils course schedule.
(B)(i)For each schoolday, add the combined daily instructional minutes a pupil participated in synchronous instruction, as defined by subdivision (d) of Section 51745.5 and offered pursuant to subdivision (e) of Section 51747, for which evidence of pupil participation is furnished and maintained. Evidence of pupil participation may include, but is not limited to, pupil work produced or performed, or documentation that the pupil participated in an instructional period either visually or verbally, as verified by a certificated employee and maintained by the local educational agency for each hour or fraction thereof of the synchronous instructional offering.
(ii)Pursuant to paragraph (1), a local educational agency may claim apportionment credit in this paragraph insofar as a pupils participation in a synchronous instructional offering augments the time value of pupil work product.
(C)For each schoolday, add the sum of subparagraphs (A) and (B). If the sum of subparagraphs (A) and (B) meets the applicable minimum schoolday requirements for each schoolday, and all other requirements in this section have been met, each schoolday shall be credited as up to one schoolday of attendance.
(3)The average daily attendance computed pursuant to this subdivision shall not result in more than one unit of average daily attendance per pupil.
(4)Notwithstanding any other law, average daily attendance computed for pupils enrolled in independent study shall not be credited with average daily attendance other than what is specified in this section.
(c)A local educational agency shall document each pupils participation in live interaction and synchronous instruction pursuant to Section 51747 on each schoolday, as applicable, in whole or in part, for which live interaction or synchronous instruction is provided as part of the independent study program. A pupil who does not participate in scheduled live interaction or synchronous instruction shall be documented as nonparticipatory for that schoolday for purposes of pupil participation reporting and tiered reengagement pursuant to Section 51747.
(d)A local educational agency shall maintain written or computer-based evidence of pupil engagement that includes, but is not limited to, a grade book or summary document that, for each class, lists all assignments, assessments, and associated grades.
(e)For purposes of this section, a local educational agency shall not be required to sign and date pupil work products when assessing the time value of pupil work products for apportionment purposes.
(f)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate compliance reviews for subdivisions (a) to (d), inclusive, unless compliance verification for those subdivisions is already included in the audit guide. Findings of noncompliance shall result in the loss of apportionment equal to the average daily attendance impacted by the noncompliance.
(g)The provisions of this section are not subject to waiver by the state board, by the Superintendent, or under any provision of Part 26.8 (commencing with Section 47600).
SEC. 42.SEC. 40.Section 51748 of the Education Code is amended to read:51748.School districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by any a pupil who is not otherwise identified in the written records of the school district, charter school, or county board of education by grade level, program placement, and the school in which the pupil is enrolled.
SEC. 43.Section 51749.7 is added to the Education Code, immediately following Section 51749.6, to read:51749.7.(a)A local educational agency shall not allocate, or advertise the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are not provided by a credentialed employee of the local educational agency for the pupil and that are paid for by the local educational agency.(b)It is the intent of the Legislature that this section does not apply to expanded learning opportunities programs.SEC. 41.Article 11.5 (commencing with Section 51827) is added to Chapter 5 of Part 28 of Division 4 of Title 2 of the Education Code, to read:11.5.Local Educational Agency Contracting51827.(a)On or before July 1, 2027, the governing board or body of a local educational agency shall adopt a policy for the local educational agency to comply with in order to evaluate and approve contractors. The policy shall include all of the following provisions:
(1)A local educational agency shall not expend public funds for a contract unless the materials, programs, and activities are nonsectarian and comply with nondiscrimination provisions of state and federal law.
(2)A local educational agency shall not expend public funds for a contract that pays for tuition or fees for a pupil at a private school that has filed an affidavit pursuant to Section 33190, except if required pursuant to a pupils individualized education program.
(3)Financial payments or gifts shall not be offered by a local educational agency to a pupil, prospective pupil, or a pupils parent, guardian, or relative as an incentive for enrollment, referral, or retention.
(4)For a nonclassroom-based charter school, contracts shall itemize costs attributed to credentialed staff, administrative staff, and instruction and related services with sufficient detail to determine a qualifying expense for purposes of a funding determination.
(5)A local educational agency shall ensure contracts reflect a reasonable market value.
(6)A local educational agency shall not purchase or contract for season passes or membership to amusement or theme parks, zoos, or family entertainment activities, except that a local educational agency may offer a one-time admission that is aligned with teacher assignments, or graduation activities funded through parent or student organizations. Family entertainment activities include, but are not limited to, laser tag, arcades, miniature golf, and trampoline parks.
(7)A local educational agency shall only contract with an entity that has a business license or business certificate, where applicable, and has appropriate insurance for the service being offered. Government agencies are not required to have a business license.
(8)A local educational agency shall not contract with a pupil or a pupils parent, guardian, or relative for services provided exclusively to that pupil, except for any of the following persons who are compensated by the local educational agency to provide school-related transportation for a pupil:
(A)A parent or legal guardian.
(B)A relative, as defined in paragraph (2) of subdivision (c) of Section 361.3 of the Welfare and Institutions Code, or a nonrelative extended family member, as defined in Section 362.7 of the Welfare and Institutions Code.
(C)A court-appointed educational rights holder.
(D)A court-appointed special advocate.
(9)A local educational agency shall not reimburse parents or guardians for any activities or services. This paragraph does not prohibit a local educational agency from reimbursing parents or guardians for activities or services for pupils with disabilities pursuant to an individualized education program and required by a legal settlement or agreement.
(10)A contractor who interacts with pupils outside the immediate supervision and control of a school employee shall have policies and procedures related to pupil and site safety, including in virtual settings, emergency response, and accident reporting that are reasonable for the instruction or activity.
(11)Contractor personnel interacting with pupils shall have a valid criminal records summary as described in Section 45125.1.
(12)As part of a contract with a local educational agency, contractors shall provide evidence of qualification and expertise for the activities to be provided, in accordance with policies of the governing board or body of the local educational agency.
(13)As part of a contract with a local educational agency, contractors shall not charge fees to pupils or the pupils parent or legal guardian.
(b)Auditing of the approval of, and compliance with, policies enacted in accordance with subdivision (a) shall be included in the audit guide, Standards and Procedures for Audits of California K-12 Local Educational Agencies, described in Section 14502.1.
(c)This section does not supersede or invalidate a contract that is in effect on or before July 1, 2027. If a contract is in effect on or before July 1, 2027, the contract shall remain in effect until the expiration of the contract or the parties to the agreement negotiate a successor agreement that will be operative after July 1, 2027, that complies with this section. A local educational agency shall not enter into a contract or make an amendment or other ancillary agreement to an existing contract on or after January 1, 2026, that would be operative after July 1, 2027, unless it would comply with this section.
(d)For purposes of this section, local educational agency means a school district, educational joint powers authority, county office of education, or charter school.
SEC. 44.SEC. 42.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:(a)Superintend the schools of that county.(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.(ii)The list of schools pursuant to clause (i) shall be compiled as follows:(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:(i)Minimize disruption to the operation of the school.(ii)Be performed by individuals who meet the requirements of Section 45125.1.(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:(i)Return to the school to verify repairs.(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.(f)Keep in the office of the county superintendent the reports of the Superintendent.(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.(h)Enforce the course of study.(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year.(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (l) of Section 41020, the county superintendent shall do both of the following:(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.(j)Preserve carefully all reports of school officers and teachers.(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(H)For schools that are identified on the list established in the 202425 fiscal year pursuant to subparagraph (A), and only in the fiscal years in which that list is used, a county superintendent shall complete the textbook and instructional materials review conducted for purposes of this paragraph and subparagraph (A) of paragraph (3) of subdivision (i) by the eighth week of the school year. The county superintendent shall prioritize reviewing, within the first four weeks of the school year where practicable, schools for which the county superintendent has received information from a survey, a complaint filed pursuant to Section 35186, or any other reliable source that the school does not have sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i), or that a facility of the school poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year, except as specified in subparagraph (H) of paragraph (2) of subdivision (c).
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (i) (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts, educational joint powers authorities, county superintendents of schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the generally accepted government auditing standards promulgated by the United States Government Accountability Office. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation or both and includes the verification of each of the following:
(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(C)Teacher misassignments pursuant to Section 44258.9.
(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126.
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14503 of the Education Code is amended to read:14503.(a)Financial and compliance audits shall be performed in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
(b)(1)An independent auditor shall not engage in financial or compliance audits unless, commencing after the first audit, and every three years thereafter, the auditor completes a quality control review conducted by the Controller in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office. The time period between commencement of the second and successive quality control review and completion of a subsequent quality control review shall be calculated from the first day of the month following commencement of the completion of the preceding quality control review.
(2)If an independent auditor has not engaged in financial or compliance audits for three or more consecutive years, the Controller shall conduct a quality control review after the auditor completes the first financial or compliance audit.
SEC. 6.Section 14504 of the Education Code is amended to read:14504.To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors. The Controller shall determine whether audit reports are in conformance with reporting provisions of subdivision (a) of Section 14503 and shall notify each local educational agency, the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. The local educational agency, the chartering authority, the county superintendent of schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
SEC. 7.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a local educational agency was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of the Controllers reviews to the entity that referred the independent auditor to the Controller, the independent auditor, and the local educational agency for which the audit was performed, and shall review the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)In performing quality control reviews, the Controller shall ensure that the selection of audits for each auditor undergoing a quality control review is representative of each type of local educational agency for which an auditor performs audits and shall ensure that reviewers have relevant experience with financial or compliance audits of local educational agencies.
(c)(1)The Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for a local educational agency for the prior three fiscal years if any of the following circumstances exists:
(A)The school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.
(B)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(C)The responsible county superintendent of schools or the Superintendent has otherwise determined that a lack of going concern exists for the school district, educational joint powers authority, or county superintendent of schools pursuant to Sections 1630 and 42127.6.
(2)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(d)The Controller shall conduct a quality control review after an authorized certified public accountant or public accountant listed in the Certified Public Accountants Directory Service (1) completes its first local educational agency financial statement and compliance audit or (2) completes its first local educational agency financial statement and compliance audit after three or more years of not having completed an audit.
(e)The Controller shall conduct a quality control review every three years to ensure that all certified public accountant firms are periodically reviewed.
(f)In any matter that is referred to the California Board of Accountancy under subparagraph (A) of paragraph (1) of subdivision (c), the Controller may suspend the independent auditor from performing any local educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local educational agency under subdivision (c). The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(g)The county superintendent of schools, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local educational agency to the California Board of Accountancy for action described in paragraph (2) of subdivision (c) if any of the following circumstances exists:
(1)An audit of a local educational agency was conducted in a manner that may constitute unprofessional conduct as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
(3)The continuing education and prior experience requirements of Section 41020 are not met.
SEC. 8.Section 14505 of the Education Code is amended to read:14505.(a)The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(1)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(2)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to reporting provisions of subdivision (a) of Section 14503.
(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(c)If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits that are necessary to carry out the Controllers duties and responsibilities pursuant to this code and the Government Code. This chapter does not authorize a local educational agency, or a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out additional audits. To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid unnecessary duplication of audit efforts. In performing additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the local educational agency for the costs of these additional audits.
SEC. 10.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the Superintendent on or before June 30 of each year in order to apprise the Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the Superintendent. Before issuing the report, the Controller shall allow each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting that local educational agency.
SEC. 11.Section 14508 of the Education Code is amended to read:14508.The Controller shall submit a report to the Legislature on or before June 30 of each year regarding any recommendations made to the Superintendent pursuant to Section 14507.
SEC. 12.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (o) of Section 41020.
SEC. 13.Section 17604 of the Education Code is amended to read:17604.(a)Wherever in this code the power to contract is invested in the governing board of the school district, the governing body of a charter school, or any member thereof, the power may, by a majority vote of the governing board or body, be delegated to its district superintendent or charter school administrator, or to any persons that the district superintendent or charter school administrator may designate, or if there is no district superintendent or charter school administrator, then to any other officer or employee of the school district or charter school that the governing board or body may designate. The delegation of power may be limited as to time, money, or subject matter or may be a blanket authorization in advance of its exercise, all as the governing board or body may direct. A contract made pursuant to the delegation and authorization shall not be valid or constitute an enforceable obligation against the school district or charter school unless the same shall have been approved or ratified by the governing board or body, the approval or ratification to be evidenced by a motion of the governing board or body duly passed and adopted.
(b)In the event of malfeasance in office, the school district or charter school official invested by the governing board or body with the power of contract shall be personally liable to the school district or charter school employing the official for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 14.Section 33309.5 is added to the Education Code, to read:33309.5.(a)The Office of the Education Inspector General is hereby established in the department. The Education Inspector General shall be appointed by the Governor, subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the state board. The state board shall not prevent or prohibit the Education Inspector General from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(b)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising audits and investigations relating to the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(3)Providing a means for keeping the state board and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1, and the necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(c)For purposes of this section, local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SEC. 15.Section 41020 of the Education Code is amended to read:41020.(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)It is the further intent of the Legislature that all charter schools be audited.
(b)(1)(A)On or before May 1 of each fiscal year, the governing board of each school district or educational joint powers authority shall either provide for an audit of all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the school district or educational joint powers authority to provide for that auditing.
(B)A contract to perform the audit of a school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. Except as provided in clause (ii) of subparagraph (B), an independent audit shall be separately conducted and reported for each charter school that is assigned a County-District-School code.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Notwithstanding subparagraph (A) of paragraph (2), financial data for charter schools that are a component entity of a school district or county office of education shall be presented separately in the applicable audit report as if the financial data of the charter school represents a major fund, and not as a separately conducted and reported audit.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Superintendent to provide for that auditing.
(c)If the governing board of a school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (b) has not provided for an audit of the books and accounts of the local educational agency by April 1, one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Superintendent shall provide for the audit.
(d)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(e)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
(f)Each audit conducted in accordance with this section shall include all of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency.
(2)An audit of pupil attendance procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 or, for a charter school, Section 47606.5.
(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(h)(1)The cost of an audit provided for by a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Superintendent for a county superintendent of schools shall be paid by the Superintendent and the Superintendent shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(4)The cost of an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of a county superintendent of schools shall be paid from the county school service fund.
(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(4)(A)(i)Commencing with the 202627 202728 fiscal year, and every two years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall complete 24 hours of continuing education in governmental accounting, auditing, or related subjects specific to local educational agencies and the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting. The continuing education shall include both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include pupil attendance, independent study, charter schools, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education units taken as part of the California Board of Accountancy licensure requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202627 202728 fiscal year, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall comply with both of the following:
(i)Have certified prior experience conducting financial and compliance audits for local educational agencies.
(ii)Have been peer reviewed by the California Board of Accountancy to ensure that the selection of audits for each auditor undergoing a peer review is representative of each type of local educational agency for which an auditor performs audits and the reviewers have relevant experience with financial or compliance audits of local educational agencies.
(C)The continuing education units and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)Auditors that are under contract with a local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(7)Auditors that conduct audits of local educational agencies shall share work papers and draft audit reports upon request by the local educational agency or a successor auditor of the local educational agency.
(8)A successor auditor of a local educational agency shall request all work papers and draft audit reports in the event that the previous auditor is terminated or otherwise denied for renewal.
(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(k)(1)On or before December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the Superintendent, and the Controller.
(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Upon submission of the final audit report to the governing board of each school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district or educational joint powers authority, the county superintendent of schools shall do all of the following:
(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the school district or educational joint powers authority and request the governing board of the school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction before March 15.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, on or before May 15, that the county superintendent of schools staff has reviewed all audits of school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(4)In the audit of a school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county superintendent of schools and the Superintendent and restate the exception in the audit report. After receiving that notification, the Superintendent shall either consult with the school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before March 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before April 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)If the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before April 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report and shall immediately notify the appropriate chartering authority and the county superintendent of schools of the county in which the charter school is located.
(ii)After receiving notification pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)If the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report and shall immediately notify the Superintendent.
(ii)After receiving notification pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report submitted to a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction before March 15 if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools or chartering authority certifies as of May 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools or chartering authority to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to chartering authorities, the county superintendent of schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(s)Audits of regional occupational centers and programs are subject to this section.
(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accordance with the generally accepted government auditing standards promulgated by the United States General Accountability Office.
SEC. 16.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(2)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(b)(1)(A)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(B)As applicable pursuant to subdivision (a), the Superintendent may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)An extension granted pursuant to this subdivision shall be appropriate if the extension adheres to all of the following requirements:
(A)An extension shall be the shortest amount of time reasonable given the extenuating circumstances justifying the extension.
(B)Extensions shall be in increments of no longer than 45 calendar days.
(C)Extensions shall not exceed a total of 90 calendar days from the due date established pursuant to Section 41020.
(3)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may, after consultation with the governing board or body of a local educational agency, the auditors under contract to the local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the local educational agency. The county superintendent of schools, chartering authority, or Superintendent, shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(4)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may request the Controllers office to investigate the situation and initiate action as provided in subdivision (c).
(c)(1)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may do any of the following:
(A)Accept the action of the county superintendent of schools, chartering authority, or Superintendent, permitted by subdivision (b).
(B)Conduct the audit and prepare the auditors report, using the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.
(C)Contract with any qualified certified public accountant or public accountant, using the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the local educational agency.
(D)Consistent with the limits described in paragraph (2) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)The Controllers office shall consult with the governing board or body of the local educational agency, the auditors under contract to the local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(d)Notwithstanding any extension granted under subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under subparagraph (B) or (C) of paragraph (1) of subdivision (c).
(e)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than 15 calendar days from the due date established under Section 41020.
(f)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 17.Section 41020.3 of the Education Code is amended to read:41020.3.By January 31 of each year, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Sections 35145, 47604, and 47604.1.
SEC. 18.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202627 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by grade, month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study. Monthly enrollment shall be reported as the enrollment recorded on the last day of the school month, as that term is described in Section 37201.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(2)(A)Schedule of pupil attendance: schedule of pupil attendance by grade, month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.
(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.
(5)(A)Schedule of pupil-to-teacher ratio: for independent study programs at a school district, county office of education, or charter school, the schedule of pupil-to-teacher ratio, including, but not limited to, for each employee, their California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and numbers of pupils assigned to that teacher across the teachers assignment.(B)For a charter school or an entity managing a charter school, as defined in Section 47604.1, that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.(C)For independent study programs at school districts, county offices of education, or charter schools, provide a schedule of the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6.(6)(5)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.
(7)(6)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.
(8)Schedule of expense of education: schedule of the calculation for the schools current expense of education, as defined in Section 41372.(9)(7)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.
(10)Schedule of funding determination thresholds: for nonclassroom-based charter schools, a schedule of the funding determination process thresholds, including the percent of revenue expended on certificated staff compensation, percent of revenue expended on instruction and related services, and the pupil-to-teacher ratios.(b)Commencing with the 202627 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling is are required to be performed and selected, the auditor shall independently identify the sample and make that selection personally.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local educational agency pursuant to the test of compliance sample table in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable.
(D)For charter schools that are a component entity of a school district or county office of education, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.
(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.
(B)Charter schools that are a component entity of a school district or county office of education shall report charter school financial data separately from the general fund of the school district or county office of education, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county office of education. The auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment and residency: for nonclassroom-based instruction, verify enrollment and residency of pupils.
(B)Using appropriate sampling techniques, verify pupil enrollment and verify that a pupils residence is located within the jurisdiction of the county in which the chartering authority is located or an adjacent county, based on residency documentation provided by the parent or guardian of the pupil at the time of enrollment.
(C)State in a finding any inappropriately reported enrollment or residency identified.
(5)Chartering authority input: require auditors to consult with and interview the chartering authority for input and information, including a focus on fiscal and compliance areas that the charter school excels in or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: determining if a related entity, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.
(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.
(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.
(B)Verify Verify, for a nonclassroom-based charter school, the calculation of the schools current expense of education, certificated staff salaries and benefits using the documentation provided to the department in the funding determination pursuant to clause (ii) of subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2 and report any discrepancies as a finding.
(C)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratios ratio and calculations required pursuant to Section 51745.6. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio. 51745.6 and report any discrepancies as a finding. For charter schools, verify the pupil-to-teacher ratio and calculations using the documentation provided to the department pursuant to clause (i) of subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2.
(8)Payments: select a sample of all payments and verify that those payments are legal and have proper authorization. The sampling shall include, but not be limited to, payments obtained through credit card statements, debit card statements, other electronic payment methods and media, and bank statements.
(9)Nonclassroom-based charter school network: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school employs teachers who are required to provide instruction to pupils enrolled in nonclassroom-based charter schools other than the charter school holding the teachers employment contract.
(B)Whether the charter school has teachers who are required to provide instruction to pupils who attend another nonclassroom-based charter school.
(C)Whether the charter school is in a network of nonclassroom-based charter schools, as defined in Section 47634.3.
(D)If a determination is made pursuant to subparagraph (A), (B), or (C), identify the other nonclassroom-based charter schools within the network of nonclassroom-based charter schools and report these results to the chartering authority of the charter school and the department.
(10)Funding determination thresholds: for nonclassroom-based charter schools, determine all of the following: following and report any discrepancies:
(A)Whether the charter school submitted a determination of funding request to the state board.
(B)Whether the state board approved the determination of funding request.
(C)Whether the documentation provided to the state board is the same as the calculations in the funding determination audit schedule.(D)(C)Whether the charter school is complying with the thresholds included in the state board approved determination of funding. funding using the documentation provided to the department pursuant to subparagraph (A) of paragraph (3) of subdivision (d) of Section 47634.2.
(c)Commencing with the 202627 202728 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 19.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section shall not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other laws.
SEC. 20.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other law, the auditor conducting an annual audit pursuant to Section 41020 shall, upon request, provide financial and compliance information to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)Information provided by an auditor to the chartering authority, a county superintendent of schools, the Controller, or the Superintendent pursuant to this section shall be submitted simultaneously to the named school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 21.Section 41341 of the Education Code is amended to read:41341.(a)(1)If, during any fiscal year, the amount apportioned to a school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one unit of average daily attendance, the Superintendent, in accordance with regulations that the Superintendent is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Superintendent pursuant this subdivision shall be added to or allowed from any portion of the State School Fund.
(2)Notwithstanding paragraph (1), excesses may be withheld or deficiencies added to apportionments on account of audit exceptions reported in an audit or review, as described in subdivision (e) of Section 41344, or audit or review conducted by a certified public accountant or public accounting firm designated by a governmental agency that provided the local educational agency the opportunity to provide a written response.
(3)If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one or more units of average daily attendance, the school district, county office of education, or charter school shall report the corrected amount to the Superintendent.
(b)If, during any fiscal year, the amount apportioned to a community college district or to any fund from Section B of the State School Fund differs either positively or negatively from the amount to which the community college district or fund was entitled, by an amount equal to the funding of one full-time equivalent student, the Chancellor of the California Community Colleges, in accordance with regulations that the chancellor is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Chancellor of the California Community Colleges under this subdivision shall be added to or allowed from any portion of the State School Fund.
SEC. 22.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other law, a local educational agency shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 23.Section 41372 of the Education Code is amended to read:41372.(a)For purposes of this section, the following definitions apply:
(1)Salaries of classroom teachers and teacher have the same meanings as defined in Section 41011 provided that the cost of all health and welfare benefits provided to the teachers by the school district or charter school are included within the meaning of salaries of classroom teachers.
(2)(A)Current expense of education means the gross total expended (not reduced by estimated income or estimated federal and state apportionments) for the purposes classified in the final budget of a school district or charter school (except one which, during the preceding fiscal year, had less than 101 units of average daily attendance) submitted to and approved by the county superintendent of schools pursuant to Section 42127 or 47604.33, as applicable, for certificated salaries other than certificated salaries for pupil transportation, food services, and community services; classified salaries other than classified salaries for pupil transportation, food services, and community services; employee benefits other than employee benefits for pupil transportation personnel, food services personnel, and community services personnel; books, supplies, and equipment replacement other than for pupil transportation and food services; and community services, contracted services, and other operating expenses other than for pupil transportation, food services, and community services.
(B)Current expense of education does not include expenditures classified as sites, buildings, books, and media and new equipment (object of expenditure 6000 of the California School Accounting Manual), the amount expended from categorical aid received from the federal or state government which funds were granted for expenditures in a program not incurring any teacher salary expenditures or requiring disbursement of the funds without regard to the requirements of this section, or expenditures for facility acquisition and construction, and does not include the amount expended pursuant to any lease agreement for plant and equipment or the amount expended from funds received from the federal government pursuant to the federal Economic Opportunity Act of 1964 or any extension of that act of Congress.
(b)There shall be expended during each fiscal year for payment of salaries of classroom teachers:
(1)By an elementary school district or elementary charter school, 60 percent of the school districts or charter schools current expense of education.
(2)By a high school district or high school charter school, 50 percent of the school districts or charter schools current expense of education.
(3)By a unified school district or charter school serving pupils in kindergarten and grades 1 to 12, inclusive, 55 percent of the school districts or charter schools current expense of education.
(4)By a nonclassroom-based charter school, 40 percent of the charter schools current expense of education.
(c)If the county superintendent of schools having jurisdiction over the school district or charter school determines, on the basis of an audit conducted pursuant to Section 41020, that a school district or charter school has not expended the applicable percentage of current expense of education for the payment of salaries of classroom teachers during the preceding fiscal year, the county superintendent of schools shall, in apportionments made to the school district or charter school from the State School Fund after April 15 of the current fiscal year, designate an amount of this apportionment or apportionments equal to the apparent deficiency in school district or charter school expenditures. Any amount designated by the county superintendent of schools shall be deposited in the county treasury to the credit of the school district or charter school, but shall be unavailable for expenditure by the school district or charter school pending the determination to be made by the county superintendent of schools on any application for exemption that may be submitted to the county superintendent of schools. If it appears to the governing board of a school district or the governing body of a charter school that the application of this section during a fiscal year results in serious hardship to the school district or charter school, or in the payment of salaries of classroom teachers in excess of the salaries of classroom teachers paid by other school districts or charter schools of comparable type and functioning under comparable conditions, the governing board or body may apply to the county superintendent of schools in writing not later than September 15 of the succeeding fiscal year for exemption from the requirements of this section for the fiscal year on account of which the application is made. Upon receipt of this application, the county superintendent of schools shall grant the school district or charter school an exemption for any amount that is less than one thousand dollars ($1,000). If the amount is one thousand dollars ($1,000) or greater, the county superintendent of schools may grant an exemption from the requirements for the fiscal year on account of which the application is made. If the exemption is granted by the county superintendent of schools, the designated moneys shall be immediately available for expenditure by the governing board of the school district or the governing body of the charter school. If no application for exemption is made or exemption is denied, the county superintendent of schools shall order the designated amount or amount not exempted to be added to the amounts to be expended for salaries of classroom teachers during the next fiscal year.
(d)The county superintendent of schools shall enforce the requirements prescribed by this section, and may adopt necessary rules and regulations to that end.
SEC. 24.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares both of the following:
(A)That continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low.
(B)That local educational agencies, state officials, pupils, and guardians have a vested interest in knowing and understanding the capacity of local educational agencies to fill all available and funded teaching assignments with educators who are fully credentialed for the subjects and pupils they are teaching, and a vested interest in understanding the scope of the teacher shortage across the TK/K12 educational system, including, but not limited to, those instances where vacancies cannot be filled, resulting in the use of substitutes, increases in class size, or cancellation of courses or classes.
(2)To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(3)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(4)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions and identifications apply:
(1)(A)An instance of a teacher shortage means an identification by the commission that a course or class assignment is not any of the following:
(i)Permanently filled as of Census Day.
(ii)Filled by a fully credentialed teacher.
(iii)Filled by a teacher who is appropriately assigned.
(B)A fully credentialed teacher means an individual who has completed a teacher preparation program, as defined in subdivision (e) of Section 44225.7, and who holds a valid preliminary or clear credential issued based upon the completion of that teacher preparation program.
(C)An assignment is permanently filled as of Census Day if the educator serving as a teacher has been contracted as of Census Day to provide instruction for either the entire school year or for a one-semester course for the entire semester.
(D)A teacher is appropriately assigned if the teacher holds a credential, permit, or waiver issued by the commission that contains an authorization to legally teach in the setting, in the subject area, and the pupil population associated with the assignment.
(2)An unfilled position shall be identified in each instance where a local educational agency has attempted to fill or is actively trying to fill an open and funded position, but is unable to do so.
(3)A vacant position shall be identified in each instance where, as of Census Day, a course or class assignment has not been permanently filled by a single-designated certificated employee serving for either the entire school year or for a one-semester course for the entire semester. For purposes of identifying an instance of a teacher shortage pursuant to paragraph (3) of subdivision (h), a vacant position shall be limited to an employee serving as a teacher.
(4)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(5)Local educational agency means a school district, county office of education, charter school, or state special school.
(6)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract. For purposes of this section, in a charter school, misassignment shall apply only to employees in teaching positions.
(7)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(8)System, unless the context requires otherwise, means the California Statewide Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Sections 10600 and 60900 for its functioning.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 11495), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and appropriately assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those appropriately assigned and misassigned, at the schoolsite, local educational agency, county, and state levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)(A)Identify instances of a teacher shortage in each instance where, as of Census Day, a course or class assignment is permanently filled by an employee who is not fully credentialed or who is not appropriately assigned, as identified in clauses (i) to (vii), inclusive, below:
(i)Individuals who are fully credentialed teachers and are serving outside their credential area based on holding a valid commission-issued permit authorizing the subject, setting, or pupil population being taught.
(ii)Individuals who are fully credentialed teachers and are serving outside of their credential area pursuant to a statute or Title 5 of the California Code Regulations that allows a local educational agency to otherwise legally assign the individual at the local level.
(iii)Individuals serving on a valid district or university intern credential that authorizes the subject, setting, or pupil population being taught.
(iv)Individuals who are fully credentialed teachers but are teaching a subject, setting, or pupil population not authorized by their credential area, excluding assignments authorized by subdivision (b) of Section 80005 of Title 5 of the California Code of Regulations.
(v)Individuals serving on the basis of a valid permit issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vi)Individuals serving on a short-term or variable-term waiver document issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vii)Individuals who are identified as misassigned by the commission, other than those educators described in clause (iv).
(B)Identify instances of a teacher shortage in each instance where, as of Census Day, a local educational agency identifies a vacant position or an unfilled position.
(4)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county levels.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)This section does not change existing rights or obligations, including, but not limited to, those specified in Sections 33126 and 33315.
(n)A teacher of a course offered offered by a local educational agency in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
SEC. 25.Section 45037 of the Education Code is amended to read:45037.(a)Except as provided in Section 45036, for the fiscal year 200102 and for any fiscal year thereafter in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, the school district, county office of education, or charter school that the person is employed by shall be assessed a penalty that shall be calculated as provided in subdivision (b) and withheld from state funding otherwise due to the school district, county office of education, or charter school.
(1)Notwithstanding Section 46300, the attendance of the noncertificated persons pupils during the period of service shall be included in the computation of average daily attendance.
(2)The noncertificated persons period of service shall not be excluded from the determination of eligibility for instruction time pursuant to Article 8 (commencing with Section 46200) of Chapter 2 of Part 26.
(b)(1)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, add the total number of schooldays on which the person rendered any amount of the service.
(2)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, for a period of service during which the person did not have a valid certification document, add the number of schooldays on which the person rendered any amount of the service without a valid certification document.
(3)Divide the number determined in paragraph (2) by the number determined in paragraph (1) and carry the result to four decimal places.
(4)Multiply a school districts or charter schools local control funding formula grant apportionment for the fiscal year, calculated pursuant to Section 42238.02, as implemented by Section 42238.03, or a county office of educations local control funding formula alternative education grant computed pursuant to Section 2574, as apportioned pursuant to Section 2575, for the fiscal year, for the program in which the noncertificated person rendered service by the number determined in paragraph (3).
(c)Beginning in 200203, if a county office of education releases a warrant in favor of a person for whom a period of school district or charter school service is included in the calculation set forth in paragraph (2) of subdivision (b), and the warrant is either compensation for employment as a teacher or for employment in some other capacity if the county office of education has direct knowledge or is in possession of information giving rise to a reasonable inference that the person is rendering service as a teacher, the county office of education shall be assessed a penalty. The penalty assessed to a county office of education for any fiscal year in which one or more school district or charter school teachers did not have a valid certification document shall be equal to the lesser of three amounts as follows:
(1)Fifty percent of all penalties assessed for that fiscal year to all school districts or charter schools in the county office of educations jurisdiction pursuant to subdivision (b).
(2)One-half percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when two or fewer school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(3)One percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when three or more school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(d)Except as provided in Section 41344.1, nothing in this section may be waived in whole or in part.
SEC. 26.Section 45125.1 of the Education Code is amended to read:45125.1.(a)Any entity that has a contract with a local educational agency shall ensure that any employee who interacts with pupils has a valid criminal records summary as described in Section 44237. When the contracting entity performs the criminal background check, it shall immediately provide any subsequent arrest and conviction information it receives to any local educational agency that it is contracting with pursuant to the subsequent arrest service.
(b)(1)This section does not apply to an entity providing services to a local educational agency, as described in subdivision (a), in an emergency or exceptional situation, such as when pupil health or safety is endangered or when repairs are needed to make school facilities safe and habitable.
(2)Notwithstanding subdivision (a), an employee of any entity that has a contract with a local educational agency, and that offers work experience opportunities for pupils, including, but not limited to, opportunities pursuant to Section 51760, 52336, 52372, 52410, or 52460, Article 1 (commencing with Section 52300), Article 5 (commencing with Section 52381), or Article 7 (commencing with Section 52450) of Chapter 9 of Part 28 of Division 4, Chapter 16.5 (commencing with Section 53070) of Part 28 of Division 4, Article 5 (commencing with Section 54690) of Chapter 9 of Part 29 of Division 4, or Part 54.5 (commencing with Section 88820) of Division 7 of Title 3, or workplace placements as part of a pupils individualized education program, including, but not limited to, the services described in Article 3 (commencing with Section 56470) of Chapter 4.5 of Part 30 of Division 4, is not required to have a valid criminal records summary pursuant to subdivision (a) if all of the following requirements are met:
(A)At least one adult employee in the workplace during the pupils work hours, who has direct contact with the pupil and has been designated by the employer as the employee of record who is responsible for the safety of the pupil, has a valid criminal records summary as described in Section 44237.
(B)A staff representative of the local educational agency makes visitations as specified in a pupils individualized education program, or, if unspecified, at least once every three weeks to consult with the pupils workplace liaison, observe the pupil at the workplace, and check in with the pupil to ensure the pupils health, safety, and welfare, including by addressing any concerns the pupil has raised.
(C)The parent or guardian of the pupil has signed a consent form regarding the pupils work placement, attesting that the parent or guardian understands the duties assigned to the pupil and the nature of the workplace environment.
(3)If a pupil participates in services provided by a contractor as part of an independent study program and the pupil is under the immediate supervision and control of the pupils parent or guardian during the provision of those services, the local educational agency shall do either of the following:
(A)Verify completion of a valid criminal records summary for all employees of the contractor who interact with the pupil.
(B)Ensure that the parent or guardian of the pupil has signed a consent form before the pupils interaction with a person employed by the contractor, attesting that the parent or guardian understands that the person employed by the contractor has not completed a valid criminal records summary as described in Section 44237.
(c)On a case-by-case basis, a local educational agency may require an entity with whom it has a contract to comply with the requirements of this section for employees in addition to those described in subdivision (a). The entity shall prepare and submit those employees fingerprints to the Department of Justice, as described in subdivision (a).
(d)(1)The Department of Justice shall ascertain whether the individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has been arrested or convicted of any crime insofar as that fact can be ascertained from information available to the Department of Justice. Upon implementation of an electronic fingerprinting system with terminals located statewide and managed by the Department of Justice, the Department of Justice shall ascertain the information required pursuant to this section within three working days. When the Department of Justice ascertains that an individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has a pending criminal proceeding for a felony as defined in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1, the Department of Justice shall notify the employer designated by the individual of that fact. The notification shall be delivered by telephone or email to the employer.
(2)The Department of Justice, at its discretion, may notify the local educational agencies in instances when the employee is defined as having a pending criminal proceeding described in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1.
(3)The Department of Justice shall forward one copy of the fingerprints to the Federal Bureau of Investigation to verify any record of previous arrests or convictions of the applicant. The Department of Justice shall review the criminal record summary it obtains from the Federal Bureau of Investigation and shall notify the employer only as to whether or not an applicant has any convictions or arrests pending adjudication for offenses that, if committed in California, would have been punishable as a violent or serious felony. The Department of Justice shall not provide any specific offense information received from the Federal Bureau of Investigation. The Department of Justice shall provide written notification to the contract employer only concerning whether an applicant for employment has any conviction or arrest pending final adjudication for any of those crimes, as specified in Section 45122.1, but shall not provide any information identifying any offense for which an existing employee was convicted or has an arrest pending final adjudication.
(e)(1)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall not permit an employee to interact with pupils until the Department of Justice has ascertained that the employee has not been convicted of a felony as defined in Section 45122.1.
(2)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a felony if the employee has obtained a certificate of rehabilitation and pardon pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
(3)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a serious felony that is not also a violent felony if that employee can prove to the sentencing court of the offense in question, by clear and convincing evidence, that the employee has been rehabilitated for the purposes of schoolsite employment for at least one year. If the offense in question occurred outside this state, then the person may seek a finding of rehabilitation from the court in the local educational agency in which the employee is a resident.
(f)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall certify in writing to the local educational agency that neither the employer nor any of its employees who are required by this section to submit or have their fingerprints submitted to the Department of Justice and who may interact with pupils have been convicted of a felony as defined in Section 45122.1.
(g)Where reasonable access to the statewide electronic fingerprinting network is available, the Department of Justice may mandate electronic submission of the fingerprint cards and other information required by this section.
(h)(1)For purposes of this section, an individual operating as a sole proprietor of an entity that has a contract with a local educational agency, as described in subdivision (a), shall be considered an employee of that entity.
(2)To protect the safety of any pupil that may interact with an employee of an entity that is a sole proprietorship and has a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c), a local educational agency shall prepare and submit the employees fingerprints to the Department of Justice, as described in subdivision (a).
(i)For purposes of this section, local educational agency means a school district, county office of education, or charter school.
SEC. 27.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 28.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)(A)Visit each charter schoolsite, resource center, meeting space, and satellite facility established by the charter school at least annually.
(B)Commencing July 1, 2028, annually attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and review the agendas and minutes of those meetings to monitor actions that may be taken.
(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)(A)Monitor the fiscal condition of each charter school under its authority.
(B)Commencing July 1, 2028, annually monitor payments of each charter school under its authority to verify that the payments are legal and have proper authorization. Monitoring shall include, but not be limited to, a review of credit statements, debit card statements, other electronic payment methods and media, and bank statements.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)A renewal of the charter is granted or denied.
(B)The charter is revoked.
(C)The charter school will cease operation for any reason.
(6)(A)Commencing July 1, 2028, annually verify all of the following for a nonclassroom-based charter school:
(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.
(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.
(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.
(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:
(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.
(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.
(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.
(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.
(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.
(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).
(7)Commencing July 1, 2028, a chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.
(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
SEC. 29.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall revise regulations to require that charter schools report periodic and annual financial data in the same manner and on the same form prescribed for school districts in accordance with all of the following:
(a)Charter schools with an average daily attendance of 5,000 or more pupils and all nonclassroom-based charter schools shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year.
(b)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year.
(c)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.
SEC. 30.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph if it has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership. Charter schools proposed in a school district satisfying one of these conditions shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by both the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers in charter schools shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 31.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(L)Admission policy and procedures, consistent with subdivision (e).
(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 32.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 33.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize, except as provided in subdivision (d). A school district with an average daily attendance of fewer than 10,000 pupils shall not authorize one or more nonclassroom-based charter schools or approve a material revision to expand one or more existing nonclassroom-based charter schools if doing so would result in more than a totality of 100 percent of the average daily attendance of the school district authorizing the charter.
(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)Except as provided in subdivision (d), if the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
(d)(1)Notwithstanding subdivisions (a) and (c), a chartering authority that authorized a nonclassroom-based charter school in operation on or before December 31, 2025, and that exceeds the limits established in subdivision (a), may reauthorize and continue to be the chartering authority for that nonclassroom-based charter school if, as of December 31, 2025, the chartering authority employs at least four full-time equivalent executive-level staff members whose primary responsibilities are related to the following job classifications and areas of employment:
(A)Superintendent.
(B)Chief business official.
(C)Human resources.
(D)Special education.
(E)Curriculum.
(2)Staff members who have the job responsibilities described in subparagraphs (A), (C), (D), and (E) of paragraph (1) shall hold an administrative credential issued by the Commission on Teacher Credentialing, as required by Section 35028.
SEC. 34.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.
(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.
(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall include, but not be limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.
(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:
(1)Acting as the fiscal agent for the program.
(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.
(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.
(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.
(4)Facilitating an annual statewide conference for chartering authorities.
(5)Establishing and facilitating an advisory board, as provided in subdivision (e), to provide input on the development and full implementation of services provided by the program.
(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (e) to measure the programs continual improvement and program fidelity, and to document the programs impact.
(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:
(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.
(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.
(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.
(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.
(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.
(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.
(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:
(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.
(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.
(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.
(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.
(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:
(A)The role and functions of the advisory board.
(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.
(C)The terms of advisory board members.
(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.
(E)Meetings, including the frequency of meetings.
(F)The rules of order.
(G)The process for amending bylaws.
(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:
(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:
(i)Responsibility: the duty to serve the states pupils and the public.
(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.
(iii)Fairness: impartial and just treatment of all stakeholders.
(iv)Knowledge: understanding of charter school law and practice.
(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:
(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.
(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.
(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.
(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.
SEC. 35.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder. The state board shall adopt regulations that apply Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 to charter schools. To the extent that these regulations concern the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)(1)Notwithstanding any other law and except as provided in paragraph (1) of subdivision (e), a charter school that has an approved charter may receive funding for nonclassroom-based instruction only if a determination for funding is made pursuant to Section 47634.2 by the state board. The determination for funding shall be subject to any conditions or limitations the state board may prescribe. The state board shall adopt regulations on or before January 1, 2027, to commence with the 202728 fiscal year, that define and establish general rules governing nonclassroom-based instruction that apply to all charter schools and to the process for determining funding of nonclassroom-based instruction by charter schools offering nonclassroom-based instruction other than the nonclassroom-based instruction authorized by paragraph (1) of subdivision (e). Nonclassroom-based instruction includes, but is not limited to, independent study, home study, workstudy, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(2)Except as provided in paragraph (2) of subdivision (b) of Section 47634.2, a A charter school that receives a determination pursuant to subdivision (b) of Section 47634.2 is not required to reapply annually for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the state board. Notwithstanding any other law, the state board may require a charter school to provide updated information at any time it determines that a review of that information is necessary. The state board may terminate a determination for funding if updated or additional information requested by the state board is not made available to the state board by the charter school within 30 calendar days a reasonable amount of time or if the information otherwise supports termination. A determination for funding pursuant to Section 47634.2 shall not exceed five years.
(3)A charter school that offers nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2 to receive funding each time its charter is renewed or materially revised pursuant to Section 47607. A charter school that materially revises its charter to offer nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2.
(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations pursuant to paragraph (1) of subdivision (d) specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of this part, data collection in the California Longitudinal Pupil Achievement Data System (CALPADS), virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.
(5)Notwithstanding any other law, the state board and the Superintendent shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 36.Section 47612.7 of the Education Code is amended to read:47612.7.(a)Notwithstanding any other law and except as provided in subdivision (b), from January 1, 2020, to December 31, 2025, inclusive, the approval of a petition for the establishment of a new charter school, as defined in paragraph (2) of subdivision (e) of Section 47612.5, is prohibited.
(b)Subdivision (a) shall not apply to a nonclassroom-based charter school that was granted approval of its petition and providing educational services to pupils before October 1, 2019, under either of the following circumstances:
(1)If Assembly Bill 1507 of the 201920 Regular Session amends Section 47605.1 and becomes operative on January 1, 2020, and the charter school is required to submit a petition to the governing board of a school district or county board of education in an adjacent county in which its existing resource center is located in order to comply with Section 47605.1, as amended by Assembly Bill 1507 of the 201920 Regular Session, or to retain current program offerings or enrollment.
(2)If a charter school is required to submit a petition to a school district or county board of education in which a resource center is located in order to comply with the court decision in Anderson Union High School District v. Shasta Secondary Home School (2016) 4 Cal.App.5th 262, or other relevant court ruling, and the petition is necessary to retain current program offerings or enrollment.
(3)A charter school authorized by a different chartering authority pursuant to paragraphs (1) and (2) shall be regarded by the department as a continuing charter school for all purposes to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(c)Notwithstanding Section 33050 or any other law, the state board shall not waive the restrictions described in this section.
(d)(1)No later than October 1, 2023, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall study the processes used to determine funding for nonclassroom-based charter schools.
(2)The study shall identify and make recommendations on potential improvements to the processes, including recommendations for enhancing oversight and reducing fraud, waste, and abuse.
(3)No later than March 1, 2024, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall report to the appropriate fiscal and policy committees of the Legislature, the Department of Finance, the department, and the executive director of the state board on recommendations and observations as a result of the study. These recommendations or observations shall consider the fiscal impact on the state.
(e)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.
SEC. 37.Section 47613.3 is added to the Education Code, to read:47613.3.(a)A charter school shall comply with all of the following:
(1)For purposes of providing direct services to pupils, a charter school shall not expend public funds for a contract with a contractor, unless that contractor complies with both of the following requirements:
(A)The materials, programs, and organizations providing services are nonsectarian.
(B)The funds that would be used to pay for direct services to pupils are not used to pay tuition or fees at a private school.
(2)A charter school shall not offer any financial payments or gifts to a teacher, a pupil or prospective pupil, or to the parent or guardian of a pupil or prospective pupil for enrollment, referral, retention, participation in school meetings or activities, or participation in direct services to pupils by contractors.
(3)The salary and other income paid to an employee by a charter school or an entity managing a charter school, as defined by Section 47604.1, shall not depend on pupil attendance or pupil course completion.
(4)Management services, business services, marketing, and technology contract fees, including, but not limited to, an entity managing a charter school, as defined by Section 47604.1, shall not be calculated as a percentage of the revenue of the charter school, as defined in Section 47613.
(b)The extent of the charter schools compliance with subdivision (a) shall be reviewed and reported as part of the annual, independent financial audit that a charter school is required to transmit by December 15 of each year pursuant to Section 41020.
(c)The Controller shall include the items listed in paragraphs (1) to (4), inclusive, of subdivision (a) in the next revision of the audit guide.
(d)This section does not supersede or invalidate a contract that is in effect at the time this section becomes operative. If a contract is in effect at the time this section becomes operative, the contract shall remain in effect until the parties to the agreement negotiate a successor agreement. A memorandum of understanding shall not extend a contract that is in effect at the time this section becomes operative.
(e)This section shall become operative on July 1, 2026.
SEC. 38.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other provision of law, through the 202526 fiscal year, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, shall be adjusted by the state board.
(2)(A)Notwithstanding any other provision of law, for the 202627 fiscal year and each fiscal year thereafter, a charter school that offers less than 75 percent of the instructional time at the schoolsite and requires the attendance of all pupils for less than 75 percent of the minimum instructional time required to be offered shall have the amount of funding to be allocated on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, adjusted by the state board.(B)A charter school that offers 75 percent or more of the instructional time at the schoolsite and requires the attendance of all pupils for 75 percent or more of the minimum instructional time required to be offered shall not be required to submit a funding determination to the state board and shall receive full funding.(C)(2)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board in accordance with this section.
(b)(1)The state board shall adopt regulations setting forth criteria for the determination of funding for nonclassroom-based instruction and shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the state board shall consider, among other factors it deems appropriate, all of the following:
(A)The amount of the charter schools total budget expended on certificated employee salaries and benefits and on schoolsites.
(B)The current expense of education calculation.(C)(B)The teacher-to-pupil ratio in the school.
(D)One-time state funds and expenses for facilities.(C)One-time local, state, and federal funds.
(D)Expenses for facilities.
(E)Budget reserves.
(F)For charter schools that are part of a network of nonclassroom-based charter schools, the factors identified in subparagraphs (A), (B), and (C), using aggregate data from all charter schools in the network.(2)The state board shall appoint an advisory committee commission to recommend criteria to the state board in accordance with this section if it has not done so by January 1, 2002. The advisory committee commission shall include, but is not limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
(c)Commencing with the 202627 202728 fiscal year, the state boards Advisory Commission on Charter Schools shall recommend to the state board the approval of a funding determination request submitted by a charter school consistent with all of the following:
(1)(A)Approval of the request at 70 percent if both of the following criteria are met: met, unless there is a reasonable basis to recommend otherwise:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 35 percent but less than 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 60 percent but less than 70 percent.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(2)(A)Approval of the request at 85 percent, unless there is a reasonable basis to recommend less, otherwise, if both of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 70 percent but less than 80 percent.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying a percentage that is greater than 70 percent or if the recommended percentage is lower than the requested percentage, the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(3)(A)Approval of the request at 100 percent, unless there is a reasonable basis to recommend less, if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 80 percent.
(iii)The ratio of average daily attendance for independent study pupils to full-time certificated employees responsible for independent study does not exceed a pupil-teacher ratio of 25:1 or the equivalent ratio of pupils to full-time certificated employees for all other educational programs operated by the largest unified school district, as measured by average daily attendance, in the county or counties in which the charter school operates.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(4)(A)Due to the nonclassroom-based instruction not being substantially dedicated to the instructional benefit of the pupils, a denial of the request if one or more both of the following criteria are met: met, unless there is a reasonable basis to recommend otherwise:
(i)The percentage calculated for certificated employee salaries and benefits is less than 35 percent.
(ii)The current expense of education is less than 40 percent.(iii)(ii)The percentage calculated for total expenditures on instruction and related services is less than 60 percent.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying the denial and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(d)Commencing with the 202627 202728 fiscal year, all of the following shall apply:
(1)An approved determination of funding for a new charter school in its first year of operation shall be submitted by December 1 and shall be for two fiscal years. Within 90 days after the end of its first fiscal year of operation, a charter school shall submit unaudited actual expense reports and a funding determination form based on the charter schools actual second-year budget. If the Advisory Commission on Charter Schools determines that the actual expenditures of the charter school or the second-year funding determination form do not support the funding determination for the second year, the Advisory Commission on Charter Schools shall recommend that the state board revise the funding determination.
(2)(A)For charter Charter schools that are part of a network of nonclassroom-based charter schools, a funding determination shall be for one year and shall be based on the aggregate data of all nonclassroom-based charter schools in the network. schools shall apply for a funding determination at the same time in a year determined by the department and shall be considered by the state board at the same hearing. The department shall determine the year based on the furthest funding determination date within the network, but no later than five years after the network is identified. The funding determination for a charter school that is part of a network of nonclassroom-based charter schools shall not exceed three years. If a charter school already has a multiyear funding determination prior to being identified as part of a network, that determination shall be deemed invalid and the network shall submit documentation for a new funding determination.
(B)For nonclassroom-based charter schools that are not part of a network, funding determinations shall be set to align with the duration of the remainder of their charter pursuant to Sections 47605.9, 47607, and 47607.2. Nonclassroom-based charter schools shall apply for a funding determination concurrently with having their charter renewed.(3)(A)Nonclassroom-based charter schools shall submit the financial documentation required for a funding determination to the department on an annual basis in the years between funding determinations. determinations, and the department shall review the documentation, consistent with all of the following:
(i)Documentation for the pupil-to-teacher ratio shall include, for each certificated employee, their Commission on Teacher Credentialing-provided State Teacher Educator Identifier (SEID) as reported in the California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and the calculation of the pupil-to-teacher ratio.
(ii)Documentation for the certificated staff salaries and benefits shall include, for each employee, their Commission on Teacher Credentialing-provided State Teacher Educator Identifier (SEID) as reported in the California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, salary and benefit amounts, percent of time spent on providing direct instruction and instructional support to pupils, indicate whether the certificated employee provides direct instruction or instructional support to pupils at two or more nonclassroom-based charter schools at the direction of their employer, and the calculation of the percent of revenue expended on certificated staff salaries and benefits.
(iii)Documentation for instruction and related services shall include financial records and other supporting records necessary to determine the qualifying expenditures, consistent with the definition of instruction and related services, and the calculation of the percent of revenue expended on instruction and related services.
(B)The Advisory Commission on Charter Schools shall recommend to the state board shall make funding determinations based on a review of aggregate expenditure and revenue information from all years since the prior funding determination was made and shall reduce recommend reducing the funding accordingly.
(4)Data submitted by a charter school as part of its funding determination shall be consistent with its annual independent financial audit pursuant to Section 41020 for the year of the funding determination. If the information in the funding determination form is not consistent with the information reported in its annual independent financial audit, a charter school shall provide clarification and backup documents along with their form. A charter school shall concurrently submit its funding determination form to its chartering authority. The chartering authority shall review the form and notify the department of any concerns with the form, including, but not limited to, discrepancies with the data submitted.(5)(4)Any multiyear funding determination approved by the state board may be modified by the state board, including the terms of the multiyear approval and the funding authorized. The state board may terminate a determination of funding if updated or additional information requested by the department or the advisory committee pursuant to this section is not made available by a charter school within 30 calendar days a reasonable amount of time or if credible information from any source supports termination. If credible information from a source supports termination, the charter school shall have 30 calendar days a reasonable amount of time prior to the termination of funding to provide additional information to support the charter schools determination of funding.
(6)(5)If a charter school is maintaining an unassigned fund balance for economic uncertainties that is 5 percent or less of the charter schools annual expenditures, the Superintendent shall notify the chartering authority of the charter school to investigate whether the charter school has sufficient reserves to address economic uncertainties.
(7)(6)A charter school that is eligible for a funding determination based on the criteria pursuant to subparagraph (A) of paragraph (1) of subdivision (c) shall not may be eligible for an increase in the funding determination based on mitigating circumstances. only if the state board finds a reasonable basis to recommend an increase in accordance with the mitigating circumstances described in paragraph (7). A charter school granted an increase in the funding determination based on mitigating circumstances shall receive a funding determination not to exceed two years.
(7)(A)A reasonable basis for the Advisory Commission on Charter Schools to make a recommendation other than one that results from the criteria described in subdivision (c) includes, but is not limited to, documented data regarding the individual circumstances of the charter school related to the following: one-time, unique, or exceptional expenses for facilities, the acquisition of one or more schoolbuses, the acquisition and installation of computer hardware not related to the instructional program, special education charges levied on the charter school by a local educational agency, or restricted private grants of funds awarded to the charter school that cannot be expended for teacher salaries. The Advisory Commission on Charter Schools may give charter schools that are in their first year of operation serious consideration of full funding.
(B)Documentation for one-time, unique, or exceptional expenses for facilities shall be evidenced by at least one of the following: an approved material revision of the schools charter by their chartering authority to add one or more locations; an approved facility lease, facility purchase agreement, or contracts for architectural services, building construction services, or the like; evidence of plans submitted to a local government for permitting approval; a published request for proposals; or an item approved by the governing body of the charter school declaring the schools intent to lease, acquire, or renovate a facility that includes a detailed project budget and project timeline.
(C)A charter school that applies for a funding determination based on mitigating circumstances related to documented one-time, unique, or exceptional expenses for facilities in two or more consecutive funding periods shall be required to demonstrate substantial progress towards the leasing, purchase, or renovation of that facility in order to receive a greater funding determination level than which they would normally qualify pursuant to the criteria established in subdivision (c).
(D)The Advisory Commission on Charter Schools shall consider a charter schools amount of budget reserves, categories of reserves, and purpose of reserves in determining whether a reasonable basis to make a recommendation other than one that results from the criteria described in subdivision (c) is appropriate.
(e)Commencing with the 202627 202728 fiscal year, charter schools that submit a funding determination request shall adhere to all of the following:
(1)Exclude unspent one-time revenues that are permitted to be spent over multiple fiscal years from the calculations of the percentage of school revenues spent on instruction and related services if the charter school recognizes these revenues and expenditures in the year the funds are actually spent.
(2)May include any funds spent on resource centers or site-based instructional facilities operated by the charter school used primarily for purposes of in-person instruction and pupil support services, including, but not limited to, tutoring, counseling, special education services, libraries, and visual and performing arts facilities. A charter school shall provide the department with supporting documentation related to these costs.
(3)Report the amount and classification of its reserves on funding determination forms consistent with state accounting categories of assigned, unassigned, restricted, committed, and nonspendable.
(4)Exclude from the revenue any the portion of a net increase to the reserve for economic uncertainties that is sufficient to increase the fund balance to 10 percent of the charter schools annual expenditures if the charter school has an unassigned a fund balance that represents less than 10 percent of their annual expenditures. This excluded amount shall not exceed 5 percent of a charter schools total revenue in any one year.
(5)If applicable, explain on the funding determination form the purposes for which unassigned fund balances are being maintained at a level that is 10 percent or more of the charter schools annual expenditures.
(f)This section does not authorize the state board to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) of Section 47612.5.
(g)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction.
(h)Notwithstanding any other provision of law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
(i)For purposes of this section, the following definitions apply:
(1)Current expense of education has the same meaning as defined in subdivision (b) of Section 41372.(2)(1)Network of nonclassroom-based charter schools has the same meaning as defined in subdivision (b) of Section 47634.3.
(3)(2)Nonclassroom-based instruction has the same meaning as defined in paragraph (2) of subdivision (e) of Section 47612.5.
(4)(3)Pupil-teacher ratio has the same meaning as described in Section 51745.6.
(5)(4)Schoolsite has the same meaning as described in paragraph (3) of subdivision (e) of Section 47612.5.
SEC. 39.Section 47634.3 is added to the Education Code, to read:47634.3.(a)Beginning with the 202728 school year, the department shall annually develop a list that identifies networks of nonclassroom-based charter schools, as described in this section, based on data from the prior school year.
(b)For purposes of this section, a network of nonclassroom-based charter schools means two or more nonclassroom-based charter schools, as defined pursuant to paragraph (2) of subdivision (e) of Section 47612.5, that meet one or more of the following:
(1)Employ teachers that teach pupils enrolled at schools other than the charter school holding the teachers employment contract or employ teachers at more than one local educational agency.(2)(1)Have a shared governance or management structure, such as including having supervisors and managers who typically function on a regional multischool level and oversee, evaluate, and control teaching assignments, control class rosters, or discipline teachers across multiple schools.
(3)Have contracts with the same vendor totaling at least 40 percent of the schools annual total revenue.(2)Are under the control of the same corporate or legal entity, or are controlled by legal entities wherein one or more of the corporate directors are appointed or elected by another common entity.
(3)Have two or more nonclassroom-based charter schools that are determined by the Public Employment Relations Board to constitute either a single employer or joint employer.
SEC. 40.Section 51745.6 of the Education Code is amended to read:51745.6.(a)The ratio of average daily attendance for independent study pupils 18 years of age or less to school district, county office of education, or charter school full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall comply with one of the following:
(1)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(2)It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(3)It shall be calculated by using a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio. All pupils of the school district, county office of education, or charter school, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575, for county offices of education, and Section 42238.05, for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 41.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 42.Section 51748 of the Education Code is amended to read:51748.School districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district, charter school, or county board of education by grade level, program placement, and the school in which the pupil is enrolled.
SEC. 43.Section 51749.7 is added to the Education Code, immediately following Section 51749.6, to read:51749.7.(a)A local educational agency shall not allocate, or advertise the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are not provided by a credentialed employee of the local educational agency for the pupil and that are paid for by the local educational agency.
(b)It is the intent of the Legislature that this section does not apply to expanded learning opportunities programs.
SEC. 44.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year.
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts, educational joint powers authorities, county superintendents of schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the generally accepted government auditing standards promulgated by the United States Government Accountability Office. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation or both and includes the verification of each of the following:
(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(C)Teacher misassignments pursuant to Section 44258.9.
(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126.
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14503 of the Education Code is amended to read:14503.(a)Financial and compliance audits shall be performed in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
(b)(1)An independent auditor shall not engage in financial or compliance audits unless, commencing after the first audit, and every three years thereafter, the auditor completes a quality control review conducted by the Controller in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office. The time period between commencement of the second and successive quality control review and completion of a subsequent quality control review shall be calculated from the first day of the month following commencement of the completion of the preceding quality control review.
(2)If an independent auditor has not engaged in financial or compliance audits for three or more consecutive years, the Controller shall conduct a quality control review after the auditor completes the first financial or compliance audit.
SEC. 6.Section 14504 of the Education Code is amended to read:14504.To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors. The Controller shall determine whether audit reports are in conformance with reporting provisions of subdivision (a) of Section 14503 and shall notify each local educational agency, the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. The local educational agency, the chartering authority, the county superintendent of schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
SEC. 7.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a local educational agency was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of the Controllers reviews to the entity that referred the independent auditor to the Controller, the independent auditor, and the local educational agency for which the audit was performed, and shall review the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)In performing quality control reviews, the Controller shall ensure that the selection of audits for each auditor undergoing a quality control review is representative of each type of local educational agency for which an auditor performs audits and shall ensure that reviewers have relevant experience with financial or compliance audits of local educational agencies.
(c)(1)The Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for a local educational agency for the prior three fiscal years if any of the following circumstances exists:
(A)The school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.
(B)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(C)The responsible county superintendent of schools or the Superintendent has otherwise determined that a lack of going concern exists for the school district, educational joint powers authority, or county superintendent of schools pursuant to Sections 1630 and 42127.6.
(2)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(d)The Controller shall conduct a quality control review after an authorized certified public accountant or public accountant listed in the Certified Public Accountants Directory Service (1) completes its first local educational agency financial statement and compliance audit or (2) completes its first local educational agency financial statement and compliance audit after three or more years of not having completed an audit.
(e)The Controller shall conduct a quality control review every three years to ensure that all certified public accountant firms are periodically reviewed.
(f)In any matter that is referred to the California Board of Accountancy under subparagraph (A) of paragraph (1) of subdivision (c), the Controller may suspend the independent auditor from performing any local educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local educational agency under subdivision (c). The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(g)The county superintendent of schools, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local educational agency to the California Board of Accountancy for action described in paragraph (2) of subdivision (c) if any of the following circumstances exists:
(1)An audit of a local educational agency was conducted in a manner that may constitute unprofessional conduct as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
(3)The continuing education and prior experience requirements of Section 41020 are not met.
SEC. 8.Section 14505 of the Education Code is amended to read:14505.(a)The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(1)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(2)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to reporting provisions of subdivision (a) of Section 14503.
(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(c)If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits that are necessary to carry out the Controllers duties and responsibilities pursuant to this code and the Government Code. This chapter does not authorize a local educational agency, or a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out additional audits. To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid unnecessary duplication of audit efforts. In performing additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the local educational agency for the costs of these additional audits.
SEC. 10.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the Superintendent on or before June 30 of each year in order to apprise the Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the Superintendent. Before issuing the report, the Controller shall allow each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting that local educational agency.
SEC. 11.Section 14508 of the Education Code is amended to read:14508.The Controller shall submit a report to the Legislature on or before June 30 of each year regarding any recommendations made to the Superintendent pursuant to Section 14507.
SEC. 12.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (o) of Section 41020.
SEC. 13.Section 17604 of the Education Code is amended to read:17604.(a)Wherever in this code the power to contract is invested in the governing board of the school district, the governing body of a charter school, or any member thereof, the power may, by a majority vote of the governing board or body, be delegated to its district superintendent or charter school administrator, or to any persons that the district superintendent or charter school administrator may designate, or if there is no district superintendent or charter school administrator, then to any other officer or employee of the school district or charter school that the governing board or body may designate. The delegation of power may be limited as to time, money, or subject matter or may be a blanket authorization in advance of its exercise, all as the governing board or body may direct. A contract made pursuant to the delegation and authorization shall not be valid or constitute an enforceable obligation against the school district or charter school unless the same shall have been approved or ratified by the governing board or body, the approval or ratification to be evidenced by a motion of the governing board or body duly passed and adopted.
(b)In the event of malfeasance in office, the school district or charter school official invested by the governing board or body with the power of contract shall be personally liable to the school district or charter school employing the official for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 14.Section 17605 of the Education Code is amended to read:17605.(a)The governing board or body, by majority vote, may adopt a rule, delegating to any officer or employee of the school district or charter school as the governing board or body may designate, the authority to purchase supplies, materials, apparatus, equipment, and services. A rule shall not authorize an officer or employee to make any purchases involving an expenditure by the school district or charter school in excess of the amount specified by Section 20111 of the Public Contract Code. The rule shall prescribe the limits of the delegation as to time, money, and subject matter. All transactions entered into by the officer or employee of the school district or charter school shall be reviewed by the governing board or body every 60 days.(b)In the event of malfeasance in office, the school district or charter school officer or employee invested by the governing board or body with the power to contract shall be personally liable for any and all moneys of the school district or charter school paid out as a result of the malfeasance.SEC. 15.SEC. 14.Section 33309.5 is added to the Education Code, to read:33309.5.(a)The Office of the Education Inspector General is hereby established in the department. The Education Inspector General shall be appointed by the Governor, subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the state board. The state board shall not prevent or prohibit the Education Inspector General from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(b)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising audits and investigations relating to the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(3)Providing a means for keeping the state board and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1, and the necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(c)For purposes of this section, local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SEC. 16.SEC. 15.Section 41020 of the Education Code is amended to read:41020.(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)It is the further intent of the Legislature that all charter schools be audited.
(b)(1)(A)On or before May 1 of each fiscal year, the governing board of each school district or educational joint powers authority shall either provide for an audit of all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the school district or educational joint powers authority to provide for that auditing.
(B)A contract to perform the audit of a school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. Except as provided in clause (ii) of subparagraph (B), an independent audit shall be separately conducted and reported for each charter school that is assigned a County-District-School code.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Notwithstanding subparagraph (A) of paragraph (2), financial data for charter schools that are a component entity of a school district or county office of education shall be presented separately in the applicable audit report as if the financial data of the charter school represents a major fund, and not as a separately conducted and reported audit.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Superintendent to provide for that auditing.
(c)If the governing board of a school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (b) has not provided for an audit of the books and accounts of the local educational agency by April 1, one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Superintendent shall provide for the audit.
(d)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(e)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
(f)Each audit conducted in accordance with this section shall include all of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency.
(2)An audit of pupil attendance procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 or, for a charter school, Section 47606.5.
(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(h)(1)The cost of an audit provided for by a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Superintendent for a county superintendent of schools shall be paid by the Superintendent and the Superintendent shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(4)The cost of an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of a county superintendent of schools shall be paid from the county school service fund.
(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(4)(A)(i)Commencing with the 202627 fiscal year, and every two years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall complete 24 hours of continuing education in governmental accounting, auditing, or related subjects specific to local educational agencies and the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting. The continuing education shall include both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include pupil attendance, independent study, charter schools, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education units taken as part of the California Board of Accountancy licensure requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202627 fiscal year, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall comply with both of the following:
(i)Have certified prior experience conducting financial and compliance audits for local educational agencies.
(ii)Have been peer reviewed by the California Board of Accountancy to ensure that the selection of audits for each auditor undergoing a peer review is representative of each type of local educational agency for which an auditor performs audits and the reviewers have relevant experience with financial or compliance audits of local educational agencies.
(C)The continuing education units and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)Auditors that are under contract with a local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(7)Auditors that conduct audits of local educational agencies shall share work papers and draft audit reports upon request by the local educational agency or a successor auditor of the local educational agency.
(8)A successor auditor of a local educational agency shall request all work papers and draft audit reports in the event that the previous auditor is terminated or otherwise denied for renewal.
(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(k)(1)On or before December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the Superintendent, and the Controller.
(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Upon submission of the final audit report to the governing board of each school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district or educational joint powers authority, the county superintendent of schools shall do all of the following:
(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the school district or educational joint powers authority and request the governing board of the school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction before March 15.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, on or before May 15, that the county superintendent of schools staff has reviewed all audits of school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(4)In the audit of a school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county superintendent of schools and the Superintendent and restate the exception in the audit report. After receiving that notification, the Superintendent shall either consult with the school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before March 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before April 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)If the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before April 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report and shall immediately notify the appropriate chartering authority and the county superintendent of schools of the county in which the charter school is located.
(ii)After receiving notification pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)If the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report and shall immediately notify the Superintendent.
(ii)After receiving notification pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report submitted to a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction before March 15 if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools or chartering authority certifies as of May 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools or chartering authority to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to chartering authorities, the county superintendent of schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(s)Audits of regional occupational centers and programs are subject to this section.
(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accordance with the generally accepted government auditing standards promulgated by the United States General Accountability Office.
SEC. 17.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.(2)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.(b)(1)(A)(i)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.(ii)As applicable pursuant to subdivision (a), the Superintendent may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.(B)Extensions granted pursuant to this subdivision shall be the shortest amount of time reasonable given the extenuating circumstances justifying an extension, shall be in increments no greater than 45 calendar days, and shall not exceed a total of 90 calendar days from the due date established under Section 41020.(2)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may, after consultation with the governing board or body of a local educational agency, the auditors under contract to the local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the local educational agency. The county superintendent of schools, chartering authority, or Superintendent, shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.(3)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent may request the Controllers office to investigate the situation and initiate action as provided in subdivision (c).(c)(1)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may do any of the following:(A)Accept the action of the county superintendent of schools, chartering authority, or Superintendent permitted by subdivision (b).(B)Conduct the audit and prepare the auditors report, utilizing the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.(C)Contract with any qualified certified public accountant or public accountant, utilizing the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the local educational agency.(D)Consistent with the limits described in subparagraph (B) of paragraph (1) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.(2)The Controllers office shall consult with the governing board or body of the local educational agency, the auditors under contract to the local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.(d)Notwithstanding any extension granted under subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under subparagraph (B) or (C) of paragraph (1) of subdivision (c).(e)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than 15 calendar days from the due date established under Section 41020.(f)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.SEC. 16.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If a school district the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools may shall investigate the causes for the delay and initiate one of the following actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner: manner.
(2)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(b)(1)(A)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(1)The county superintendent of schools may,(B)As applicable pursuant to subdivision (a), the Superintendent may, after consultation with the school district governing board county board of education and the auditors under contract to the district, county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office and the Superintendent, office, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline. An
(2)An extension granted pursuant to this subdivision shall be appropriate if the extension adheres to all of the following requirements:
(A)An extension shall be the shortest amount of time reasonable given the extenuating circumstances justifying the extension.
(B)Extensions shall be in increments of no longer than 45 calendar days.
(C)Extensions shall not exceed a total of 90 calendar days from the due date established pursuant to Section 41020.
(2)The(3)As applicable pursuant to subdivision (a), the county superintendent of schools schools, chartering authority, or Superintendent, may, after consultation with the school district governing board, governing board or body of a local educational agency, the auditors under contract to the district, local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the district. local educational agency. The county superintendent of schools schools, chartering authority, or Superintendent, shall, to the extent feasible, assist the district local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(3)The(4)As applicable pursuant to subdivision (a), the county superintendent of schools schools, chartering authority, or Superintendent, may request the Controllers office to investigate the situation and initiate action as provided in subdivision (b). (c).
(b)(c)(1)If the audited financial statements required by Section 41020 have not been filed by a school district or county superintendent of schools local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may do any of the following:
(1)(A)Accept the action of the county superintendent of schools schools, chartering authority, or Superintendent, permitted by subdivision (a). (b).
(2)(B)Conduct the audit and prepare the auditors report, utilizing using the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.
(3)(C)Contract with any qualified certified public accountant or public accountant, utilizing using the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools. local educational agency.
(4)Grant(D)Consistent with the limits described in paragraph (2) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
The(2)The Controllers office shall consult with the district governing board, the county superintendent of schools, and governing board or body of the local educational agency, the auditors under contract to the district or local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the district or county superintendent local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(c)(d)Notwithstanding any extension granted under paragraph (1) of subdivision (a) or paragraph (4) of subdivision (b), subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under paragraph (2) or (3) of subdivision (b). subparagraph (B) or (C) of paragraph (1) of subdivision (c).
(e)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than 15 calendar days from the due date established under Section 41020.
(f)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 18.SEC. 17.Section 41020.3 of the Education Code is amended to read:41020.3.By January 31 of each year, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Sections 35145, 47604, and 47604.1.
SEC. 19.SEC. 18.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by grade, month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study. Monthly enrollment shall be reported as the enrollment recorded on the last day of the school month, as that term is described in Section 37201.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(2)(A)Schedule of pupil attendance: schedule of pupil attendance by grade, month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.
(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.
(5)(A)Schedule of pupil-to-teacher ratio: for independent study programs at a school district, county office of education, or charter school, the schedule of pupil-to-teacher ratio, including, but not limited to, for each employee, their California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and numbers of pupils assigned to that teacher across the teachers assignment.
(B)For a charter school or an entity managing a charter school, as defined in Section 47604.1, that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(C)For independent study programs at school districts, county offices of education, or charter schools, provide a schedule of the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6.
(6)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.
(7)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.
(8)Schedule of expense of education: schedule of the calculation for the schools current expense of education, as defined in Section 41372.
(9)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.
(10)Schedule of funding determination thresholds: for nonclassroom-based charter schools, a schedule of the funding determination process thresholds, including the percent of revenue expended on certificated staff compensation, percent of revenue expended on instruction and related services, and the pupil-to-teacher ratios.
(b)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling is required to be performed and selected, the auditor shall independently identify the sample and make that selection personally.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local educational agency pursuant to the test of compliance sample table in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable.
(D)For charter schools that are a component entity of a school district or county office of education, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.
(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.
(B)Charter schools that are a component entity of a school district or county office of education shall report charter school financial data separately from the general fund of the school district or county office of education, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county office of education. The auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment and residency: for nonclassroom-based instruction, verify enrollment and residency of pupils.
(B)Using appropriate sampling techniques, verify pupil enrollment and verify that a pupils residence is located within the jurisdiction of the county in which the chartering authority is located or an adjacent county, based on residency documentation provided by the parent or guardian of the pupil at the time of enrollment.
(C)State in a finding any inappropriately reported enrollment or residency identified.
(5)Chartering authority input: require auditors to consult with and interview the chartering authority for input and information, including a focus on fiscal and compliance areas that the charter school excels in or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: determining if a related entity, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.
(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.
(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.
(B)Verify the calculation of the schools current expense of education, and report any discrepancies as a finding.
(C)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(8)Payments: select a sample of all payments and verify that those payments are legal and have proper authorization. The sampling shall include, but not be limited to, payments obtained through credit card statements, debit card statements, other electronic payment methods and media, and bank statements.
(9)Nonclassroom-based charter school network: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school employs teachers who are required to provide instruction to pupils enrolled in nonclassroom-based charter schools other than the charter school holding the teachers employment contract.
(B)Whether the charter school has teachers who are required to provide instruction to pupils who attend another nonclassroom-based charter school.
(C)Whether the charter school is in a network of nonclassroom-based charter schools, as defined in Section 47634.3.
(D)If a determination is made pursuant to subparagraph (A), (B), or (C), identify the other nonclassroom-based charter schools and report these results to the chartering authority of the charter school and the department.
(10)Funding determination thresholds: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school submitted a determination of funding request to the state board.
(B)Whether the state board approved the determination of funding request.
(C)Whether the documentation provided to the state board is the same as the calculations in the funding determination audit schedule.
(D)Whether the charter school is complying with the thresholds included in the state board approved determination of funding.
(c)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 20.SEC. 19.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section shall not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other laws.
SEC. 21.SEC. 20.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other law, the auditor conducting an annual audit pursuant to Section 41020 shall, upon request, provide financial and compliance information to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)Information provided by an auditor to the chartering authority, a county superintendent of schools, the Controller, or the Superintendent pursuant to this section shall be submitted simultaneously to the named school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 22.SEC. 21.Section 41341 of the Education Code is amended to read:41341.(a)(1)If, during any fiscal year, the amount apportioned to a school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one unit of average daily attendance, the Superintendent, in accordance with regulations that the Superintendent is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Superintendent pursuant this subdivision shall be added to or allowed from any portion of the State School Fund.
(2)Notwithstanding paragraph (1), excesses may be withheld or deficiencies added to apportionments on account of audit exceptions reported in an audit or review, as described in subdivision (e) of Section 41344, or audit or review conducted by a certified public accountant or public accounting firm designated by a governmental agency that provided the local educational agency the opportunity to provide a written response.
(3)If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one or more units of average daily attendance, the school district, county office of education, or charter school shall report the corrected amount to the Superintendent.
(b)If, during any fiscal year, the amount apportioned to a community college district or to any fund from Section B of the State School Fund differs either positively or negatively from the amount to which the community college district or fund was entitled, by an amount equal to the funding of one full-time equivalent student, the Chancellor of the California Community Colleges, in accordance with regulations that the chancellor is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Chancellor of the California Community Colleges under this subdivision shall be added to or allowed from any portion of the State School Fund.
SEC. 23.SEC. 22.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other law, a local educational agency shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 24.SEC. 23.Section 41372 of the Education Code is amended to read:41372.(a)For purposes of this section, the following definitions apply:
(1)Salaries of classroom teachers and teacher have the same meanings as defined in Section 41011 provided that the cost of all health and welfare benefits provided to the teachers by the school district or charter school are included within the meaning of salaries of classroom teachers.
(2)(A)Current expense of education means the gross total expended (not reduced by estimated income or estimated federal and state apportionments) for the purposes classified in the final budget of a school district or charter school (except one which, during the preceding fiscal year, had less than 101 units of average daily attendance) submitted to and approved by the county superintendent of schools pursuant to Section 42127 or 47604.33, as applicable, for certificated salaries other than certificated salaries for pupil transportation, food services, and community services; classified salaries other than classified salaries for pupil transportation, food services, and community services; employee benefits other than employee benefits for pupil transportation personnel, food services personnel, and community services personnel; books, supplies, and equipment replacement other than for pupil transportation and food services; and community services, contracted services, and other operating expenses other than for pupil transportation, food services, and community services.
(B)Current expense of education does not include expenditures classified as sites, buildings, books, and media and new equipment (object of expenditure 6000 of the California School Accounting Manual), the amount expended from categorical aid received from the federal or state government which funds were granted for expenditures in a program not incurring any teacher salary expenditures or requiring disbursement of the funds without regard to the requirements of this section, or expenditures for facility acquisition and construction, and does not include the amount expended pursuant to any lease agreement for plant and equipment or the amount expended from funds received from the federal government pursuant to the federal Economic Opportunity Act of 1964 or any extension of that act of Congress.
(b)There shall be expended during each fiscal year for payment of salaries of classroom teachers:
(1)By an elementary school district or elementary charter school, 60 percent of the school districts or charter schools current expense of education.
(2)By a high school district or high school charter school, 50 percent of the school districts or charter schools current expense of education.
(3)By a unified school district or charter school serving pupils in grades kindergarten and grades 1 to 12, inclusive, 55 percent of the school districts or charter schools current expense of education.
(4)By a nonclassroom-based charter school, 40 percent of the charter schools current expense of education.
(c)If the county superintendent of schools having jurisdiction over the school district or charter school determines, on the basis of an audit conducted pursuant to Section 41020, that a school district or charter school has not expended the applicable percentage of current expense of education for the payment of salaries of classroom teachers during the preceding fiscal year, the county superintendent of schools shall, in apportionments made to the school district or charter school from the State School Fund after April 15 of the current fiscal year, designate an amount of this apportionment or apportionments equal to the apparent deficiency in school district or charter school expenditures. Any amount designated by the county superintendent of schools shall be deposited in the county treasury to the credit of the school district or charter school, but shall be unavailable for expenditure by the school district or charter school pending the determination to be made by the county superintendent of schools on any application for exemption that may be submitted to the county superintendent of schools. If it appears to the governing board of a school district or the governing body of a charter school that the application of this section during a fiscal year results in serious hardship to the school district or charter school, or in the payment of salaries of classroom teachers in excess of the salaries of classroom teachers paid by other school districts or charter schools of comparable type and functioning under comparable conditions, the governing board or body may apply to the county superintendent of schools in writing not later than September 15 of the succeeding fiscal year for exemption from the requirements of this section for the fiscal year on account of which the application is made. Upon receipt of this application, the county superintendent of schools shall grant the school district or charter school an exemption for any amount that is less than one thousand dollars ($1,000). If the amount is one thousand dollars ($1,000) or greater, the county superintendent of schools may grant an exemption from the requirements for the fiscal year on account of which the application is made. If the exemption is granted by the county superintendent of schools, the designated moneys shall be immediately available for expenditure by the governing board of the school district or the governing body of the charter school. If no application for exemption is made or exemption is denied, the county superintendent of schools shall order the designated amount or amount not exempted to be added to the amounts to be expended for salaries of classroom teachers during the next fiscal year.
(d)The county superintendent of schools shall enforce the requirements prescribed by this section, and may adopt necessary rules and regulations to that end.
SEC. 25.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares that continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low. To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).(2)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.(3)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.(b)For purposes of this section, the following definitions apply:(1)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.(2)Local educational agency means a school district, county office of education, charter school, or state special school.(3)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract.(4)Monitoring authority means:(A)The county office of education for school districts in the county and programs operated by the county office of education.(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.(C)(i)The chartering authority for a charter school.(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.(5)System, unless the context requires otherwise, means the State Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Section 60900 for its functioning.(6)Vacant position means a position to which a single designated certificated employee has not been assigned at the time that the data are collected by the department pursuant to Section 60900.(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and properly assigned educator workforce.(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those properly assigned and misassigned, at the schoolsite, local educational agency, county, and state levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.(3)Support the department to do all of the following:(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county levels.(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.(C)Maintain each years data for no less than five years.(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:(A)The development and current status of the system.(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.(D)Use of local assignment options, delineated by local assignment option and type of school.(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.(m)A teacher of a course offered by a local educational agency in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.SEC. 24.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares both of the following:
(A)That continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low.
(B)That local educational agencies, state officials, pupils, and guardians have a vested interest in knowing and understanding the capacity of local educational agencies to fill all available and funded teaching assignments with educators who are fully credentialed for the subjects and pupils they are teaching, and a vested interest in understanding the scope of the teacher shortage across the TK/K12 educational system, including, but not limited to, those instances where vacancies cannot be filled, resulting in the use of substitutes, increases in class size, or cancellation of courses or classes.
(2)To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state level. levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(3)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(4)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions and identifications apply:
(1)(A)An instance of a teacher shortage means an identification by the commission that a course or class assignment is not any of the following:
(i)Permanently filled as of Census Day.
(ii)Filled by a fully credentialed teacher.
(iii)Filled by a teacher who is appropriately assigned.
(B)A fully credentialed teacher means an individual who has completed a teacher preparation program, as defined in subdivision (e) of Section 44225.7, and who holds a valid preliminary or clear credential issued based upon the completion of that teacher preparation program.
(C)An assignment is permanently filled as of Census Day if the educator serving as a teacher has been contracted as of Census Day to provide instruction for either the entire school year or for a one-semester course for the entire semester.
(D)A teacher is appropriately assigned if the teacher holds a credential, permit, or waiver issued by the commission that contains an authorization to legally teach in the setting, in the subject area, and the pupil population associated with the assignment.
(2)An unfilled position shall be identified in each instance where a local educational agency has attempted to fill or is actively trying to fill an open and funded position, but is unable to do so.
(3)A vacant position shall be identified in each instance where, as of Census Day, a course or class assignment has not been permanently filled by a single-designated certificated employee serving for either the entire school year or for a one-semester course for the entire semester. For purposes of identifying an instance of a teacher shortage pursuant to paragraph (3) of subdivision (h), a vacant position shall be limited to an employee serving as a teacher.
(4)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(5)Local educational agency means a school district, county office of education, charter school, or state special school.
(6)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract. For purposes of this section, in a charter school, misassignment shall apply only to employees in teaching positions.
(7)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(8)System, unless the context requires otherwise, means the California Statewide Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Sections 10600 and 60900 for its functioning.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 11495), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and appropriately assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those appropriately assigned and misassigned, at the schoolsite, local educational agency, county, and state level. levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)(A)Identify instances of a teacher shortage in each instance where, as of Census Day, a course or class assignment is permanently filled by an employee who is not fully credentialed or who is not appropriately assigned, as identified in clauses (i) to (vii), inclusive, below:
(i)Individuals who are fully credentialed teachers and are serving outside their credential area based on holding a valid commission-issued permit authorizing the subject, setting, or pupil population being taught.
(ii)Individuals who are fully credentialed teachers and are serving outside of their credential area pursuant to a statute or Title 5 of the California Code Regulations that allows a local educational agency to otherwise legally assign the individual at the local level.
(iii)Individuals serving on a valid district or university intern credential that authorizes the subject, setting, or pupil population being taught.
(iv)Individuals who are fully credentialed teachers but are teaching a subject, setting, or pupil population not authorized by their credential area, excluding assignments authorized by subdivision (b) of Section 80005 of Title 5 of the California Code of Regulations.
(v)Individuals serving on the basis of a valid permit issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vi)Individuals serving on a short-term or variable-term waiver document issued by the commission that authorizes the subject, setting, or pupil population being taught.
(vii)Individuals who are identified as misassigned by the commission, other than those educators described in clause (iv).
(B)Identify instances of a teacher shortage in each instance where, as of Census Day, a local educational agency identifies a vacant position or an unfilled position.
(4)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county level. levels.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)This section does not change existing rights or obligations, including, but not limited to, those specified in Sections 33126 and 33315.
(n)A teacher of a course offered by a local educational agency in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
SEC. 26.SEC. 25.Section 45037 of the Education Code is amended to read:45037.(a)Except as provided in Section 45036, for the fiscal year 200102 and for any fiscal year thereafter in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, the school district, county office of education, or charter school that the person is employed by shall be assessed a penalty that shall be calculated as provided in subdivision (b) and withheld from state funding otherwise due to the school district, county office of education, or charter school.
(1)Notwithstanding Section 46300, the attendance of the noncertificated persons pupils during the period of service shall be included in the computation of average daily attendance.
(2)The noncertificated persons period of service shall not be excluded from the determination of eligibility for instruction time pursuant to Article 8 (commencing with Section 46200) of Chapter 2 of Part 26.
(b)(1)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, add the total number of schooldays on which the person rendered any amount of the service.
(2)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, for a period of service during which the person did not have a valid certification document, add the number of schooldays on which the person rendered any amount of the service without a valid certification document.
(3)Divide the number determined in paragraph (2) by the number determined in paragraph (1) and carry the result to four decimal places.
(4)Multiply a school districts or charter schools local control funding formula grant apportionment for the fiscal year, calculated pursuant to Section 42238.02, as implemented by Section 42238.03, or a county office of educations local control funding formula alternative education grant computed pursuant to Section 2574, as apportioned pursuant to Section 2575, for the fiscal year, for the program in which the noncertificated person rendered service by the number determined in paragraph (3).
(c)Beginning in 200203, if a county office of education releases a warrant in favor of a person for whom a period of school district or charter school service is included in the calculation set forth in paragraph (2) of subdivision (b), and the warrant is either compensation for employment as a teacher or for employment in some other capacity if the county office of education has direct knowledge or is in possession of information giving rise to a reasonable inference that the person is rendering service as a teacher, the county office of education shall be assessed a penalty. The penalty assessed to a county office of education for any fiscal year in which one or more school district or charter school teachers did not have a valid certification document shall be equal to the lesser of three amounts as follows:
(1)Fifty percent of all penalties assessed for that fiscal year to all school districts or charter schools in the county office of educations jurisdiction pursuant to subdivision (b).
(2)One-half percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when two or fewer school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(3)One percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when three or more school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(d)Except as provided in Section 41344.1, nothing in this section may be waived in whole or in part.
SEC. 27.SEC. 26.Section 45125.1 of the Education Code is amended to read:45125.1.(a)Any entity that has a contract with a local educational agency shall ensure that any employee who interacts with pupils has a valid criminal records summary as described in Section 44237. When the contracting entity performs the criminal background check, it shall immediately provide any subsequent arrest and conviction information it receives to any local educational agency that it is contracting with pursuant to the subsequent arrest service.
(b)(1)This section does not apply to an entity providing services to a local educational agency, as described in subdivision (a), in an emergency or exceptional situation, such as when pupil health or safety is endangered or when repairs are needed to make school facilities safe and habitable.
(2)Notwithstanding subdivision (a), an employee of any entity that has a contract with a local educational agency, and that offers work experience opportunities for pupils, including, but not limited to, opportunities pursuant to Section 51760, 52336, 52372, 52410, or 52460, Article 1 (commencing with Section 52300), Article 5 (commencing with Section 52381), or Article 7 (commencing with Section 52450) of Chapter 9 of Part 28 of Division 4, Chapter 16.5 (commencing with Section 53070) of Part 28 of Division 4, Article 5 (commencing with Section 54690) of Chapter 9 of Part 29 of Division 4, or Part 54.5 (commencing with Section 88820) of Division 7 of Title 3, or workplace placements as part of a pupils individualized education program, including, but not limited to, the services described in Article 3 (commencing with Section 56470) of Chapter 4.5 of Part 30 of Division 4, is not required to have a valid criminal records summary pursuant to subdivision (a) if all of the following requirements are met:
(A)At least one adult employee in the workplace during the pupils work hours, who has direct contact with the pupil and has been designated by the employer as the employee of record who is responsible for the safety of the pupil, has a valid criminal records summary as described in Section 44237.
(B)A staff representative of the local educational agency makes visitations as specified in a pupils individualized education program, or, if unspecified, at least once every three weeks to consult with the pupils workplace liaison, observe the pupil at the workplace, and check in with the pupil to ensure the pupils health, safety, and welfare, including by addressing any concerns the pupil has raised.
(C)The parent or guardian of the pupil has signed a consent form regarding the pupils work placement, attesting that the parent or guardian understands the duties assigned to the pupil and the nature of the workplace environment.
(3)If a pupil participates in services provided by a contractor as part of an independent study program and the pupil is under the immediate supervision and control of the pupils parent or guardian during the provision of those services, the local educational agency shall do either of the following:
(A)Verify completion of a valid criminal records summary for all employees of the contractor who interact with the pupil.
(B)Ensure that the parent or guardian of the pupil has signed a consent form before the pupils interaction with a person employed by the contractor, attesting that the parent or guardian understands that the person employed by the contractor has not completed a valid criminal records summary as described in Section 44237.
(c)On a case-by-case basis, a local educational agency may require an entity with whom it has a contract to comply with the requirements of this section for employees in addition to those described in subdivision (a). The entity shall prepare and submit those employees fingerprints to the Department of Justice, as described in subdivision (a).
(d)(1)The Department of Justice shall ascertain whether the individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has been arrested or convicted of any crime insofar as that fact can be ascertained from information available to the Department of Justice. Upon implementation of an electronic fingerprinting system with terminals located statewide and managed by the Department of Justice, the Department of Justice shall ascertain the information required pursuant to this section within three working days. When the Department of Justice ascertains that an individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has a pending criminal proceeding for a felony as defined in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1, the Department of Justice shall notify the employer designated by the individual of that fact. The notification shall be delivered by telephone or email to the employer.
(2)The Department of Justice, at its discretion, may notify the local educational agencies in instances when the employee is defined as having a pending criminal proceeding described in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1.
(3)The Department of Justice shall forward one copy of the fingerprints to the Federal Bureau of Investigation to verify any record of previous arrests or convictions of the applicant. The Department of Justice shall review the criminal record summary it obtains from the Federal Bureau of Investigation and shall notify the employer only as to whether or not an applicant has any convictions or arrests pending adjudication for offenses that, if committed in California, would have been punishable as a violent or serious felony. The Department of Justice shall not provide any specific offense information received from the Federal Bureau of Investigation. The Department of Justice shall provide written notification to the contract employer only concerning whether an applicant for employment has any conviction or arrest pending final adjudication for any of those crimes, as specified in Section 45122.1, but shall not provide any information identifying any offense for which an existing employee was convicted or has an arrest pending final adjudication.
(e)(1)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall not permit an employee to interact with pupils until the Department of Justice has ascertained that the employee has not been convicted of a felony as defined in Section 45122.1.
(2)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a felony if the employee has obtained a certificate of rehabilitation and pardon pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
(3)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a serious felony that is not also a violent felony if that employee can prove to the sentencing court of the offense in question, by clear and convincing evidence, that the employee has been rehabilitated for the purposes of schoolsite employment for at least one year. If the offense in question occurred outside this state, then the person may seek a finding of rehabilitation from the court in the local educational agency in which the employee is a resident.
(f)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall certify in writing to the local educational agency that neither the employer nor any of its employees who are required by this section to submit or have their fingerprints submitted to the Department of Justice and who may interact with pupils have been convicted of a felony as defined in Section 45122.1.
(g)Where reasonable access to the statewide electronic fingerprinting network is available, the Department of Justice may mandate electronic submission of the fingerprint cards and other information required by this section.
(h)(1)For purposes of this section, an individual operating as a sole proprietor of an entity that has a contract with a local educational agency, as described in subdivision (a), shall be considered an employee of that entity.
(2)To protect the safety of any pupil that may interact with an employee of an entity that is a sole proprietorship and has a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c), a local educational agency shall prepare and submit the employees fingerprints to the Department of Justice, as described in subdivision (a).
(i)For purposes of this section, local educational agency means a school district, county office of education, or charter school.
SEC. 28.SEC. 27.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 29.SEC. 28.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)(A)Visit each charter schoolsite, resource center, meeting space, and satellite facility established by the charter school at least annually.
(B)Commencing July 1, 2028, annually attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and review the agendas and minutes of those meetings to monitor actions that may be taken.
(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)(A)Monitor the fiscal condition of each charter school under its authority.
(B)Commencing July 1, 2028, annually monitor payments of each charter school under its authority to verify that the payments are legal and have proper authorization. Monitoring shall include, but not be limited to, a review of credit statements, debit card statements, other electronic payment methods and media, and bank statements.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)A renewal of the charter is granted or denied.
(B)The charter is revoked.
(C)The charter school will cease operation for any reason.
(6)(A)Commencing July 1, 2028, annually verify all of the following for a nonclassroom-based charter school:
(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.
(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.
(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.
(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:
(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.
(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.
(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.
(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.
(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.
(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).
(7)Commencing July 1, 2028, a chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.
(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
SEC. 30.SEC. 29.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall revise regulations to require that charter schools report periodic and annual financial data in the same manner and on the same form prescribed for school districts in accordance with all of the following:
(a)Charter schools with an average daily attendance of 5,000 or more pupils and all nonclassroom-based charter schools shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year.
(b)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year.
(c)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.
SEC. 31.SEC. 30.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)(A)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph under either of the following conditions:(i)The school district has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership.(ii)For the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district pursuant to subdivision (h) of Section 41326, the school district has exited state receivership and has a qualified interim certification pursuant to Section 42131 or the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving the charter school would result in the school district having a qualified or negative interim certification pursuant to Section 42131.(B)Charter schools proposed in a school district satisfying one of the conditions specified in subparagraph (A) shall be subject to a rebuttable presumption of denial.(8)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph if it has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership. Charter schools proposed in a school district satisfying one of these conditions shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code. contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by both the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers in charter schools shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 32.SEC. 31.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(L)Admission policy and procedures, consistent with subdivision (e).
(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code. contract that would cause the charter school to compensate an individual contractor more than one hundred thousand dollars ($100,000) in a fiscal year.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning certificated teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 33.SEC. 32.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 34.SEC. 33.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize, except as provided in subdivision (d). A school district with an average daily attendance of fewer than 10,000 pupils shall not authorize one or more nonclassroom-based charter schools or approve a material revision to expand one or more existing nonclassroom-based charter schools if doing so would result in more than a totality of 100 percent of the average daily attendance of the school district authorizing the charter.
(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)Except as provided in subdivision (d), if the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
(d)(1)Notwithstanding subdivisions (a) and (c), a chartering authority that authorized a nonclassroom-based charter school in operation on or before December 31, 2025, and that exceeds the limits established in subdivision (a), may reauthorize and continue to be the chartering authority for that nonclassroom-based charter school if, as of December 31, 2025, the chartering authority employs at least four full-time equivalent executive-level staff members whose primary responsibilities are related to the following job classifications and areas of employment:
(A)Superintendent.
(B)Chief business official.
(C)Human resources.
(D)Special education.
(E)Curriculum.
(2)Staff members who have the job responsibilities described in subparagraphs (A), (C), (D), and (E) of paragraph (1) shall hold an administrative credential issued by the Commission on Teacher Credentialing, as required by Section 35028.
SEC. 35.SEC. 34.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.
(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.
(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall include, but not be limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.
(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:
(1)Acting as the fiscal agent for the program.
(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.
(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.
(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.
(4)Facilitating an annual statewide conference for chartering authorities.
(5)Establishing and facilitating an advisory board, as provided in subdivision (e), to provide input on the development and full implementation of services provided by the program.
(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (e) to measure the programs continual improvement and program fidelity, and to document the programs impact.
(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:
(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.
(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.
(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.
(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.
(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.
(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.
(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:
(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.
(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.
(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.
(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.
(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:
(A)The role and functions of the advisory board.
(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.
(C)The terms of advisory board members.
(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.
(E)Meetings, including the frequency of meetings.
(F)The rules of order.
(G)The process for amending bylaws.
(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:
(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:
(i)Responsibility: the duty to serve the states pupils and the public.
(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.
(iii)Fairness: impartial and just treatment of all stakeholders.
(iv)Knowledge: understanding of charter school law and practice.
(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:
(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.
(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.
(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.
(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.
SEC. 36.SEC. 35.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder. The state board shall adopt regulations that apply Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 to charter schools. To the extent that these regulations concern the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)(1)Notwithstanding any other law and except as provided in paragraph (1) of subdivision (e), a charter school that has an approved charter may receive funding for nonclassroom-based instruction only if a determination for funding is made pursuant to Section 47634.2 by the state board. The determination for funding shall be subject to any conditions or limitations the state board may prescribe. The state board shall adopt regulations on or before January 1, 2027, that define and establish general rules governing nonclassroom-based instruction that apply to all charter schools and to the process for determining funding of nonclassroom-based instruction by charter schools offering nonclassroom-based instruction other than the nonclassroom-based instruction authorized by paragraph (1) of subdivision (e). Nonclassroom-based instruction includes, but is not limited to, independent study, home study, workstudy, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(2)Except as provided in paragraph (2) of subdivision (b) of Section 47634.2, a charter school that receives a determination pursuant to subdivision (b) of Section 47634.2 is not required to reapply annually for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the state board. Notwithstanding any other law, the state board may require a charter school to provide updated information at any time it determines that a review of that information is necessary. The state board may terminate a determination for funding if updated or additional information requested by the state board is not made available to the state board by the charter school within 30 calendar days or if the information otherwise supports termination.
(3)A charter school that offers nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2 to receive funding each time its charter is renewed or materially revised pursuant to Section 47607. A charter school that materially revises its charter to offer nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2.
(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations pursuant to paragraph (1) of subdivision (d) specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of this part, virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.
(5)Notwithstanding any other law, the state board and the Superintendent shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 37.SEC. 36.Section 47612.7 of the Education Code is amended to read:47612.7.(a)Notwithstanding any other law and except as provided in subdivision (b), from January 1, 2020, to December 31, 2025, inclusive, the approval of a petition for the establishment of a new charter school, as defined in paragraph (2) of subdivision (e) of Section 47612.5, is prohibited.
(b)Subdivision (a) shall not apply to a nonclassroom-based charter school that was granted approval of its petition and providing educational services to pupils before October 1, 2019, under either of the following circumstances:
(1)If Assembly Bill 1507 of the 201920 Regular Session amends Section 47605.1 and becomes operative on January 1, 2020, and the charter school is required to submit a petition to the governing board of a school district or county board of education in an adjacent county in which its existing resource center is located in order to comply with Section 47605.1, as amended by Assembly Bill 1507 of the 201920 Regular Session, or to retain current program offerings or enrollment.
(2)If a charter school is required to submit a petition to a school district or county board of education in which a resource center is located in order to comply with the court decision in Anderson Union High School District v. Shasta Secondary Home School (2016) 4 Cal.App.5th 262, or other relevant court ruling, and the petition is necessary to retain current program offerings or enrollment.
(3)A charter school authorized by a different chartering authority pursuant to paragraphs (1) and (2) shall be regarded by the department as a continuing charter school for all purposes to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(c)Notwithstanding Section 33050 or any other law, the state board shall not waive the restrictions described in this section.
(d)(1)No later than October 1, 2023, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall study the processes used to determine funding for nonclassroom-based charter schools.
(2)The study shall identify and make recommendations on potential improvements to the processes, including recommendations for enhancing oversight and reducing fraud, waste, and abuse.
(3)No later than March 1, 2024, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall report to the appropriate fiscal and policy committees of the Legislature, the Department of Finance, the department, and the executive director of the state board on recommendations and observations as a result of the study. These recommendations or observations shall consider the fiscal impact on the state.
(e)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.
SEC. 38.SEC. 37.Section 47613.3 is added to the Education Code, to read:47613.3.(a)A charter school shall comply with all of the following:
(1)For purposes of providing direct services to pupils, a charter school shall not expend public funds for a contract with a contractor, unless that contractor complies with both of the following requirements:
(A)The materials, programs, and organizations providing services are nonsectarian.
(B)The funds that would be used to pay for direct services to pupils are not used to pay tuition or fees at a private school.
(2)A charter school shall not offer any financial payments or gifts to a teacher, a pupil or prospective pupil, or to the parent or guardian of a pupil or prospective pupil for enrollment, referral, retention, participation in school meetings or activities, or participation in direct services to pupils by contractors.
(3)The salary and other income paid to an employee by a charter school or an entity managing a charter school, as defined by Section 47604.1, shall not depend on pupil attendance or pupil course completion.
(4)Management services, business services, marketing, and technology contract fees, including, but not limited to, an entity managing a charter school, as defined by Section 47604.1, shall not be calculated as a percentage of the revenue of the charter school, as defined in Section 47613.
(b)The extent of the charter schools compliance with subdivision (a) shall be reviewed and reported as part of the annual, independent financial audit that a charter school is required to transmit by December 15 of each year pursuant to Section 41020.
(c)The Controller shall include the items listed in paragraphs (1) to (4), inclusive, of subdivision (a) in the next revision of the audit guide.
(d)This section does not supersede or invalidate a contract that is in effect at the time this section becomes operative. If a contract is in effect at the time this section becomes operative, the contract shall remain in effect until the parties to the agreement negotiate a successor agreement. A memorandum of understanding shall not extend a contract that is in effect at the time this section becomes operative.
(e)This section shall become operative on July 1, 2026.
SEC. 39.SEC. 38.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other provision of law, through the 202526 fiscal year, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, shall be adjusted by the state board.
(2)(A)Notwithstanding any other provision of law, for the 202627 fiscal year and each fiscal year thereafter, a charter school that offers less than 75 percent of the instructional time at the schoolsite and requires the attendance of all pupils for less than 75 percent of the minimum instructional time required to be offered shall have the amount of funding to be allocated on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, adjusted by the state board.
(B)A charter school that offers 75 percent or more of the instructional time at the schoolsite and requires the attendance of all pupils for 75 percent or more of the minimum instructional time required to be offered shall not be required to submit a funding determination to the state board and shall receive full funding.
(C)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board in accordance with this section.
(b)(1)The state board shall adopt regulations setting forth criteria for the determination of funding for nonclassroom-based instruction and shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the state board shall consider, among other factors it deems appropriate, all of the following:
(A)The amount of the charter schools total budget expended on certificated employee salaries and benefits and on schoolsites.
(B)The current expense of education calculation.
(C)The teacher-to-pupil ratio in the school.
(D)One-time state funds and expenses for facilities.
(E)Budget reserves.
(F)For charter schools that are part of a network of nonclassroom-based charter schools, the factors identified in subparagraphs (A), (B), and (C), using aggregate data from all charter schools in the network.
(2)The state board shall appoint an advisory committee to recommend criteria to the state board in accordance with this section if it has not done so by January 1, 2002. The advisory committee shall include, but is not limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
(c)Commencing with the 202627 fiscal year, the state boards Advisory Commission on Charter Schools shall recommend to the state board the approval of a funding determination request submitted by a charter school consistent with all of the following:
(1)(A)Approval of the request at 70 percent if both of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 35 percent but less than 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 60 percent but less than 70 percent.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(2)(A)Approval of the request at 85 percent, unless there is a reasonable basis to recommend less, if both of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 70 percent but less than 80 percent.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying a percentage that is greater than 70 percent or if the recommended percentage is lower than the requested percentage, the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(3)(A)Approval of the request at 100 percent, unless there is a reasonable basis to recommend less, if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 80 percent.
(iii)The ratio of average daily attendance for independent study pupils to full-time certificated employees responsible for independent study does not exceed a pupil-teacher ratio of 25:1 or the equivalent ratio of pupils to full-time certificated employees for all other educational programs operated by the largest unified school district, as measured by average daily attendance, in the county or counties in which the charter school operates.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(4)(A)Due to the nonclassroom-based instruction not being substantially dedicated to the instructional benefit of the pupils, a denial of the request if one or more of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits is less than 35 percent.
(ii)The current expense of education is less than 40 percent.
(iii)The percentage calculated for total expenditures on instruction and related services is less than 60 percent.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying the denial and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(d)Commencing with the 202627 fiscal year, all of the following shall apply:
(1)An approved determination of funding for a new charter school in its first year of operation shall be submitted by December 1 and shall be for two fiscal years. Within 90 days after the end of its first fiscal year of operation, a charter school shall submit unaudited actual expense reports and a funding determination form based on the charter schools actual second-year budget. If the Advisory Commission on Charter Schools determines that the actual expenditures of the charter school or the second-year funding determination form do not support the funding determination for the second year, the Advisory Commission on Charter Schools shall recommend that the state board revise the funding determination.
(2)(A)For charter schools that are part of a network of nonclassroom-based charter schools, a funding determination shall be for one year and shall be based on the aggregate data of all nonclassroom-based charter schools in the network. If a charter school already has a multiyear funding determination prior to being identified as part of a network, that determination shall be deemed invalid and the network shall submit documentation for a new funding determination.
(B)For nonclassroom-based charter schools that are not part of a network, funding determinations shall be set to align with the duration of the remainder of their charter pursuant to Sections 47605.9, 47607, and 47607.2. Nonclassroom-based charter schools shall apply for a funding determination concurrently with having their charter renewed.
(3)(A)Nonclassroom-based charter schools shall submit the financial documentation required for a funding determination to the department on an annual basis in the years between funding determinations.
(B)The state board shall make funding determinations based on a review of aggregate expenditure and revenue information from all years since the prior funding determination was made and shall reduce the funding accordingly.
(4)Data submitted by a charter school as part of its funding determination shall be consistent with its annual independent financial audit pursuant to Section 41020 for the year of the funding determination. If the information in the funding determination form is not consistent with the information reported in its annual independent financial audit, a charter school shall provide clarification and backup documents along with their form. A charter school shall concurrently submit its funding determination form to its chartering authority. The chartering authority shall review the form and notify the department of any concerns with the form, including, but not limited to, discrepancies with the data submitted.
(5)Any multiyear funding determination approved by the state board may be modified by the state board, including the terms of the multiyear approval and the funding authorized. The state board may terminate a determination of funding if updated or additional information requested by the department or the advisory committee pursuant to this section is not made available by a charter school within 30 calendar days or if credible information from any source supports termination. If credible information from a source supports termination, the charter school shall have 30 calendar days prior to the termination of funding to provide additional information to support the charter schools determination of funding.
(6)If a charter school is maintaining an unassigned fund balance for economic uncertainties that is 5 percent or less of the charter schools annual expenditures, the Superintendent shall notify the chartering authority of the charter school to investigate whether the charter school has sufficient reserves to address economic uncertainties.
(7)A charter school that is eligible for a funding determination based on the criteria pursuant to subparagraph (A) of paragraph (1) of subdivision (c) shall not be eligible for an increase in the funding determination based on mitigating circumstances.
(e)Commencing with the 202627 fiscal year, charter schools that submit a funding determination request shall adhere to all of the following:
(1)Exclude unspent one-time revenues that are permitted to be spent over multiple fiscal years from the calculations of the percentage of school revenues spent on instruction and related services if the charter school recognizes these revenues and expenditures in the year the funds are actually spent.
(2)May include any funds spent on resource centers or site-based instructional facilities operated by the charter school used primarily for purposes of in-person instruction and pupil support services, including, but not limited to, tutoring, counseling, special education services, libraries, and visual and performing arts facilities. A charter school shall provide the department with supporting documentation related to these costs.
(3)Report the amount and classification of its reserves on funding determination forms consistent with state accounting categories of assigned, unassigned, restricted, committed, and nonspendable.
(4)Exclude from the revenue any net increase to the reserve for economic uncertainties if the charter school has an unassigned fund balance that represents less than 10 percent of their annual expenditures.
(5)If applicable, explain on the funding determination form the purposes for which unassigned fund balances are being maintained at a level that is 10 percent or more of the charter schools annual expenditures.
(f)This section does not authorize the state board to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) of Section 47612.5.
(g)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction.
(h)Notwithstanding any other provision of law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
(i)For purposes of this section, the following definitions apply:
(1)Current expense of education has the same meaning as defined in subdivision (b) of Section 41372.
(2)Network of nonclassroom-based charter schools has the same meaning as defined in subdivision (b) of Section 47634.3.
(3)Nonclassroom-based instruction has the same meaning as defined in paragraph (2) of subdivision (e) of Section 47612.5.
(4)Pupil-teacher ratio has the same meaning as described in Section 51745.6.
(5)Schoolsite has the same meaning as described in paragraph (3) of subdivision (e) of Section 47612.5.
SEC. 40.SEC. 39.Section 47634.3 is added to the Education Code, to read:47634.3.(a)Beginning with the 202728 school year, the department shall annually develop a list that identifies networks of nonclassroom-based charter schools, as described in this section, based on data from the prior school year.
(b)For purposes of this section, a network of nonclassroom-based charter schools means two or more nonclassroom-based charter schools, as defined pursuant to paragraph (2) of subdivision (e) of Section 47612.5, that meet one or more of the following:
(1)Employ teachers that teach pupils enrolled at schools other than the charter school holding the teachers employment contract or employ teachers at more than one local educational agency.
(2)Have a shared management structure, such as having supervisors and managers who typically function on a regional multischool level and oversee, evaluate, and discipline teachers across multiple schools.
(3)Have contracts with the same vendor totaling at least 40 percent of the schools annual total revenue.
SEC. 41.SEC. 40.Section 51745.6 of the Education Code is amended to read:51745.6.(a)The ratio of average daily attendance for independent study pupils 18 years of age or less to school district, county office of education, or charter school full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall comply with one of the following:
(1)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(2)It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(3)It shall be calculated by using a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio. All pupils of the school district, county office of education, or charter school, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575, for county offices of education, and Section 42238.05, for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 42.SEC. 41.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 43.SEC. 42.Section 51748 of the Education Code is amended to read:51748.School districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district, charter school, or county board of education by grade level, program placement, and the school in which the pupil is enrolled.
SEC. 44.SEC. 43.Section 51749.7 is added to the Education Code, immediately following Section 51749.6, to read:51749.7.(a)A local educational agency shall not allocate, or advertise the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are not provided by a credentialed employee of the local educational agency for the pupil and that are paid for by the local educational agency.
(b)It is the intent of the Legislature that this section does not apply to expanded learning opportunities programs.
SEC. 45.Section 60119 of the Education Code is amended to read:60119.(a)In order to be eligible to receive funds available for purposes of this article, the governing board of a school district or the governing body of a charter school shall take the following actions:(1)(A)The governing board of a school district or the governing body of a charter school shall hold a public hearing or hearings at which the governing board or body shall encourage participation by parents, teachers, members of the community interested in the affairs of the school district or charter school, and bargaining unit leaders, and shall make a determination, through a resolution, as to whether each pupil in each school in the school district or charter school has sufficient textbooks or instructional materials, or both, that are aligned to the content standards adopted by the state board in each of the following subjects, as appropriate, that are consistent with the content and cycles of the curriculum framework adopted by the state board:(i)Mathematics.(ii)Science.(iii)History-social science.(iv)English language arts, including the English language development component of an adopted program.(B)The public hearing shall take place on or before the end of the eighth week from the first day pupils attend school for that year. A school district or charter school that operates schools on a multitrack, year-round calendar shall hold the hearing on or before the end of the eighth week from the first day pupils attend school for that year on any tracks that begin a school year in August or September.(C)As part of the hearing required pursuant to this section, the governing board of a school district or the governing body of a charter school also shall make a written determination as to whether each pupil enrolled in a world language or health course has sufficient textbooks or instructional materials that are consistent with the content and cycles of the curriculum frameworks adopted by the state board for those subjects. The governing board of a school district or the governing body of a charter school also shall determine the availability of laboratory science equipment as applicable to science laboratory courses offered in grades 9 to 12, inclusive. The provision of the textbooks, instructional materials, or science equipment specified in this subparagraph is not a condition of receipt of funds provided by this subdivision.(2)(A)If the governing board of a school district or the governing body of a charter school determines that there are insufficient textbooks or instructional materials, or both, the governing board or body shall provide information to classroom teachers and to the public setting forth, in the resolution, for each school in which an insufficiency exists, the percentage of pupils who lack sufficient standards-aligned textbooks or instructional materials in each subject area and the reasons that each pupil does not have sufficient textbooks or instructional materials, or both, and take any action, except an action that would require reimbursement by the Commission on State Mandates, to ensure that each pupil has sufficient textbooks or instructional materials, or both, within two months of the beginning of the school year in which the determination is made. The governing board or body shall submit a copy of the resolution to the county superintendent of schools no later than three business days after the governing board or body hearing.(B)In carrying out subparagraph (A), the governing board of a school district or the governing body of a charter school may use moneys in any of the following funds:(i)Any funds available for textbooks or instructional materials, or both, from categorical programs, including any funds allocated to school districts or charter schools that have been appropriated in the annual Budget Act.(ii)Any funds of the school district or charter school that are in excess of the amount available for each pupil during the prior fiscal year to purchase textbooks or instructional materials, or both.(iii)Any other funds available to the school district or charter school for textbooks or instructional materials, or both.(b)The governing board of a school district or the governing body of a charter school shall provide 10 days notice of the public hearing or hearings set forth in subdivision (a). The notice shall contain the time, place, and purpose of the hearing and shall be posted in three public places in the school district or charter school. The hearing shall be held at a time that will encourage the attendance of teachers and parents and guardians of pupils who attend the schools in the school district or charter school and shall not take place during or immediately following school hours.(c)(1)For purposes of this section, sufficient textbooks or instructional materials means that each pupil, including English learners, has a standards-aligned textbook or instructional materials, or both, to use in class and to take home. This paragraph does not require two sets of textbooks or instructional materials for each pupil. The materials may be in a digital format as long as each pupil, at a minimum, has and can access the same materials in the class and to take home, as all other pupils in the same class or course in the school district or charter school and has the ability to use and access them at home.(2)Sufficient textbooks or instructional materials as defined in paragraph (1) do not include photocopied sheets from only a portion of a textbook or instructional materials copied to address a shortage.(d)The governing board of a school district or the governing body of a charter school that receives funds for instructional materials from any state source is subject to the requirements of this section.(e)For the purpose of transitioning to instructional materials that are aligned with the common core academic content standards and science content standards, it is the intent of the Legislature that textbooks, instructional materials, and supplemental instructional materials be deemed to be aligned with the content standards pursuant to subdivisions (a) and (c), and be deemed consistent with the content and cycles of the curriculum framework adopted by the state board pursuant to subdivision (a) if the textbooks, instructional materials, supplemental instructional materials, or a combination of any such materials are aligned to the content standards adopted pursuant to Section 60605 or 60605.8, or former Section 60605.85, as that section read on June 30, 2014.SEC. 46.Section 20110 of the Public Contract Code is amended to read:20110.(a)The provisions of this part shall apply to contracts awarded by school districts subject to Part 21 (commencing with Section 35000) of Division 3 of Title 2 of the Education Code.(b)(1)This article shall also apply to contracts awarded by a charter school established pursuant to Part 26.8 (commencing with Section 47600) of Division 4 of Title 2 of the Education Code.(2)For purposes of this article, a charter school shall be deemed a school district and the governing body of a charter school shall be deemed the governing board of a school district, and a reference to a school district or the governing board of a school district shall be deemed to also reference a charter school or the governing body of a charter school, as applicable.SEC. 47.SEC. 44.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year.
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts, educational joint powers authorities, county superintendents of schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the generally accepted government auditing standards promulgated by the United States Government Accountability Office. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation or both and includes the verification of each of the following:
(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(C)Teacher misassignments pursuant to Section 44258.9.
(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126.
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14503 of the Education Code is amended to read:14503.(a)Financial and compliance audits shall be performed in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
(b)(1)An independent auditor shall not engage in financial or compliance audits unless, commencing after the first audit, and every three years thereafter, the auditor completes a quality control review conducted by the Controller in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office. The time period between commencement of the second and successive quality control review and completion of a subsequent quality control review shall be calculated from the first day of the month following commencement of the completion of the preceding quality control review.
(2)If an independent auditor has not engaged in financial or compliance audits for three or more consecutive years, the Controller shall conduct a quality control review after the auditor completes the first financial or compliance audit.
SEC. 6.Section 14504 of the Education Code is amended to read:14504.To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors. The Controller shall determine whether audit reports are in conformance with reporting provisions of subdivision (a) of Section 14503 and shall notify each local educational agency, the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. The local educational agency, the chartering authority, the county superintendent of schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
SEC. 7.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a local educational agency was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of the Controllers reviews to the entity that referred the independent auditor to the Controller, the independent auditor, and the local educational agency for which the audit was performed, and shall review the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)In performing quality control reviews, the Controller shall ensure that the selection of audits for each auditor undergoing a quality control review is representative of each type of local educational agency for which an auditor performs audits and shall ensure that reviewers have relevant experience with financial or compliance audits of local educational agencies.
(c)(1)The Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for a local educational agency for the prior three fiscal years if any of the following circumstances exists:
(A)The school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.
(B)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(C)The responsible county superintendent of schools or the Superintendent has otherwise determined that a lack of going concern exists for the school district, educational joint powers authority, or county superintendent of schools pursuant to Sections 1630 and 42127.6.
(2)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(d)The Controller shall conduct a quality control review after an authorized certified public accountant or public accountant listed in the Certified Public Accountants Directory Service (1) completes its first local educational agency financial statement and compliance audit or (2) completes its first local educational agency financial statement and compliance audit after three or more years of not having completed an audit.
(e)The Controller shall conduct a quality control review every three years to ensure that all certified public accountant firms are periodically reviewed.
(f)In any matter that is referred to the California Board of Accountancy under subparagraph (A) of paragraph (1) of subdivision (c), the Controller may suspend the independent auditor from performing any local educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local educational agency under subdivision (c). The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(g)The county superintendent of schools, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local educational agency to the California Board of Accountancy for action described in paragraph (2) of subdivision (c) if any of the following circumstances exists:
(1)An audit of a local educational agency was conducted in a manner that may constitute unprofessional conduct as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
(3)The continuing education and prior experience requirements of Section 41020 are not met.
SEC. 8.Section 14505 of the Education Code is amended to read:14505.(a)The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(1)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(2)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to reporting provisions of subdivision (a) of Section 14503.
(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(c)If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits that are necessary to carry out the Controllers duties and responsibilities pursuant to this code and the Government Code. This chapter does not authorize a local educational agency, or a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out additional audits. To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid unnecessary duplication of audit efforts. In performing additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the local educational agency for the costs of these additional audits.
SEC. 10.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the Superintendent on or before June 30 of each year in order to apprise the Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the Superintendent. Before issuing the report, the Controller shall allow each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting that local educational agency.
SEC. 11.Section 14508 of the Education Code is amended to read:14508.The Controller shall submit a report to the Legislature on or before June 30 of each year regarding any recommendations made to the Superintendent pursuant to Section 14507.
SEC. 12.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (o) of Section 41020.
SEC. 13.Section 17604 of the Education Code is amended to read:17604.(a)Wherever in this code the power to contract is invested in the governing board of the school district, the governing body of a charter school, or any member thereof, the power may, by a majority vote of the governing board or body, be delegated to its district superintendent or charter school administrator, or to any persons that the district superintendent or charter school administrator may designate, or if there is no district superintendent or charter school administrator, then to any other officer or employee of the school district or charter school that the governing board or body may designate. The delegation of power may be limited as to time, money, or subject matter or may be a blanket authorization in advance of its exercise, all as the governing board or body may direct. A contract made pursuant to the delegation and authorization shall not be valid or constitute an enforceable obligation against the school district or charter school unless the same shall have been approved or ratified by the governing board or body, the approval or ratification to be evidenced by a motion of the governing board or body duly passed and adopted.
(b)In the event of malfeasance in office, the school district or charter school official invested by the governing board or body with the power of contract shall be personally liable to the school district or charter school employing the official for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 14.Section 17605 of the Education Code is amended to read:17605.(a)The governing board or body, by majority vote, may adopt a rule, delegating to any officer or employee of the school district or charter school as the governing board or body may designate, the authority to purchase supplies, materials, apparatus, equipment, and services. A rule shall not authorize an officer or employee to make any purchases involving an expenditure by the school district or charter school in excess of the amount specified by Section 20111 of the Public Contract Code. The rule shall prescribe the limits of the delegation as to time, money, and subject matter. All transactions entered into by the officer or employee of the school district or charter school shall be reviewed by the governing board or body every 60 days.
(b)In the event of malfeasance in office, the school district or charter school officer or employee invested by the governing board or body with the power to contract shall be personally liable for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 15.Section 33309.5 is added to the Education Code, to read:33309.5.(a)The Office of the Education Inspector General is hereby established in the department. The Education Inspector General shall be appointed by the Governor, subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the state board. The state board shall not prevent or prohibit the Education Inspector General from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(b)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising audits and investigations relating to the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(3)Providing a means for keeping the state board and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1, and the necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(c)For purposes of this section, local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SEC. 16.Section 41020 of the Education Code is amended to read:41020.(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)It is the further intent of the Legislature that all charter schools be audited.
(b)(1)(A)On or before May 1 of each fiscal year, the governing board of each school district or educational joint powers authority shall either provide for an audit of all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the school district or educational joint powers authority to provide for that auditing.
(B)A contract to perform the audit of a school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. Except as provided in clause (ii) of subparagraph (B), an independent audit shall be separately conducted and reported for each charter school that is assigned a County-District-School code.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Notwithstanding subparagraph (A) of paragraph (2), financial data for charter schools that are a component entity of a school district or county office of education shall be presented separately in the applicable audit report as if the financial data of the charter school represents a major fund, and not as a separately conducted and reported audit.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Superintendent to provide for that auditing.
(c)If the governing board of a school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (b) has not provided for an audit of the books and accounts of the local educational agency by April 1, one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Superintendent shall provide for the audit.
(d)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(e)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
(f)Each audit conducted in accordance with this section shall include all of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency.
(2)An audit of pupil attendance procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 or, for a charter school, Section 47606.5.
(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(h)(1)The cost of an audit provided for by a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Superintendent for a county superintendent of schools shall be paid by the Superintendent and the Superintendent shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(4)The cost of an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of a county superintendent of schools shall be paid from the county school service fund.
(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(4)(A)(i)Commencing with the 202627 fiscal year, and every two years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall complete 24 hours of continuing education in governmental accounting, auditing, or related subjects specific to local educational agencies and the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting. The continuing education shall include both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include pupil attendance, independent study, charter schools, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education units taken as part of the California Board of Accountancy licensure requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202627 fiscal year, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall comply with both of the following:
(i)Have certified prior experience conducting financial and compliance audits for local educational agencies.
(ii)Have been peer reviewed by the California Board of Accountancy to ensure that the selection of audits for each auditor undergoing a peer review is representative of each type of local educational agency for which an auditor performs audits and the reviewers have relevant experience with financial or compliance audits of local educational agencies.
(C)The continuing education units and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)Auditors that are under contract with a local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(7)Auditors that conduct audits of local educational agencies shall share work papers and draft audit reports upon request by the local educational agency or a successor auditor of the local educational agency.
(8)A successor auditor of a local educational agency shall request all work papers and draft audit reports in the event that the previous auditor is terminated or otherwise denied for renewal.
(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(k)(1)On or before December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the Superintendent, and the Controller.
(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Upon submission of the final audit report to the governing board of each school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district or educational joint powers authority, the county superintendent of schools shall do all of the following:
(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the school district or educational joint powers authority and request the governing board of the school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction before March 15.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, on or before May 15, that the county superintendent of schools staff has reviewed all audits of school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(4)In the audit of a school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county superintendent of schools and the Superintendent and restate the exception in the audit report. After receiving that notification, the Superintendent shall either consult with the school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before March 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before April 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)If the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before April 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report and shall immediately notify the appropriate chartering authority and the county superintendent of schools of the county in which the charter school is located.
(ii)After receiving notification pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)If the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report and shall immediately notify the Superintendent.
(ii)After receiving notification pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report submitted to a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction before March 15 if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools or chartering authority certifies as of May 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools or chartering authority to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to chartering authorities, the county superintendent of schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(s)Audits of regional occupational centers and programs are subject to this section.
(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accordance with the generally accepted government auditing standards promulgated by the United States General Accountability Office.
SEC. 17.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(2)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(b)(1)(A)(i)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(ii)As applicable pursuant to subdivision (a), the Superintendent may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(B)Extensions granted pursuant to this subdivision shall be the shortest amount of time reasonable given the extenuating circumstances justifying an extension, shall be in increments no greater than 45 calendar days, and shall not exceed a total of 90 calendar days from the due date established under Section 41020.
(2)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may, after consultation with the governing board or body of a local educational agency, the auditors under contract to the local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the local educational agency. The county superintendent of schools, chartering authority, or Superintendent, shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(3)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent may request the Controllers office to investigate the situation and initiate action as provided in subdivision (c).
(c)(1)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may do any of the following:
(A)Accept the action of the county superintendent of schools, chartering authority, or Superintendent permitted by subdivision (b).
(B)Conduct the audit and prepare the auditors report, utilizing the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.
(C)Contract with any qualified certified public accountant or public accountant, utilizing the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the local educational agency.
(D)Consistent with the limits described in subparagraph (B) of paragraph (1) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)The Controllers office shall consult with the governing board or body of the local educational agency, the auditors under contract to the local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(d)Notwithstanding any extension granted under subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under subparagraph (B) or (C) of paragraph (1) of subdivision (c).
(e)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than 15 calendar days from the due date established under Section 41020.
(f)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 18.Section 41020.3 of the Education Code is amended to read:41020.3.By January 31 of each year, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Sections 35145, 47604, and 47604.1.
SEC. 19.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by grade, month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study. Monthly enrollment shall be reported as the enrollment recorded on the last day of the school month, as that term is described in Section 37201.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(2)(A)Schedule of pupil attendance: schedule of pupil attendance by grade, month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.
(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.
(5)(A)Schedule of pupil-to-teacher ratio: for independent study programs at a school district, county office of education, or charter school, the schedule of pupil-to-teacher ratio, including, but not limited to, for each employee, their California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and numbers of pupils assigned to that teacher across the teachers assignment.
(B)For a charter school or an entity managing a charter school, as defined in Section 47604.1, that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(C)For independent study programs at school districts, county offices of education, or charter schools, provide a schedule of the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6.
(6)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.
(7)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.
(8)Schedule of expense of education: schedule of the calculation for the schools current expense of education, as defined in Section 41372.
(9)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.
(10)Schedule of funding determination thresholds: for nonclassroom-based charter schools, a schedule of the funding determination process thresholds, including the percent of revenue expended on certificated staff compensation, percent of revenue expended on instruction and related services, and the pupil-to-teacher ratios, and the percent of unduplicated pupils enrolled compared to the counties served by the charter school. ratios.
(b)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling is required to be performed and selected, the auditor shall independently identify the sample and make that selection personally.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local educational agency pursuant to the test of compliance sample table in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable.
(D)For charter schools that are a component entity of a school district or county office of education, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.
(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.
(B)Charter schools that are a component entity of a school district or county office of education shall report charter school financial data separately from the general fund of the school district or county office of education, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county office of education. The auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment and residency: for nonclassroom-based instruction, verify enrollment and residency of pupils.
(B)Using appropriate sampling techniques, verify pupil enrollment and verify that a pupils residence is located within the jurisdiction of the county in which the chartering authority is located or an adjacent county, based on residency documentation provided by the parent or guardian of the pupil at the time of enrollment.
(C)State in a finding any inappropriately reported enrollment or residency identified.
(5)Chartering authority input: require auditors to consult with and interview the chartering authority for input and information, including a focus on fiscal and compliance areas that the charter school excels in or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: determining if a related entity, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.
(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.
(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.
(B)Verify the calculation of the schools current expense of education, and report any discrepancies as a finding.
(C)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(8)Payments: select a sample of all payments and verify that those payments are legal and have proper authorization. The sampling shall include, but not be limited to, payments obtained through credit card statements, debit card statements, other electronic payment methods and media, and bank statements.
(9)Nonclassroom-based charter school network: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school employs teachers who are required to provide instruction to pupils enrolled in nonclassroom-based charter schools other than the charter school holding the teachers employment contract.
(B)Whether the charter school has teachers who are required to provide instruction to pupils who attend another nonclassroom-based charter school.
(C)Whether the charter school is in a network of nonclassroom-based charter schools, as defined in Section 47634.3.
(D)If a determination is made pursuant to subparagraph (A), (B), or (C), identify the other nonclassroom-based charter schools and report these results to the chartering authority of the charter school and the department.
(10)Funding determination thresholds: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school submitted a determination of funding request to the state board.
(B)Whether the state board approved the determination of funding request.
(C)Whether the documentation provided to the state board is the same as the calculations in the funding determination audit schedule.
(D)Whether the charter school is complying with the thresholds included in the state board approved determination of funding.
(c)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 20.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section shall not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other laws.
SEC. 21.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other law, the auditor conducting an annual audit pursuant to Section 41020 shall, upon request, provide financial and compliance information to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)Information provided by an auditor to the chartering authority, a county superintendent of schools, the Controller, or the Superintendent pursuant to this section shall be submitted simultaneously to the named school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 22.Section 41341 of the Education Code is amended to read:41341.(a)(1)If, during any fiscal year, the amount apportioned to a school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one unit of average daily attendance, the Superintendent, in accordance with regulations that the Superintendent is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Superintendent pursuant this subdivision shall be added to or allowed from any portion of the State School Fund.
(2)Notwithstanding paragraph (1), excesses may be withheld or deficiencies added to apportionments on account of audit exceptions reported in an audit or review, as described in subdivision (e) of Section 41344, or audit or review conducted by a certified public accountant or public accounting firm designated by a governmental agency that provided the local educational agency the opportunity to provide a written response.
(3)If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one or more units of average daily attendance, the school district, county office of education, or charter school shall report the corrected amount to the Superintendent.
(b)If, during any fiscal year, the amount apportioned to a community college district or to any fund from Section B of the State School Fund differs either positively or negatively from the amount to which the community college district or fund was entitled, by an amount equal to the funding of one full-time equivalent student, the Chancellor of the California Community Colleges, in accordance with regulations that the chancellor is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Chancellor of the California Community Colleges under this subdivision shall be added to or allowed from any portion of the State School Fund.
SEC. 23.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other law, a local educational agency shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 24.Section 41372 of the Education Code is amended to read:41372.(a)For purposes of this section, the following definitions apply:
(1)Salaries of classroom teachers and teacher have the same meanings as defined in Section 41011 provided that the cost of all health and welfare benefits provided to the teachers by the school district or charter school are included within the meaning of salaries of classroom teachers.
(2)(A)Current expense of education means the gross total expended (not reduced by estimated income or estimated federal and state apportionments) for the purposes classified in the final budget of a school district or charter school (except one which, during the preceding fiscal year, had less than 101 units of average daily attendance) submitted to and approved by the county superintendent of schools pursuant to Section 42127 or 47604.33, as applicable, for certificated salaries other than certificated salaries for pupil transportation, food services, and community services; classified salaries other than classified salaries for pupil transportation, food services, and community services; employee benefits other than employee benefits for pupil transportation personnel, food services personnel, and community services personnel; books, supplies, and equipment replacement other than for pupil transportation and food services; and community services, contracted services, and other operating expenses other than for pupil transportation, food services, and community services.
(B)Current expense of education does not include expenditures classified as sites, buildings, books, and media and new equipment (object of expenditure 6000 of the California School Accounting Manual), the amount expended from categorical aid received from the federal or state government which funds were granted for expenditures in a program not incurring any teacher salary expenditures or requiring disbursement of the funds without regard to the requirements of this section, or expenditures for facility acquisition and construction, and does not include the amount expended pursuant to any lease agreement for plant and equipment or the amount expended from funds received from the federal government pursuant to the federal Economic Opportunity Act of 1964 or any extension of that act of Congress.
(b)There shall be expended during each fiscal year for payment of salaries of classroom teachers:
(1)By an elementary school district or elementary charter school, 60 percent of the school districts or charter schools current expense of education.
(2)By a high school district or high school charter school, 50 percent of the school districts or charter schools current expense of education.
(3)By a unified school district or charter school serving pupils in grades kindergarten and grades 1 to 12, inclusive, 55 percent of the school districts or charter schools current expense of education.
(4)By a nonclassroom-based charter school, 40 percent of the charter schools current expense of education.
(c)If the county superintendent of schools having jurisdiction over the school district or charter school determines, on the basis of an audit conducted pursuant to Section 41020, that a school district or charter school has not expended the applicable percentage of current expense of education for the payment of salaries of classroom teachers during the preceding fiscal year, the county superintendent of schools shall, in apportionments made to the school district or charter school from the State School Fund after April 15 of the current fiscal year, designate an amount of this apportionment or apportionments equal to the apparent deficiency in school district or charter school expenditures. Any amount designated by the county superintendent of schools shall be deposited in the county treasury to the credit of the school district or charter school, but shall be unavailable for expenditure by the school district or charter school pending the determination to be made by the county superintendent of schools on any application for exemption that may be submitted to the county superintendent of schools. If it appears to the governing board of a school district or the governing body of a charter school that the application of this section during a fiscal year results in serious hardship to the school district or charter school, or in the payment of salaries of classroom teachers in excess of the salaries of classroom teachers paid by other school districts or charter schools of comparable type and functioning under comparable conditions, the governing board or body may apply to the county superintendent of schools in writing not later than September 15 of the succeeding fiscal year for exemption from the requirements of this section for the fiscal year on account of which the application is made. Upon receipt of this application, the county superintendent of schools shall grant the school district or charter school an exemption for any amount that is less than one thousand dollars ($1,000). If the amount is one thousand dollars ($1,000) or greater, the county superintendent of schools may grant an exemption from the requirements for the fiscal year on account of which the application is made. If the exemption is granted by the county superintendent of schools, the designated moneys shall be immediately available for expenditure by the governing board of the school district or the governing body of the charter school. If no application for exemption is made or exemption is denied, the county superintendent of schools shall order the designated amount or amount not exempted to be added to the amounts to be expended for salaries of classroom teachers during the next fiscal year.
(d)The county superintendent of schools shall enforce the requirements prescribed by this section, and may adopt necessary rules and regulations to that end.
SEC. 25.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares that continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low. To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(2)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(3)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions apply:
(1)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(2)Local educational agency means a school district, county office of education, charter school, or state special school.
(3)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract.
(4)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(5)System, unless the context requires otherwise, means the State Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Section 60900 for its functioning.
(6)Vacant position means a position to which a single designated certificated employee has not been assigned at the time that the data are collected by the department pursuant to Section 60900.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and properly assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those properly assigned and misassigned, at the schoolsite, local educational agency, county, and state levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county levels.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)A teacher of a course offered by a local educational agency in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
SEC. 26.Section 45037 of the Education Code is amended to read:45037.(a)Except as provided in Section 45036, for the fiscal year 2001-02 and for any fiscal year thereafter in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, the school district, county office of education, or charter school that the person is employed shall be assessed a penalty that shall be calculated as provided in subdivision (b) and withheld from state funding otherwise due to the school district, county office of education, or charter school.
(1)Notwithstanding Section 46300, the attendance of the noncertificated persons pupils during the period of service shall be included in the computation of average daily attendance.
(2)The noncertificated persons period of service shall not be excluded from the determination of eligibility for instruction time pursuant to Article 8 (commencing with Section 46200) of Chapter 2 of Part 26.
(b)(1)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, add the total number of schooldays on which the person rendered any amount of the service.
(2)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, for a period of service during which the person did not have a valid certification document, add the number of schooldays on which the person rendered any amount of the service without a valid certification document.
(3)Divide the number determined in paragraph (2) by the number determined in paragraph (1) and carry the result to four decimal places.
(4)Multiply a school districts or charter schools local control funding formula grant apportionment for the fiscal year, calculated pursuant to Section 42238.02, as implemented by Section 42238.03, or a county office of educations local control funding formula alternative education grant computed pursuant to Section 2574, as apportioned pursuant to Section 2575, for the fiscal year, for the program in which the noncertificated person rendered service by the number determined in paragraph (3).
(c)Beginning in 200203, if a county office of education releases a warrant in favor of a person for whom a period of school district or charter school service is included in the calculation set forth in paragraph (2) of subdivision (b), and the warrant is either compensation for employment as a teacher or for employment in some other capacity if the county office of education has direct knowledge or is in possession of information giving rise to a reasonable inference that the person is rendering service as a teacher, the county office of education shall be assessed a penalty. The penalty assessed to a county office of education for any fiscal year in which one or more school district or charter school teachers did not have a valid certification document shall be equal to the lesser of three amounts as follows:
(1)Fifty percent of all penalties assessed for that fiscal year to all school districts or charter schools in the county office of educations jurisdiction pursuant to subdivision (b).
(2)One-half percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when two or fewer school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(3)One percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when three or more school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(d)Except as provided in Section 41344.1, nothing in this section may be waived in whole or in part.
SEC. 27.Section 45125.1 of the Education Code is amended to read:45125.1.(a)Any entity that has a contract with a local educational agency shall ensure that any employee who interacts with pupils has a valid criminal records summary as described in Section 44237. When the contracting entity performs the criminal background check, it shall immediately provide any subsequent arrest and conviction information it receives to any local educational agency that it is contracting with pursuant to the subsequent arrest service.
(b)(1)This section does not apply to an entity providing services to a local educational agency, as described in subdivision (a), in an emergency or exceptional situation, such as when pupil health or safety is endangered or when repairs are needed to make school facilities safe and habitable.
(2)Notwithstanding subdivision (a), an employee of any entity that has a contract with a local educational agency, and that offers work experience opportunities for pupils, including, but not limited to, opportunities pursuant to Section 51760, 52336, 52372, 52410, or 52460, Article 1 (commencing with Section 52300), Article 5 (commencing with Section 52381), or Article 7 (commencing with Section 52450) of Chapter 9 of Part 28 of Division 4, Chapter 16.5 (commencing with Section 53070) of Part 28 of Division 4, Article 5 (commencing with Section 54690) of Chapter 9 of Part 29 of Division 4, or Part 54.5 (commencing with Section 88820) of Division 7 of Title 3, or workplace placements as part of a pupils individualized education program, including, but not limited to, the services described in Article 3 (commencing with Section 56470) of Chapter 4.5 of Part 30 of Division 4, is not required to have a valid criminal records summary pursuant to subdivision (a) if all of the following requirements are met:
(A)At least one adult employee in the workplace during the pupils work hours, who has direct contact with the pupil and has been designated by the employer as the employee of record who is responsible for the safety of the pupil, has a valid criminal records summary as described in Section 44237.
(B)A staff representative of the local educational agency makes visitations as specified in a pupils individualized education program, or, if unspecified, at least once every three weeks to consult with the pupils workplace liaison, observe the pupil at the workplace, and check in with the pupil to ensure the pupils health, safety, and welfare, including by addressing any concerns the pupil has raised.
(C)The parent or guardian of the pupil has signed a consent form regarding the pupils work placement, attesting that the parent or guardian understands the duties assigned to the pupil and the nature of the workplace environment.
(3)If a pupil participates in services provided by a contractor as part of an independent study program and the pupil is under the immediate supervision and control of the pupils parent or guardian during the provision of those services, the local educational agency shall do either of the following:
(A)Verify completion of a valid criminal records summary for all employees of the contractor who interact with the pupil.
(B)Ensure that the parent or guardian of the pupil has signed a consent form before the pupils interaction with a person employed by the contractor, attesting that the parent or guardian understands that the person employed by the contractor has not completed a valid criminal records summary as described in Section 44237.
(c)On a case-by-case basis, a local educational agency may require an entity with whom it has a contract to comply with the requirements of this section for employees in addition to those described in subdivision (a). The entity shall prepare and submit those employees fingerprints to the Department of Justice, as described in subdivision (a).
(d)(1)The Department of Justice shall ascertain whether the individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has been arrested or convicted of any crime insofar as that fact can be ascertained from information available to the Department of Justice. Upon implementation of an electronic fingerprinting system with terminals located statewide and managed by the Department of Justice, the Department of Justice shall ascertain the information required pursuant to this section within three working days. When the Department of Justice ascertains that an individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has a pending criminal proceeding for a felony as defined in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1, the Department of Justice shall notify the employer designated by the individual of that fact. The notification shall be delivered by telephone or email to the employer.
(2)The Department of Justice, at its discretion, may notify the local educational agencies in instances when the employee is defined as having a pending criminal proceeding described in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1.
(3)The Department of Justice shall forward one copy of the fingerprints to the Federal Bureau of Investigation to verify any record of previous arrests or convictions of the applicant. The Department of Justice shall review the criminal record summary it obtains from the Federal Bureau of Investigation and shall notify the employer only as to whether or not an applicant has any convictions or arrests pending adjudication for offenses that, if committed in California, would have been punishable as a violent or serious felony. The Department of Justice shall not provide any specific offense information received from the Federal Bureau of Investigation. The Department of Justice shall provide written notification to the contract employer only concerning whether an applicant for employment has any conviction or arrest pending final adjudication for any of those crimes, as specified in Section 45122.1, but shall not provide any information identifying any offense for which an existing employee was convicted or has an arrest pending final adjudication.
(e)(1)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall not permit an employee to interact with pupils until the Department of Justice has ascertained that the employee has not been convicted of a felony as defined in Section 45122.1.
(2)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a felony if the employee has obtained a certificate of rehabilitation and pardon pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
(3)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a serious felony that is not also a violent felony if that employee can prove to the sentencing court of the offense in question, by clear and convincing evidence, that the employee has been rehabilitated for the purposes of schoolsite employment for at least one year. If the offense in question occurred outside this state, then the person may seek a finding of rehabilitation from the court in the local educational agency in which the employee is a resident.
(f)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall certify in writing to the local educational agency that neither the employer nor any of its employees who are required by this section to submit or have their fingerprints submitted to the Department of Justice and who may interact with pupils have been convicted of a felony as defined in Section 45122.1.
(g)Where reasonable access to the statewide electronic fingerprinting network is available, the Department of Justice may mandate electronic submission of the fingerprint cards and other information required by this section.
(h)(1)For purposes of this section, an individual operating as a sole proprietor of an entity that has a contract with a local educational agency, as described in subdivision (a), shall be considered an employee of that entity.
(2)To protect the safety of any pupil that may interact with an employee of an entity that is a sole proprietorship and has a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c), a local educational agency shall prepare and submit the employees fingerprints to the Department of Justice, as described in subdivision (a).
(i)For purposes of this section, local educational agency means a school district, county office of education, or charter school.
SEC. 28.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 29.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)(A)Visit each charter schoolsite, resource center, meeting space, and satellite facility established by the charter school at least annually.
(B)Commencing July 1, 2028, annually attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and review the agendas and minutes of those meetings to monitor actions that may be taken.
(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)(A)Monitor the fiscal condition of each charter school under its authority.
(B)Commencing July 1, 2028, annually monitor payments of each charter school under its authority to verify that the payments are legal and have proper authorization. Monitoring shall include, but not be limited to, a review of credit statements, debit card statements, other electronic payment methods and media, and bank statements.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)A renewal of the charter is granted or denied.
(B)The charter is revoked.
(C)The charter school will cease operation for any reason.
(6)(A)Commencing July 1, 2028, annually verify all of the following for a nonclassroom-based charter school:
(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.
(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.
(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.
(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:
(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.
(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.
(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.
(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.
(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.
(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).
(7)Commencing July 1, 2028, a chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.
(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
SEC. 30.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall revise regulations to require that charter schools report periodic and annual financial data in the same manner and on the same form prescribed for school districts in accordance with all of the following:
(a)Charter schools with an average daily attendance of 5,000 or more pupils and all nonclassroom-based charter schools shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year.
(b)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year.
(c)Charter schools, excluding nonclassroom-based charter schools, with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.
SEC. 31.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)(A)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph under either of the following conditions:
(i)The school district has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership.
(ii)For the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district pursuant to subdivision (h) of Section 41326, the school district has exited state receivership and has a qualified interim certification pursuant to Section 42131 or the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving the charter school would result in the school district having a qualified or negative interim certification pursuant to Section 42131.
(B)Charter schools proposed in a school district satisfying one of the conditions specified in subparagraph (A) shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by both the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 in charter schools shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated positions, teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 32.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(L)Admission policy and procedures, consistent with subdivision (e).
(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated positions teachers, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 33.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 34.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize, except as provided in subdivision (d). A school district with an average daily attendance of fewer than 10,000 pupils shall not authorize one or more nonclassroom-based charter schools or approve a material revision to expand one or more existing nonclassroom-based charter schools if doing so would result in more than a totality of 100 percent of the average daily attendance of the school district authorizing the charter.
(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)Except as provided in subdivision (d), if the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
(d)(1)Notwithstanding subdivisions (a) and (c), a chartering authority that authorized a nonclassroom-based charter school in operation on or before December 31, 2025, and that exceeds the limits established in subdivision (a), may reauthorize and continue to be the chartering authority for that nonclassroom-based charter school if, as of December 31, 2025, the chartering authority employs at least four full-time equivalent executive-level staff members whose primary responsibilities are related to the following job classifications and areas of employment:
(A)Superintendent.
(B)Chief business official.
(C)Human resources.
(D)Special education.
(E)Curriculum.
(2)Staff members who have the job responsibilities described in subparagraphs (A), (C), (D), and (E) of paragraph (1) shall hold an administrative credential issued by the Commission on Teacher Credentialing, as required by Section 35028.
SEC. 35.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.
(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.
(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall include, but not be limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.
(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:
(1)Acting as the fiscal agent for the program.
(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.
(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.
(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.
(4)Facilitating an annual statewide conference for chartering authorities.
(5)Establishing and facilitating an advisory board, as provided in subdivision (e), to provide input on the development and full implementation of services provided by the program.
(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (e) to measure the programs continual improvement and program fidelity, and to document the programs impact.
(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:
(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.
(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.
(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.
(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.
(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.
(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.
(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:
(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.
(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.
(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.
(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.
(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:
(A)The role and functions of the advisory board.
(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.
(C)The terms of advisory board members.
(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.
(E)Meetings, including the frequency of meetings.
(F)The rules of order.
(G)The process for amending bylaws.
(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:
(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:
(i)Responsibility: the duty to serve the states pupils and the public.
(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.
(iii)Fairness: impartial and just treatment of all stakeholders.
(iv)Knowledge: understanding of charter school law and practice.
(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:
(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.
(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.
(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.
(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.
SEC. 36.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder. The state board shall adopt regulations that apply Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 to charter schools. To the extent that these regulations concern the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)(1)Notwithstanding any other law and except as provided in paragraph (1) of subdivision (e), a charter school that has an approved charter may receive funding for nonclassroom-based instruction only if a determination for funding is made pursuant to Section 47634.2 by the state board. The determination for funding shall be subject to any conditions or limitations the state board may prescribe. The state board shall adopt regulations on or before January 1, 2027, that define and establish general rules governing nonclassroom-based instruction that apply to all charter schools and to the process for determining funding of nonclassroom-based instruction by charter schools offering nonclassroom-based instruction other than the nonclassroom-based instruction authorized by paragraph (1) of subdivision (e). Nonclassroom-based instruction includes, but is not limited to, independent study, home study, workstudy, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(2)Except as provided in paragraph (2) of subdivision (b) of Section 47634.2, a charter school that receives a determination pursuant to subdivision (b) of Section 47634.2 is not required to reapply annually for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the state board. Notwithstanding any other law, the state board may require a charter school to provide updated information at any time it determines that a review of that information is necessary. The state board may terminate a determination for funding if updated or additional information requested by the state board is not made available to the state board by the charter school within 30 calendar days or if the information otherwise supports termination.
(3)A charter school that offers nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2 to receive funding each time its charter is renewed or materially revised pursuant to Section 47607. A charter school that materially revises its charter to offer nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2.
(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations pursuant to paragraph (1) of subdivision (d) specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of this part, virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.
(5)Notwithstanding any other law, the state board and the Superintendent shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 37.Section 47612.7 of the Education Code is amended to read:47612.7.(a)Notwithstanding any other law and except as provided in subdivision (b), from January 1, 2020, to December 31, 2025, inclusive, the approval of a petition for the establishment of a new charter school, as defined in paragraph (2) of subdivision (e) of Section 47612.5, is prohibited.
(b)Subdivision (a) shall not apply to a nonclassroom-based charter school that was granted approval of its petition and providing educational services to pupils before October 1, 2019, under either of the following circumstances:
(1)If Assembly Bill 1507 of the 201920 Regular Session amends Section 47605.1 and becomes operative on January 1, 2020, and the charter school is required to submit a petition to the governing board of a school district or county board of education in an adjacent county in which its existing resource center is located in order to comply with Section 47605.1, as amended by Assembly Bill 1507 of the 201920 Regular Session, or to retain current program offerings or enrollment.
(2)If a charter school is required to submit a petition to a school district or county board of education in which a resource center is located in order to comply with the court decision in Anderson Union High School District v. Shasta Secondary Home School (2016) 4 Cal.App.5th 262, or other relevant court ruling, and the petition is necessary to retain current program offerings or enrollment.
(3)A charter school authorized by a different chartering authority pursuant to paragraphs (1) and (2) shall be regarded by the department as a continuing charter school for all purposes to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(c)Notwithstanding Section 33050 or any other law, the state board shall not waive the restrictions described in this section.
(d)(1)No later than October 1, 2023, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall study the processes used to determine funding for nonclassroom-based charter schools.
(2)The study shall identify and make recommendations on potential improvements to the processes, including recommendations for enhancing oversight and reducing fraud, waste, and abuse.
(3)No later than March 1, 2024, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall report to the appropriate fiscal and policy committees of the Legislature, the Department of Finance, the department, and the executive director of the state board on recommendations and observations as a result of the study. These recommendations or observations shall consider the fiscal impact on the state.
(e)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.
SEC. 38.Section 47613 of the Education Code is amended to read:47613.(a)Except as set forth in subdivision (b), a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 1 percent of the revenue of the charter school.(b)(1)Except as set forth in subdivision (c), a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 3 percent of the revenue of the charter school if the charter school is able to obtain substantially rent free facilities from the chartering authority.(2)Except as set forth in subdivision (c), a chartering authority may charge for the actual costs of supervisorial oversight of a charter school that exceeds 1 percent of the revenue of the charter school if the chartering authority is granted approval from the state board.(c)Oversight fees shall not exceed 1 percent of the revenue of a charter school that is located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe.(d)This section does not prevent the charter school from separately purchasing administrative or other services from the chartering authority or any other source.(e)For purposes of this section, the following definitions apply:(1)Chartering authority means a school district, county board of education, or the state board that granted the charter to the charter school or the governing board of a school district or county board of education that was designated as the chartering authority.(2)Revenue of the charter school means the amount received in the current fiscal year from the local control funding formula calculated pursuant to Section 42238.02, as implemented by Section 42238.03.(f)For purposes of this section, costs of supervisorial oversight include, but are not limited to, costs incurred pursuant to Section 47607.3.SEC. 39.SEC. 38.Section 47613.3 is added to the Education Code, to read:47613.3.(a)A charter school shall comply with all of the following:
(1)For purposes of providing direct services to pupils, a charter school shall not expend public funds for a contract with a contractor, unless that contractor complies with both of the following requirements:
(A)The materials, programs, and organizations providing services are nonsectarian.
(B)The funds that would be used to pay for direct services to pupils are not used to pay tuition or fees at a private school.
(2)A charter school shall not offer any financial payments or gifts to a teacher, a pupil or prospective pupil, or to the parent or guardian of a pupil or prospective pupil for enrollment, referral, retention, participation in school meetings or activities, or participation in direct services to pupils by contractors.
(3)The salary and other income paid to an employee by a charter school or an entity managing a charter school, as defined by Section 47604.1, shall not depend on pupil attendance or pupil course completion.
(4)Management services, business services, marketing, and technology contract fees, including, but not limited to, an entity managing a charter school, as defined by Section 47604.1, shall not be calculated as a percentage of the revenue of the charter school, as defined in Section 47613.
(b)The extent of the charter schools compliance with subdivision (a) shall be reviewed and reported as part of the annual, independent financial audit that a charter school is required to transmit by December 15 of each year pursuant to Section 41020.
(c)The Controller shall include the items listed in paragraphs (1) to (4), inclusive, of subdivision (a) in the next revision of the audit guide.
(d)This section does not supersede or invalidate a contract that is in effect at the time this section becomes operative. If a contract is in effect at the time this section becomes operative, the contract shall remain in effect until the parties to the agreement negotiate a successor agreement. A memorandum of understanding shall not extend a contract that is in effect at the time this section becomes operative.
(e)This section shall become operative on July 1, 2026.
SEC. 40.SEC. 39.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other provision of law, through the 202526 fiscal year, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, shall be adjusted by the state board.
(2)(A)Notwithstanding any other provision of law, for the 202627 fiscal year and each fiscal year thereafter, a charter school that offers less than 75 percent of the instructional time at the schoolsite and requires the attendance of all pupils for less than 75 percent of the minimum instructional time required to be offered shall have the amount of funding to be allocated on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, adjusted by the state board.
(B)A charter school that offers 75 percent or more of the instructional time at the schoolsite and requires the attendance of all pupils for 75 percent or more of the minimum instructional time required to be offered shall not be required to submit a funding determination to the state board and shall receive full funding.
(C)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board in accordance with this section.
(b)(1)The state board shall adopt regulations setting forth criteria for the determination of funding for nonclassroom-based instruction and shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the state board shall consider, among other factors it deems appropriate, all of the following:
(A)The amount of the charter schools total budget expended on certificated employee salaries and benefits and on schoolsites.
(B)Whether the charter school serves 90 percent of the average unduplicated pupil count in comparison to the counties served.(C)(B)The current expense of education calculation.
(D)(C)The teacher-to-pupil ratio in the school.
(E)(D)One-time state funds and expenses for facilities.
(F)(E)Budget reserves.
(G)(F)For charter schools that are part of a network of nonclassroom-based charter schools, the factors identified in subparagraphs (A), (B), and (C), and (D) using aggregate data from all charter schools in the network.
(2)The state board shall appoint an advisory committee to recommend criteria to the state board in accordance with this section if it has not done so by January 1, 2002. The advisory committee shall include, but is not limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
(c)Commencing with the 202627 fiscal year, the state boards Advisory Commission on Charter Schools shall recommend to the state board the approval of a funding determination request submitted by a charter school consistent with all of the following:
(1)(A)Approval of the request at 70 percent if all both of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 35 percent but less than 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 60 percent but less than 70 percent.
(iii)The percentage calculated for the unduplicated pupil count equals at least 70 percent but less than 80 percent as compared to the counties served by the charter school.(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(2)(A)Approval of the request at 85 percent, unless there is a reasonable basis to recommend less, if all both of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 70 percent but less than 80 percent.
(iii)The percentage calculated for the unduplicated pupil count equals at least 80 percent but less than 90 percent as compared to the counties served by the charter school.(B)A recommendation made pursuant to this paragraph shall include the reasons justifying a percentage that is greater than 70 percent or if the recommended percentage is lower than the requested percentage, the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(3)(A)Approval of the request at 100 percent, unless there is a reasonable basis to recommend less, if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 80 percent.
(iii)The percentage calculated for the unduplicated pupil count equals at least 90 percent as compared to the counties served by the charter school.(iv)(iii)The ratio of average daily attendance for independent study pupils to full-time certificated employees responsible for independent study does not exceed a pupil-teacher ratio of 25:1 or the equivalent ratio of pupils to full-time certificated employees for all other educational programs operated by the largest unified school district, as measured by average daily attendance, in the county or counties in which the charter school operates.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(4)(A)Due to the nonclassroom-based instruction not being substantially dedicated to the instructional benefit of the pupils, a denial of the request if one or more of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits is less than 35 percent.
(ii)The current expense of education is less than 40 percent.
(iii)The percentage calculated for total expenditures on instruction and related services is less than 60 percent.
(iv)The percentage calculated for the unduplicated pupil count equals less than 70 percent as compared to the counties served by the charter school.(B)A recommendation made pursuant to this paragraph shall include the reasons justifying the denial and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(d)Commencing with the 202627 fiscal year, all of the following shall apply:
(1)An approved determination of funding for a new charter school in its first year of operation shall be submitted by December 1 and shall be for two fiscal years. Within 90 days after the end of its first fiscal year of operation, a charter school shall submit unaudited actual expense reports and a funding determination form based on the charter schools actual second-year budget. If the Advisory Commission on Charter Schools determines that the actual expenditures of the charter school or the second-year funding determination form do not support the funding determination for the second year, the Advisory Commission on Charter Schools shall recommend that the state board revise the funding determination.
(2)(A)For charter schools that are part of a network of nonclassroom-based charter schools, a funding determination shall be for one year and shall be based on the aggregate data of all nonclassroom-based charter schools in the network. If a charter school already has a multiyear funding determination prior to being identified as part of a network, that determination shall be deemed invalid and the network shall submit documentation for a new funding determination.
(B)For nonclassroom-based charter schools that are not part of a network, funding determinations shall be set to align with the duration of the remainder of their charter pursuant to Sections 47605.9, 47607, and 47607.2. Nonclassroom-based charter schools shall apply for a funding determination concurrently with having their charter renewed.
(3)(A)Nonclassroom-based charter schools shall submit the financial documentation required for a funding determination to the department on an annual basis in the years between funding determinations.
(B)The state board shall make funding determinations based on a review of aggregate expenditure and revenue information from all years since the prior funding determination was made and shall reduce the funding accordingly.
(4)Data submitted by a charter school as part of its funding determination shall be consistent with its annual independent financial audit pursuant to Section 41020 for the year of the funding determination. If the information in the funding determination form is not consistent with the information reported in its annual independent financial audit, a charter school shall provide clarification and backup documents along with their form. A charter school shall concurrently submit its funding determination form to its chartering authority. The chartering authority shall review the form and notify the department of any concerns with the form, including, but not limited to, discrepancies with the data submitted.
(5)Any multiyear funding determination approved by the state board may be modified by the state board, including the terms of the multiyear approval and the funding authorized. The state board may terminate a determination of funding if updated or additional information requested by the department or the advisory committee pursuant to this section is not made available by a charter school within 30 calendar days or if credible information from any source supports termination. If credible information from a source supports termination, the charter school shall have 30 calendar days prior to the termination of funding to provide additional information to support the charter school's determination of funding.
(6)If a charter school is maintaining an unassigned fund balance for economic uncertainties that is 5 percent or less of the charter schools annual expenditures, the Superintendent shall notify the chartering authority of the charter school to investigate whether the charter school has sufficient reserves to address economic uncertainties.
(7)A charter school that is eligible for a funding determination based on the criteria pursuant to subparagraph (A) of paragraph (1) of subdivision (c) shall not be eligible for an increase in the funding determination based on mitigating circumstances.
(e)Commencing with the 202627 fiscal year, charter schools that submit a funding determination request shall adhere to all of the following:
(1)Exclude unspent one-time revenues that are permitted to be spent over multiple fiscal years from the calculations of the percentage of school revenues spent on instruction and related services if the charter school recognizes these revenues and expenditures in the year the funds are actually spent.
(2)May include any funds spent on resource centers or site-based instructional facilities operated by the charter school used primarily for purposes of in-person instruction and pupil support services, including, but not limited to, tutoring, counseling, special education services, libraries, and visual and performing arts facilities. A charter school shall provide the department with supporting documentation related to these costs.
(3)Report the amount and classification of its reserves on funding determination forms consistent with state accounting categories of assigned, unassigned, restricted, committed, and nonspendable.
(4)Exclude from the revenue any net increase to the reserve for economic uncertainties if the charter school has an unassigned fund balance that represents less than 10 percent of their annual expenditures.
(5)If applicable, explain on the funding determination form the purposes for which unassigned fund balances are being maintained at a level that is 10 percent or more of the charter schools annual expenditures.
(f)This section does not authorize the state board to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) of Section 47612.5.
(g)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction.
(h)Notwithstanding any other provision of law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
(i)For purposes of this section, the following definitions apply:
(1)Current expense of education has the same meaning as defined in subdivision (b) of Section 41372.
(2)Network of nonclassroom-based charter schools has the same meaning as defined in subdivision (b) of Section 47634.3.
(3)Nonclassroom-based instruction has the same meaning as defined in paragraph (2) of subdivision (e) of Section 47612.5.
(4)Pupil-teacher ratio has the same meaning as described in Section 51745.6.
(5)Schoolsite has the same meaning as described in paragraph (3) of subdivision (e) of Section 47612.5.
SEC. 41.SEC. 40.Section 47634.3 is added to the Education Code, to read:47634.3.(a)Beginning with the 202728 school year, the department shall annually develop a list that identifies networks of nonclassroom-based charter schools, as described in this section, based on data from the prior school year.
(b)For purposes of this section, a network of nonclassroom-based charter schools means two or more nonclassroom-based charter schools, as defined pursuant to paragraph (2) of subdivision (e) of Section 47612.5, that meet one or more of the following:
(1)Employ teachers that teach pupils enrolled at schools other than the charter school holding the teachers employment contract or employ teachers at more than one local educational agency.
(2)Have a shared management structure, such as having supervisors and managers who typically function on a regional multischool level and oversee, evaluate, and discipline teachers across multiple schools.
(3)Have contracts with the same vendor totaling at least 40 percent of the schools annual total revenue.
SEC. 42.SEC. 41.Section 51745.6 of the Education Code is amended to read:51745.6.(a)The ratio of average daily attendance for independent study pupils 18 years of age or less to school district, county office of education, or charter school full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall comply with one of the following:
(1)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(2)It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(3)It shall be calculated by using a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio. All pupils of the school district, county office of education, or charter school, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575, for county offices of education, and Section 42238.05, for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 43.SEC. 42.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 44.SEC. 43.Section 51748 of the Education Code is amended to read:51748.School districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district, charter school, or county board of education by grade level, program placement, and the school in which the pupil is enrolled.
SEC. 45.SEC. 44.Section 51749.7 is added to the Education Code, immediately following Section 51749.6, to read:51749.7.(a)A local educational agency shall not allocate, or advertise the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are not provided by a credentialed employee of the local educational agency for the pupil and that are paid for by the local educational agency.
(b)It is the intent of the Legislature that this section does not apply to expanded learning opportunities programs.
SEC. 46.SEC. 45.Section 60119 of the Education Code is amended to read:60119.(a)In order to be eligible to receive funds available for purposes of this article, the governing board of a school district or the governing body of a charter school shall take the following actions:
(1)(A)The governing board of a school district or the governing body of a charter school shall hold a public hearing or hearings at which the governing board or body shall encourage participation by parents, teachers, members of the community interested in the affairs of the school district or charter school, and bargaining unit leaders, and shall make a determination, through a resolution, as to whether each pupil in each school in the school district or charter school has sufficient textbooks or instructional materials, or both, that are aligned to the content standards adopted by the state board in each of the following subjects, as appropriate, that are consistent with the content and cycles of the curriculum framework adopted by the state board:
(i)Mathematics.
(ii)Science.
(iii)History-social science.
(iv)English language arts, including the English language development component of an adopted program.
(B)The public hearing shall take place on or before the end of the eighth week from the first day pupils attend school for that year. A school district or charter school that operates schools on a multitrack, year-round calendar shall hold the hearing on or before the end of the eighth week from the first day pupils attend school for that year on any tracks that begin a school year in August or September.
(C)As part of the hearing required pursuant to this section, the governing board of a school district or the governing body of a charter school also shall make a written determination as to whether each pupil enrolled in a world language or health course has sufficient textbooks or instructional materials that are consistent with the content and cycles of the curriculum frameworks adopted by the state board for those subjects. The governing board of a school district or the governing body of a charter school also shall determine the availability of laboratory science equipment as applicable to science laboratory courses offered in grades 9 to 12, inclusive. The provision of the textbooks, instructional materials, or science equipment specified in this subparagraph is not a condition of receipt of funds provided by this subdivision.
(2)(A)If the governing board of a school district or the governing body of a charter school determines that there are insufficient textbooks or instructional materials, or both, the governing board or body shall provide information to classroom teachers and to the public setting forth, in the resolution, for each school in which an insufficiency exists, the percentage of pupils who lack sufficient standards-aligned textbooks or instructional materials in each subject area and the reasons that each pupil does not have sufficient textbooks or instructional materials, or both, and take any action, except an action that would require reimbursement by the Commission on State Mandates, to ensure that each pupil has sufficient textbooks or instructional materials, or both, within two months of the beginning of the school year in which the determination is made. The governing board or body shall submit a copy of the resolution to the county superintendent of schools no later than three business days after the governing board or body hearing.
(B)In carrying out subparagraph (A), the governing board of a school district or the governing body of a charter school may use moneys in any of the following funds:
(i)Any funds available for textbooks or instructional materials, or both, from categorical programs, including any funds allocated to school districts or charter schools that have been appropriated in the annual Budget Act.
(ii)Any funds of the school district or charter school that are in excess of the amount available for each pupil during the prior fiscal year to purchase textbooks or instructional materials, or both.
(iii)Any other funds available to the school district or charter school for textbooks or instructional materials, or both.
(b)The governing board of a school district or the governing body of a charter school shall provide 10 days notice of the public hearing or hearings set forth in subdivision (a). The notice shall contain the time, place, and purpose of the hearing and shall be posted in three public places in the school district or charter school. The hearing shall be held at a time that will encourage the attendance of teachers and parents and guardians of pupils who attend the schools in the school district or charter school and shall not take place during or immediately following school hours.
(c)(1)For purposes of this section, sufficient textbooks or instructional materials means that each pupil, including English learners, has a standards-aligned textbook or instructional materials, or both, to use in class and to take home. This paragraph does not require two sets of textbooks or instructional materials for each pupil. The materials may be in a digital format as long as each pupil, at a minimum, has and can access the same materials in the class and to take home, as all other pupils in the same class or course in the school district or charter school and has the ability to use and access them at home.
(2)Sufficient textbooks or instructional materials as defined in paragraph (1) do not include photocopied sheets from only a portion of a textbook or instructional materials copied to address a shortage.
(d)The governing board of a school district or the governing body of a charter school that receives funds for instructional materials from any state source is subject to the requirements of this section.
(e)For the purpose of transitioning to instructional materials that are aligned with the common core academic content standards and science content standards, it is the intent of the Legislature that textbooks, instructional materials, and supplemental instructional materials be deemed to be aligned with the content standards pursuant to subdivisions (a) and (c), and be deemed consistent with the content and cycles of the curriculum framework adopted by the state board pursuant to subdivision (a) if the textbooks, instructional materials, supplemental instructional materials, or a combination of any such materials are aligned to the content standards adopted pursuant to Section 60605 or 60605.8, or former Section 60605.85, as that section read on June 30, 2014.
SEC. 47.SEC. 46.Section 20110 of the Public Contract Code is amended to read:20110.(a)The provisions of this part shall apply to contracts awarded by school districts subject to Part 21 (commencing with Section 35000) of Division 3 of Title 2 of the Education Code.
(b)(1)This article shall also apply to contracts awarded by a charter school established pursuant to Part 26.8 (commencing with Section 47600) of Division 4 of Title 2 of the Education Code.
(2)For purposes of this article, a charter school shall be deemed a school district and the governing body of a charter school shall be deemed the governing board of a school district, and a reference to a school district or the governing board of a school district shall be deemed to also reference a charter school or the governing body of a charter school, as applicable.
SEC. 48.SEC. 47.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year.
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts, educational joint powers authorities, county superintendents of schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the generally accepted government auditing standards promulgated by the United States Government Accountability Office. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation or both and includes the verification of each of the following:
(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(C)Teacher misassignments pursuant to Section 44258.9.
(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126.
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14503 of the Education Code is amended to read:14503.(a)Financial and compliance audits shall be performed in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
(b)(1)An independent auditor shall not engage in financial or compliance audits unless, commencing after the first audit, and every three years thereafter, the auditor completes a quality control review conducted by the Controller in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office. The time period between commencement of the second and successive quality control review and completion of a subsequent quality control review shall be calculated from the first day of the month following commencement of the completion of the preceding quality control review.
(2)If an independent auditor has not engaged in financial or compliance audits for three or more consecutive years, the Controller shall conduct a quality control review after the auditor completes the first financial or compliance audit.
SEC. 6.Section 14504 of the Education Code is amended to read:14504.To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors. The Controller shall determine whether audit reports are in conformance with reporting provisions of subdivision (a) of Section 14503 and shall notify each local educational agency, the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. The local educational agency, the chartering authority, the county superintendent of schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
SEC. 7.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a local educational agency was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of the Controllers reviews to the entity that referred the independent auditor to the Controller, the independent auditor, and the local educational agency for which the audit was performed, and shall review the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)In performing quality control reviews, the Controller shall ensure that the selection of audits for each auditor undergoing a quality control review is representative of each type of local educational agency for which an auditor performs audits and shall ensure that reviewers have relevant experience with financial or compliance audits of local educational agencies.
(c)(1)The Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for a local educational agency for the prior three fiscal years if any of the following circumstances exists:
(A)The school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.
(B)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(C)The responsible county superintendent of schools or the Superintendent has otherwise determined that a lack of going concern exists for the school district, educational joint powers authority, or county superintendent of schools pursuant to Sections 1630 and 42127.6.
(2)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(d)The Controller shall conduct a quality control review after an authorized certified public accountant or public accountant listed in the Certified Public Accountants Directory Service (1) completes its first local educational agency financial statement and compliance audit or (2) completes its first local educational agency financial statement and compliance audit after three or more years of not having completed an audit.
(e)The Controller shall conduct a quality control review every three years to ensure that all certified public accountant firms are periodically reviewed.
(f)In any matter that is referred to the California Board of Accountancy under subparagraph (A) of paragraph (1) of subdivision (c), the Controller may suspend the independent auditor from performing any local educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local educational agency under subdivision (c). The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(g)The county superintendent of schools, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local educational agency to the California Board of Accountancy for action described in paragraph (2) of subdivision (c) if any of the following circumstances exists:
(1)An audit of a local educational agency was conducted in a manner that may constitute unprofessional conduct as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
(3)The continuing education and prior experience requirements of Section 41020 are not met.
SEC. 8.Section 14505 of the Education Code is amended to read:14505.(a)The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(1)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(2)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to reporting provisions of subdivision (a) of Section 14503.
(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(c)If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits that are necessary to carry out the Controllers duties and responsibilities pursuant to this code and the Government Code. This chapter does not authorize a local educational agency, or a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out additional audits. To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid unnecessary duplication of audit efforts. In performing additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the local educational agency for the costs of these additional audits.
SEC. 10.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the Superintendent on or before June 30 of each year in order to apprise the Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the Superintendent. Before issuing the report, the Controller shall allow each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting that local educational agency.
SEC. 11.Section 14508 of the Education Code is amended to read:14508.The Controller shall submit a report to the Legislature on or before June 30 of each year regarding any recommendations made to the Superintendent pursuant to Section 14507.
SEC. 12.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (o) of Section 41020.
SEC. 13.Section 17604 of the Education Code is amended to read:17604.(a)Wherever in this code the power to contract is invested in the governing board of the school district, the governing body of a charter school, or any member thereof, the power may, by a majority vote of the governing board or body, be delegated to its district superintendent or charter school administrator, or to any persons that the district superintendent or charter school administrator may designate, or if there is no district superintendent or charter school administrator, then to any other officer or employee of the school district or charter school that the governing board or body may designate. The delegation of power may be limited as to time, money, or subject matter or may be a blanket authorization in advance of its exercise, all as the governing board or body may direct. A contract made pursuant to the delegation and authorization shall not be valid or constitute an enforceable obligation against the school district or charter school unless the same shall have been approved or ratified by the governing board or body, the approval or ratification to be evidenced by a motion of the governing board or body duly passed and adopted.
(b)In the event of malfeasance in office, the school district or charter school official invested by the governing board or body with the power of contract shall be personally liable to the school district or charter school employing the official for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 14.Section 17605 of the Education Code is amended to read:17605.(a)The governing board or body, by majority vote, may adopt a rule, delegating to any officer or employee of the school district or charter school as the governing board or body may designate, the authority to purchase supplies, materials, apparatus, equipment, and services. A rule shall not authorize an officer or employee to make any purchases involving an expenditure by the school district or charter school in excess of the amount specified by Section 20111 of the Public Contract Code. The rule shall prescribe the limits of the delegation as to time, money, and subject matter. All transactions entered into by the officer or employee of the school district or charter school shall be reviewed by the governing board or body every 60 days.
(b)In the event of malfeasance in office, the school district or charter school officer or employee invested by the governing board or body with the power to contract shall be personally liable for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 15.Section 33309.5 is added to the Education Code, to read:33309.5.(a)The Office of the Education Inspector General is hereby established in the department. The Education Inspector General shall be appointed by the Governor, subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the state board. The state board shall not prevent or prohibit the Education Inspector General from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(b)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising audits and investigations relating to the programs and operations of the department and department, local educational agencies. agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department and department, local educational agencies. agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1.
(3)Providing a means for keeping the state board and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department and department, local educational agencies, and entities managing a charter school, as defined in subdivision (a) of Section 47604.1, and the necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(c)For purposes of this section, local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SEC. 16.Section 41020 of the Education Code is amended to read:41020.(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)It is the further intent of the Legislature that all charter schools be audited.
(b)(1)(A)On or before May 1 of each fiscal year, the governing board of each school district or educational joint powers authority shall either provide for an audit of all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the school district or educational joint powers authority to provide for that auditing.
(B)A contract to perform the audit of a school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. Except as provided in clause (ii) of subparagraph (B), an independent audit shall be separately conducted and reported for each charter school that is assigned a County-District-School code.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Notwithstanding subparagraph (A) of paragraph (2), financial data for charter schools that are a component entity of a school district or county office of education shall be presented separately in the applicable audit report as if the financial data of the charter school represents a major fund, and not as a separately conducted and reported audit.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Superintendent to provide for that auditing.
(c)If the governing board of a school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (b) has not provided for an audit of the books and accounts of the local educational agency by April 1, one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Superintendent shall provide for the audit.
(d)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(e)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
(f)Each audit conducted in accordance with this section shall include all of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency.
(2)An audit of pupil attendance procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 or, for a charter school, Section 47606.5.
(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(h)(1)The cost of an audit provided for by a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Superintendent for a county superintendent of schools shall be paid by the Superintendent and the Superintendent shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(4)The cost of an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of a county superintendent of schools shall be paid from the county school service fund.
(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(4)(A)(i)Commencing with the 202627 fiscal year, and every two years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall complete 24 hours of continuing education in governmental accounting, auditing, or related subjects specific to local educational agencies and the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting. The continuing education shall include both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include pupil attendance, independent study, charter schools, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education units taken as part of the California Board of Accountancy licensure requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202627 fiscal year, certified public accountant firms, certified public accountants or public accountants accountants, and audit staff that conduct audits of local educational agencies shall comply with both of the following:
(i)Have certified prior experience conducting financial and compliance audits for local educational agencies.
(ii)Have been peer reviewed by the California Board of Accountancy to ensure that the selection of audits for each auditor undergoing a peer review is representative of each type of local educational agency for which an auditor performs audits and the reviewers have relevant experience with financial or compliance audits of local educational agencies.
(C)The continuing education units and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)Auditors that are under contract with a local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(7)Auditors that conduct audits of local educational agencies shall share work papers and draft audit reports upon request by the local educational agency or a successor auditor of the local educational agency.
(8)A successor auditor of a local educational agency shall request all work papers and draft audit reports in the event that the previous auditor is terminated or otherwise denied for renewal.
(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(k)(1)On or before December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the Superintendent, and the Controller.
(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Upon submission of the final audit report to the governing board of each school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district or educational joint powers authority, the county superintendent of schools shall do all of the following:
(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the school district or educational joint powers authority and request the governing board of the school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction before March 15.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, on or before May 15, that the county superintendent of schools staff has reviewed all audits of school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(4)In the audit of a school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county superintendent of schools and the Superintendent and restate the exception in the audit report. After receiving that notification, the Superintendent shall either consult with the school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before March 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before April 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)If the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before April 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report and shall immediately notify the appropriate chartering authority and the county superintendent of schools of the county in which the charter school is located.
(ii)After receiving notification pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)If the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report and shall immediately notify the Superintendent.
(ii)After receiving notification pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report submitted to a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction before March 15 if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools or chartering authority certifies as of May 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools or chartering authority to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to chartering authorities, the county superintendent of schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(s)Audits of regional occupational centers and programs are subject to this section.
(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accordance with the generally accepted government auditing standards promulgated by the United States General Accountability Office.
SEC. 17.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(2)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(b)(1)(A)(i)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(ii)As applicable pursuant to subdivision (a), the Superintendent may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(B)Extensions granted pursuant to this subdivision shall be the shortest amount of time reasonable given the extenuating circumstances justifying an extension, shall be in increments no greater than 45 calendar days, and shall not exceed a total of 90 calendar days from the due date established under Section 41020.
(2)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may, after consultation with the governing board or body of a local educational agency, the auditors under contract to the local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the local educational agency. The county superintendent of schools, chartering authority, or Superintendent, shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(3)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent may request the Controllers office to investigate the situation and initiate action as provided in subdivision (c).
(c)(1)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may do any of the following:
(A)Accept the action of the county superintendent of schools, chartering authority, or Superintendent permitted by subdivision (b).
(B)Conduct the audit and prepare the auditors report, utilizing the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.
(C)Contract with any qualified certified public accountant or public accountant, utilizing the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the local educational agency.
(D)Consistent with the limits described in subparagraph (B) of paragraph (1) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)The Controllers office shall consult with the governing board or body of the local educational agency, the auditors under contract to the local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(d)Notwithstanding any extension granted under subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under subparagraph (B) or (C) of paragraph (1) of subdivision (c).
(e)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than 15 calendar days from the due date established under Section 41020.
(f)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 18.Section 41020.3 of the Education Code is amended to read:41020.3.By January 31 of each year, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Sections 35145, 47604, and 47604.1.
SEC. 19.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by grade, month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study. Monthly enrollment shall be reported as the enrollment recorded on the last day of the school month, as that term is described in Section 37201.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(2)(A)Schedule of pupil attendance: schedule of pupil attendance by grade, month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.
(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.
(5)(A)Schedule of pupil-to-teacher ratio: for independent study programs at a school district, county office of education, or charter school, the schedule of pupil-to-teacher ratio, including, but not limited to, for each employee, their California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and numbers of pupils assigned to that teacher across the teachers assignment.
(B)For a charter school or an entity managing a charter school, as defined in Section 47604.1, that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(C)For independent study programs at school districts, county offices of education, or charter schools, provide a schedule of the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6.
(6)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.
(7)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.
(8)Schedule of expense of education: schedule of the calculation for the schools current expense of education, as defined in Section 41372.
(9)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.
(10)Schedule of funding determination thresholds: for nonclassroom-based charter schools, a schedule of the funding determination process thresholds, including the percent of revenue expended on certificated staff compensation, percent of revenue expended on instruction and related services, the pupil-to-teacher ratios, and the percent of unduplicated pupils enrolled compared to the counties served by the charter school.
(b)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling is required to be performed and selected, the auditor shall independently identify the sample and make that selection personally.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local educational agency pursuant to the test of compliance sample table in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable.
(D)For charter schools that are a component entity of a school district or county office of education, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.
(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.
(B)Charter schools that are a component entity of a school district or county office of education shall report charter school financial data separately from the general fund of the school district or county office of education, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county office of education. The auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment and residency: for nonclassroom-based instruction, verify enrollment and residency of pupils.
(B)Using appropriate sampling techniques, verify pupil enrollment and verify that a pupils residence is located within the jurisdiction of the county in which the chartering authority is located or an adjacent county, based on residency documentation provided by the parent or guardian of the pupil at the time of enrollment.
(C)State in a finding any inappropriately reported enrollment or residency identified.
(5)Chartering authority input: require auditors to consult with and interview the chartering authority for input and information, including a focus on fiscal and compliance areas that the charter school excels in or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: determining if a related entity, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.
(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.
(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.
(B)Verify the calculation of the schools current expense of education, and report any discrepancies as a finding.
(C)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(8)Payments: select a sample of all payments and verify that those payments are legal and have proper authorization. The sampling shall include, but not be limited to, payments obtained through credit card statements, debit card statements, other electronic payment methods and media, and bank statements.
(9)Nonclassroom-based charter school network: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school employs teachers who are required to provide instruction to pupils enrolled in nonclassroom-based charter schools other than the charter school holding the teachers employment contract.
(B)Whether the charter school has teachers who are required to provide instruction to pupils who attend another nonclassroom-based charter school.
(C)Whether the charter school is in a network of nonclassroom-based charter schools, as defined in Section 47634.3.
(D)If a determination is made pursuant to subparagraph (A), (B), or (C), identify the other nonclassroom-based charter schools and report these results to the chartering authority of the charter school and the department.
(10)Funding determination thresholds: for nonclassroom-based charter schools, determine all of the following:
(A)Whether the charter school submitted a determination of funding request to the state board.
(B)Whether the state board approved the determination of funding request.
(C)Whether the documentation provided to the state board is the same as the calculations in the funding determination audit schedule.
(D)Whether the charter school is complying with the thresholds included in the state board approved determination of funding.
(c)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 20.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section shall not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other laws.
SEC. 21.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other law, the auditor conducting an annual audit pursuant to Section 41020 shall, upon request, provide financial and compliance information to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)Information provided by an auditor to the chartering authority, a county superintendent of schools, the Controller, or the Superintendent pursuant to this section shall be submitted simultaneously to the named school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 22.Section 41341 of the Education Code is amended to read:41341.(a)(1)If, during any fiscal year, the amount apportioned to a school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one unit of average daily attendance, the Superintendent, in accordance with regulations that the Superintendent is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Superintendent pursuant this subdivision shall be added to or allowed from any portion of the State School Fund.
(2)Notwithstanding paragraph (1), excesses may be withheld or deficiencies added to apportionments on account of audit exceptions reported in an audit or review, as described in subdivision (e) of Section 41344, or audit or review conducted by a certified public accountant or public accounting firm designated by a governmental agency that provided the local educational agency the opportunity to provide a written response.
(3)If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one or more units of average daily attendance, the school district, county office of education, or charter school shall report the corrected amount to the Superintendent.
(b)If, during any fiscal year, the amount apportioned to a community college district or to any fund from Section B of the State School Fund differs either positively or negatively from the amount to which the community college district or fund was entitled, by an amount equal to the funding of one full-time equivalent student, the Chancellor of the California Community Colleges, in accordance with regulations that the chancellor is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Chancellor of the California Community Colleges under this subdivision shall be added to or allowed from any portion of the State School Fund.
SEC. 23.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other law, a local educational agency shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 24.Section 41372 of the Education Code is amended to read:41372.(a)For purposes of this section, the following definitions apply:
(1)Salaries of classroom teachers and teacher have the same meanings as defined in Section 41011 provided that the cost of all health and welfare benefits provided to the teachers by the school district or charter school are included within the meaning of salaries of classroom teachers.
(2)(A)Current expense of education means the gross total expended (not reduced by estimated income or estimated federal and state apportionments) for the purposes classified in the final budget of a school district or charter school (except one which, during the preceding fiscal year, had less than 101 units of average daily attendance) submitted to and approved by the county superintendent of schools pursuant to Section 42127 or 47604.33, as applicable, for certificated salaries other than certificated salaries for pupil transportation, food services, and community services; classified salaries other than classified salaries for pupil transportation, food services, and community services; employee benefits other than employee benefits for pupil transportation personnel, food services personnel, and community services personnel; books, supplies, and equipment replacement other than for pupil transportation and food services; and community services, contracted services, and other operating expenses other than for pupil transportation, food services, and community services.
(B)Current expense of education does not include expenditures classified as sites, buildings, books, and media and new equipment (object of expenditure 6000 of the California School Accounting Manual), the amount expended from categorical aid received from the federal or state government which funds were granted for expenditures in a program not incurring any teacher salary expenditures or requiring disbursement of the funds without regard to the requirements of this section, or expenditures for facility acquisition and construction, and does not include the amount expended pursuant to any lease agreement for plant and equipment or the amount expended from funds received from the federal government pursuant to the federal Economic Opportunity Act of 1964 or any extension of that act of Congress.
(b)There shall be expended during each fiscal year for payment of salaries of classroom teachers:
(1)By an elementary school district or elementary charter school, 60 percent of the school district districts or charter schools current expense of education.
(2)By a high school district or high school charter school, 50 percent of the school district districts or charter schools current expense of education.
(3)By a unified school district or charter school serving pupils in grades kindergarten and grades 1 to 12, inclusive, 55 percent of the school district districts or charter schools current expense of education.
(4)By a nonclassroom-based charter school, 40 percent of the charter schools current expense of education.
(c)If the county superintendent of schools having jurisdiction over the school district or charter school determines, on the basis of an audit conducted pursuant to Section 41020, that a school district or charter school has not expended the applicable percentage of current expense of education for the payment of salaries of classroom teachers during the preceding fiscal year, the county superintendent of schools shall, in apportionments made to the school district or charter school from the State School Fund after April 15 of the current fiscal year, designate an amount of this apportionment or apportionments equal to the apparent deficiency in school district or charter school expenditures. Any amount designated by the county superintendent of schools shall be deposited in the county treasury to the credit of the school district or charter school, but shall be unavailable for expenditure by the school district or charter school pending the determination to be made by the county superintendent of schools on any application for exemption that may be submitted to the county superintendent of schools. If it appears to the governing board of a school district or the governing body of a charter school that the application of this section during a fiscal year results in serious hardship to the school district or charter school, or in the payment of salaries of classroom teachers in excess of the salaries of classroom teachers paid by other school districts or charter schools of comparable type and functioning under comparable conditions, the governing board or body may apply to the county superintendent of schools in writing not later than September 15 of the succeeding fiscal year for exemption from the requirements of this section for the fiscal year on account of which the application is made. Upon receipt of this application, the county superintendent of schools shall grant the school district or charter school an exemption for any amount that is less than one thousand dollars ($1,000). If the amount is one thousand dollars ($1,000) or greater, the county superintendent of schools may grant an exemption from the requirements for the fiscal year on account of which the application is made. If the exemption is granted by the county superintendent of schools, the designated moneys shall be immediately available for expenditure by the governing board of the school district or the governing body of the charter school. If no application for exemption is made or exemption is denied, the county superintendent of schools shall order the designated amount or amount not exempted to be added to the amounts to be expended for salaries of classroom teachers during the next fiscal year.
(d)The county superintendent of schools shall enforce the requirements prescribed by this section, and may adopt necessary rules and regulations to that end.
SEC. 25.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares that continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low. To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(2)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(3)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions apply:
(1)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(2)Local educational agency means a school district, county office of education, charter school, or state special school.
(3)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract.
(4)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(5)System, unless the context requires otherwise, means the State Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Section 60900 for its functioning.
(6)Vacant position means a position to which a single designated certificated employee has not been assigned at the time that the data are collected by the department pursuant to Section 60900.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and properly assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those properly assigned and misassigned, at the schoolsite, local educational agency, county, and state levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county levels.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)A teacher of a course offered by a local educational agency in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
SEC. 26.Section 45037 of the Education Code is amended to read:45037.(a)Except as provided in Section 45036, for the fiscal year 2001-02 and for any fiscal year thereafter in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, the school district, county office of education, or charter school that the person is employed shall be assessed a penalty that shall be calculated as provided in subdivision (b) and withheld from state funding otherwise due to the school district, county office of education, or charter school.
(1)Notwithstanding Section 46300, the attendance of the noncertificated persons pupils during the period of service shall be included in the computation of average daily attendance.
(2)The noncertificated persons period of service shall not be excluded from the determination of eligibility for instruction time pursuant to Article 8 (commencing with Section 46200) of Chapter 2 of Part 26.
(b)(1)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, add the total number of schooldays on which the person rendered any amount of the service.
(2)For each person who rendered service in the employment of the school district, county office of education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, for a period of service during which the person did not have a valid certification document, add the number of schooldays on which the person rendered any amount of the service without a valid certification document.
(3)Divide the number determined in paragraph (2) by the number determined in paragraph (1) and carry the result to four decimal places.
(4)Multiply a school districts or charter schools local control funding formula grant apportionment for the fiscal year, calculated pursuant to Section 42238.02, as implemented by Section 42238.03, or a county office of educations local control funding formula alternative education grant computed pursuant to Section 2574, as apportioned pursuant to Section 2575, for the fiscal year, for the program in which the noncertificated person rendered service by the number determined in paragraph (3).
(c)Beginning in 200203, if a county office of education releases a warrant in favor of a person for whom a period of school district or charter school service is included in the calculation set forth in paragraph (2) of subdivision (b), and the warrant is either compensation for employment as a teacher or for employment in some other capacity if the county office of education has direct knowledge or is in possession of information giving rise to a reasonable inference that the person is rendering service as a teacher, the county office of education shall be assessed a penalty. The penalty assessed to a county office of education for any fiscal year in which one or more school district or charter school teachers did not have a valid certification document shall be equal to the lesser of three amounts as follows:
(1)Fifty percent of all penalties assessed for that fiscal year to all school districts or charter schools in the county office of educations jurisdiction pursuant to subdivision (b).
(2)One-half percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when two or fewer school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(3)One percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county office of educations county school service fund, when three or more school districts or charter schools in the county office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(d)Except as provided in Section 41344.1, nothing in this section may be waived in whole or in part.
SEC. 27.Section 45125.1 of the Education Code is amended to read:45125.1.(a)Any entity that has a contract with a local educational agency shall ensure that any employee who interacts with pupils, outside of the immediate supervision and control of the pupils parent or guardian or a school employee, pupils has a valid criminal records summary as described in Section 44237. When the contracting entity performs the criminal background check, it shall immediately provide any subsequent arrest and conviction information it receives to any local educational agency that it is contracting with pursuant to the subsequent arrest service.
(b)(1)This section does not apply to an entity providing services to a local educational agency, as described in subdivision (a), in an emergency or exceptional situation, such as when pupil health or safety is endangered or when repairs are needed to make school facilities safe and habitable.
(2)Notwithstanding subdivision (a), an employee of any entity that has a contract with a local educational agency, and that offers work experience opportunities for pupils, including, but not limited to, opportunities pursuant to Section 51760, 52336, 52372, 52410, or 52460, Article 1 (commencing with Section 52300), Article 5 (commencing with Section 52381), or Article 7 (commencing with Section 52450) of Chapter 9 of Part 28 of Division 4, Chapter 16.5 (commencing with Section 53070) of Part 28 of Division 4, Article 5 (commencing with Section 54690) of Chapter 9 of Part 29 of Division 4, or Part 54.5 (commencing with Section 88820) of Division 7 of Title 3, or workplace placements as part of a pupils individualized education program, including, but not limited to, the services described in Article 3 (commencing with Section 56470) of Chapter 4.5 of Part 30 of Division 4, is not required to have a valid criminal records summary pursuant to subdivision (a) if all of the following requirements are met:
(A)At least one adult employee in the workplace during the pupils work hours, who has direct contact with the pupil and has been designated by the employer as the employee of record who is responsible for the safety of the pupil, has a valid criminal records summary as described in Section 44237.
(B)A staff representative of the local educational agency makes visitations as specified in a pupils individualized education program, or, if unspecified, at least once every three weeks to consult with the pupils workplace liaison, observe the pupil at the workplace, and check in with the pupil to ensure the pupils health, safety, and welfare, including by addressing any concerns the pupil has raised.
(C)The parent or guardian of the pupil has signed a consent form regarding the pupils work placement, attesting that the parent or guardian understands the duties assigned to the pupil and the nature of the workplace environment.
(3)If a pupil participates in services provided by a contractor as part of an independent study program and the pupil is under the immediate supervision and control of the pupils parent or guardian during the provision of those services, the local educational agency shall do either of the following:
(A)Verify completion of a valid criminal records summary for all employees of the contractor who interact with the pupil.
(B)Ensure that the parent or guardian of the pupil has signed a consent form before the pupils interaction with a person employed by the contractor, attesting that the parent or guardian understands that the person employed by the contractor has not completed a valid criminal records summary as described in Section 44237.
(c)On a case-by-case basis, a local educational agency may require an entity with whom it has a contract to comply with the requirements of this section for employees in addition to those described in subdivision (a). The entity shall prepare and submit those employees fingerprints to the Department of Justice, as described in subdivision (a).
(d)(1)The Department of Justice shall ascertain whether the individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has been arrested or convicted of any crime insofar as that fact can be ascertained from information available to the Department of Justice. Upon implementation of an electronic fingerprinting system with terminals located statewide and managed by the Department of Justice, the Department of Justice shall ascertain the information required pursuant to this section within three working days. When the Department of Justice ascertains that an individual whose fingerprints were submitted to it pursuant to subdivision (a), (c), or (h) has a pending criminal proceeding for a felony as defined in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1, the Department of Justice shall notify the employer designated by the individual of that fact. The notification shall be delivered by telephone or email to the employer.
(2)The Department of Justice, at its discretion, may notify the local educational agencies in instances when the employee is defined as having a pending criminal proceeding described in Section 45122.1 or has been convicted of a felony as defined in Section 45122.1.
(3)The Department of Justice shall forward one copy of the fingerprints to the Federal Bureau of Investigation to verify any record of previous arrests or convictions of the applicant. The Department of Justice shall review the criminal record summary it obtains from the Federal Bureau of Investigation and shall notify the employer only as to whether or not an applicant has any convictions or arrests pending adjudication for offenses that, if committed in California, would have been punishable as a violent or serious felony. The Department of Justice shall not provide any specific offense information received from the Federal Bureau of Investigation. The Department of Justice shall provide written notification to the contract employer only concerning whether an applicant for employment has any conviction or arrest pending final adjudication for any of those crimes, as specified in Section 45122.1, but shall not provide any information identifying any offense for which an existing employee was convicted or has an arrest pending final adjudication.
(e)(1)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall not permit an employee to interact with pupils until the Department of Justice has ascertained that the employee has not been convicted of a felony as defined in Section 45122.1.
(2)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a felony if the employee has obtained a certificate of rehabilitation and pardon pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
(3)The prohibition in paragraph (1) does not apply to an employee solely on the basis that the employee has been convicted of a serious felony that is not also a violent felony if that employee can prove to the sentencing court of the offense in question, by clear and convincing evidence, that the employee has been rehabilitated for the purposes of schoolsite employment for at least one year. If the offense in question occurred outside this state, then the person may seek a finding of rehabilitation from the court in the local educational agency in which the employee is a resident.
(f)An entity having a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c) shall certify in writing to the local educational agency that neither the employer nor any of its employees who are required by this section to submit or have their fingerprints submitted to the Department of Justice and who may interact with pupils have been convicted of a felony as defined in Section 45122.1.
(g)Where reasonable access to the statewide electronic fingerprinting network is available, the Department of Justice may mandate electronic submission of the fingerprint cards and other information required by this section.
(h)(1)For purposes of this section, an individual operating as a sole proprietor of an entity that has a contract with a local educational agency, as described in subdivision (a), shall be considered an employee of that entity.
(2)To protect the safety of any pupil that may interact with an employee of an entity that is a sole proprietorship and has a contract as described in subdivision (a) or that is required to comply with this section for other employees pursuant to subdivision (c), a local educational agency shall prepare and submit the employees fingerprints to the Department of Justice, as described in subdivision (a).
(i)For purposes of this section, local educational agency means a school district, county office of education, or charter school.
SEC. 27.SEC. 28.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 28.SEC. 29.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)(A)Visit each charter schoolsite, resource center, meeting space, and satellite facility established by the charter school at least annually.
(B)Commencing July 1, 2028, annually attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and review the agendas and minutes of those meetings to monitor actions that may be taken.
(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)(A)Monitor the fiscal condition of each charter school under its authority.
(B)Commencing July 1, 2028, annually monitor payments of each charter school under its authority to verify that the payments are legal and have proper authorization. Monitoring shall include, but not be limited to, a review of credit statements, debit card statements, other electronic payment methods and media, and bank statements.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)A renewal of the charter is granted or denied.
(B)The charter is revoked.
(C)The charter school will cease operation for any reason.
(6)(A)Commencing July 1, 2028, annually verify all of the following for a nonclassroom-based charter school:
(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.
(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.
(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.
(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:
(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.
(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.
(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.
(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.
(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.
(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).
(7)Commencing July 1, 2028, a chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.
(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
SEC. 29.SEC. 30.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall revise regulations to require that charter schools report periodic and annual financial data in the same manner and on the same form prescribed for school districts in accordance with all of the following:
(a)Charter schools with an average daily attendance of 5,000 or more pupils and all nonclassroom-based charter schools shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year.
(b)Charter schools schools, excluding nonclassroom-based charter schools, with an average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year.
(c)Charter schools schools, excluding nonclassroom-based charter schools, with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.
SEC. 30.SEC. 31.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)(A)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph under either of the following conditions:
(i)The school district has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership.
(ii)For the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district pursuant to subdivision (h) of Section 41326, the school district has exited state receivership and has a qualified interim certification pursuant to Section 42131 or the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving the charter school would result in the school district having a qualified or negative interim certification pursuant to Section 42131.
(B)Charter schools proposed in a school district satisfying one of the conditions specified in subparagraph (A) shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by both the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated positions, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 31.SEC. 32.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(L)Admission policy and procedures, consistent with subdivision (e).
(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated positions in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 32.SEC. 33.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 33.SEC. 34.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize, except as provided in subdivision (d). A school district with an average daily attendance of fewer than 10,000 pupils shall not authorize one or more nonclassroom-based charter schools or approve a material revision to expand one or more existing nonclassroom-based charter schools if doing so would result in more than a totality of 100 percent of the average daily attendance of the school district authorizing the charter.
(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)Except as provided in subdivision (d), if the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
(d)(1)Notwithstanding subdivisions (a) and (c), a chartering authority that authorized a nonclassroom-based charter school in operation on or before December 31, 2025, and that exceeds the limits established in subdivision (a), may reauthorize and continue to be the chartering authority for that nonclassroom-based charter school if if, as of December 31, 2025, the chartering authority employs at least four full-time equivalent executive-level staff members who cover the whose primary responsibilities are related to all of the following job classifications and areas of employment:
(A)Superintendent.
(B)Chief business official.
(C)Human resources.
(D)Special education.
(E)Curriculum.
(2)Staff members who have the job responsibilities described in subparagraphs (A), (C), (D), and (E) of paragraph (1) shall hold an administrative credential issued by the Commission on Teacher Credentialing, as required by Section 35028.
SEC. 34.SEC. 35.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.
(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.
(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall include, but not be limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.
(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:
(1)Acting as the fiscal agent for the program.
(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.
(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.
(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.
(4)Facilitating an annual statewide conference for chartering authorities.
(5)Establishing and facilitating an advisory board, as provided in subdivision (e), to provide input on the development and full implementation of services provided by the program.
(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (e) to measure the programs continual improvement and program fidelity, and to document the programs impact.
(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:
(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.
(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.
(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.
(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.
(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.
(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.
(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:
(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.
(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.
(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.
(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.
(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:
(A)The role and functions of the advisory board.
(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.
(C)The terms of advisory board members.
(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.
(E)Meetings, including the frequency of meetings.
(F)The rules of order.
(G)The process for amending bylaws.
(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:
(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:
(i)Responsibility: the duty to serve the states pupils and the public.
(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.
(iii)Fairness: impartial and just treatment of all stakeholders.
(iv)Knowledge: understanding of charter school law and practice.
(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:
(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.
(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.
(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.
(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.
(e)On or before December 1, 2030, the Legislative Analysts Office shall complete and submit to the Governor and the appropriate education policy and budget committees of the Legislature an evaluation of the program. The Legislative Analysts Office shall evaluate the programs effectiveness in administering training programs, outreach, and the participation of chartering authorities that have not participated in trainings and conferences during previous years, and make recommendations regarding the continuation of funding.SEC. 35.SEC. 36.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder. The state board shall adopt regulations that apply Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 to charter schools. To the extent that these regulations concern the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)(1)Notwithstanding any other law and except as provided in paragraph (1) of subdivision (e), a charter school that has an approved charter may receive funding for nonclassroom-based instruction only if a determination for funding is made pursuant to Section 47634.2 by the state board. The determination for funding shall be subject to any conditions or limitations the state board may prescribe. The state board shall adopt regulations on or before January 1, 2027, that define and establish general rules governing nonclassroom-based instruction that apply to all charter schools and to the process for determining funding of nonclassroom-based instruction by charter schools offering nonclassroom-based instruction other than the nonclassroom-based instruction authorized by paragraph (1) of subdivision (e). Nonclassroom-based instruction includes, but is not limited to, independent study, home study, work study, workstudy, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(2)Except as provided in paragraph (2) of subdivision (b) of Section 47634.2, a charter school that receives a determination pursuant to subdivision (b) of Section 47634.2 is not required to reapply annually for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the state board. Notwithstanding any other law, the state board may require a charter school to provide updated information at any time it determines that a review of that information is necessary. The state board may terminate a determination for funding if updated or additional information requested by the state board is not made available to the state board by the charter school within 30 calendar days or if the information otherwise supports termination.
(3)A charter school that offers nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2 to receive funding each time its charter is renewed or materially revised pursuant to Section 47607. A charter school that materially revises its charter to offer nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2.
(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations pursuant to paragraph (1) of subdivision (d) specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of this part, virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.
(5)Notwithstanding any other law, the state board and the Superintendent shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 36.SEC. 37.Section 47612.7 of the Education Code is amended to read:47612.7.(a)Notwithstanding any other law and except as provided in subdivision (b), from January 1, 2020, to December 31, 2025, inclusive, the approval of a petition for the establishment of a new charter school, as defined in paragraph (2) of subdivision (e) of Section 47612.5, is prohibited.
(b)Subdivision (a) shall not apply to a nonclassroom-based charter school that was granted approval of its petition and providing educational services to pupils before October 1, 2019, under either of the following circumstances:
(1)If Assembly Bill 1507 of the 201920 Regular Session amends Section 47605.1 and becomes operative on January 1, 2020, and the charter school is required to submit a petition to the governing board of a school district or county board of education in an adjacent county in which its existing resource center is located in order to comply with Section 47605.1, as amended by Assembly Bill 1507 of the 201920 Regular Session, or to retain current program offerings or enrollment.
(2)If a charter school is required to submit a petition to a school district or county board of education in which a resource center is located in order to comply with the court decision in Anderson Union High School District v. Shasta Secondary Home School (2016) 4 Cal.App.5th 262, or other relevant court ruling, and the petition is necessary to retain current program offerings or enrollment.
(3)A charter school authorized by a different chartering authority pursuant to paragraphs (1) and (2) shall be regarded by the department as a continuing charter school for all purposes to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(c)Notwithstanding Section 33050 or any other law, the state board shall not waive the restrictions described in this section.
(d)(1)No later than October 1, 2023, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall study the processes used to determine funding for nonclassroom-based charter schools.
(2)The study shall identify and make recommendations on potential improvements to the processes, including recommendations for enhancing oversight and reducing fraud, waste, and abuse.
(3)No later than March 1, 2024, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall report to the appropriate fiscal and policy committees of the Legislature, the Department of Finance, the department, and the executive director of the state board on recommendations and observations as a result of the study. These recommendations or observations shall consider the fiscal impact on the state.
(e)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.
SEC. 37.Section 47613 of the Education Code is amended to read:47613.(a)(1)For the 202627 and 202728 fiscal years, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 1 percent of the revenue of the charter school.(2)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).(b)(1)For the 202829 fiscal year, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 2 percent of the revenue of the charter school.(2)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).(c)(1)Commencing July 1, 2029, and for each fiscal year thereafter, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 3 percent of the revenue of the charter school.(2)A local educational agency that is designated as the chartering authority pursuant to subdivision (b) or (c) of Section 47605.9, or pursuant to subparagraph (E) of paragraph (2) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to perform the oversight duties listed in Section 47604.32. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).(d)If a charter school is able to obtain substantially rent-free facilities from the chartering authority, the chartering authority may charge an additional fee not to exceed 2 percent of the revenue of the charter school.(e)This section does not prevent the charter school from separately purchasing administrative or other services from the chartering authority or any other source.(f)For purposes of this section, chartering authority means a school district, county board of education, or the state board, that granted the charter to the charter school or the governing board of a school district or county board of education that was designated as the chartering authority pursuant to subdivision (b) or (c) of Section 47605.9 or pursuant to paragraph (1) of subdivision (k) of Section 47605.(g)For purposes of this section, revenue of the charter school means the amount received in the current fiscal year from the local control funding formula calculated pursuant to Section 42238.02, as implemented by Section 42238.03.(h)For purposes of this section, costs of supervisorial oversight exclude costs incurred pursuant to Section 47607.3.SEC. 38.Section 47613 of the Education Code is amended to read:47613.(a)Except as set forth in subdivision (b), a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 1 percent of the revenue of the charter school.
(b)A (1)Except as set forth in subdivision (c), a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 3 percent of the revenue of the charter school if the charter school is able to obtain substantially rent free facilities from the chartering authority.
(c)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this subdivision may not be charged pursuant to subdivision (a) or (b).(2)Except as set forth in subdivision (c), a chartering authority may charge for the actual costs of supervisorial oversight of a charter school that exceeds 1 percent of the revenue of the charter school if the chartering authority is granted approval from the state board.
(c)Oversight fees shall not exceed 1 percent of the revenue of a charter school that is located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe.
(d)This section does not prevent the charter school from separately purchasing administrative or other services from the chartering authority or any other source.
(e)For purposes of this section, chartering the following definitions apply:
(1)Chartering authority means a school district, county board of education, or the state board, board that granted the charter to the charter school. school or the governing board of a school district or county board of education that was designated as the chartering authority.
(f)For purposes of this section, revenue(2)Revenue of the charter school means the amount received in the current fiscal year from the local control funding formula calculated pursuant to Section 42238.02, as implemented by Section 42238.03.
(g)(f)For purposes of this section, costs of supervisorial oversight include, but are not limited to, costs incurred pursuant to Section 47607.3.
SEC. 38.SEC. 39.Section 47613.3 is added to the Education Code, to read:47613.3.(a)A charter school shall comply with all of the following:
(1)For purposes of providing direct services to pupils, a charter school shall not expend public funds for a contract with a contractor, unless that contractor complies with both of the following requirements:
(A)The materials, programs, and organizations providing services are nonsectarian.
(B)The funds that would be used to pay for direct services to pupils are not used to pay tuition or fees at a private school.
(2)A charter school shall not offer any financial payments or gifts to a teacher, a pupil or prospective pupil, or to the parent or guardian of a pupil or prospective pupil for enrollment, referral, retention, participation in school meetings or activities, or participation in direct services to pupils by contractors.
(3)The salary and other income paid to an employee by a charter school or an entity managing a charter school, as defined by Section 47604.1, shall not depend on pupil attendance or pupil course completion.
(4)Management services, business services, marketing, and technology contract fees, including, but not limited to, an entity managing a charter school, as defined by Section 47604.1, shall not be calculated as a percentage of the revenue of the charter school, as defined in Section 47613.
(b)The extent of the charter schools compliance with subdivision (a) shall be reviewed and reported as part of the annual, independent financial audit that a charter school is required to transmit by December 15 of each year pursuant to Section 41020.
(c)The Controller shall include the items listed in paragraphs (1) to (4), inclusive, of subdivision (a) in the next revision of the audit guide.
(d)This section does not supersede or invalidate a contract that is in effect at the time this section becomes operative. If a contract is in effect at the time this section becomes operative, the contract shall remain in effect until the parties to the agreement negotiate a successor agreement. A memorandum of understanding shall not extend a contract that is in effect at the time this section becomes operative.
(e)This section shall become operative on July 1, 2026.
SEC. 39.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other law, and except as provided in paragraph (2), beginning July 1, 2026, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, as defined by paragraph (2) of subdivision (e) of Section 47612.5, including funding provided on the basis of average daily attendance pursuant to Section 42238.02, as modified by Section 42238.03, shall be adjusted by the Superintendent as follows:(A)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for at least 75 percent of their attendance, no adjustment shall be made to the reported average daily attendance used for funding their nonclassroom-based attendance.(B)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 60 percent and 74 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 7.5 percent.(C)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 40 percent and 59 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 15 percent.(D)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 20 percent and 39 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 22.5 percent.(E)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 0 percent and 19 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 30 percent.(2)Notwithstanding paragraph (1), an indirect-funded charter school authorized pursuant to Section 47605.5 shall not have an adjustment made to the reported average daily attendance used for funding their nonclassroom-based attendance.(3)This section does not authorize the Superintendent to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (e) of Section 47612.5.(4)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding pursuant to this subdivision.(b)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction, as defined in paragraph (2) of subdivision (e) of Section 47612.5, based on the percentages specified pursuant to subdivision (a).(c)Notwithstanding any other law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.SEC. 40.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other provision of law, through the 202526 fiscal year, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, as defined by paragraph (2) of subdivision (d) of Section 47612.5, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, 47634, and 47664, shall be adjusted by the State Board of Education. The State Board of Education shall state board.
(2)(A)Notwithstanding any other provision of law, for the 202627 fiscal year and each fiscal year thereafter, a charter school that offers less than 75 percent of the instructional time at the schoolsite and requires the attendance of all pupils for less than 75 percent of the minimum instructional time required to be offered shall have the amount of funding to be allocated on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, and 47664, adjusted by the state board.
(B)A charter school that offers 75 percent or more of the instructional time at the schoolsite and requires the attendance of all pupils for 75 percent or more of the minimum instructional time required to be offered shall not be required to submit a funding determination to the state board and shall receive full funding.
(C)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the state board in accordance with this section.
(b)(1)The state board shall adopt regulations setting forth criteria for the determination of funding for nonclassroom-based instruction, at a minimum the regulation instruction and shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the State Board of Education state board shall consider, among other factors it deems appropriate, the all of the following:
(A)The amount of the charter schools total budget expended on certificated employee salaries and benefits and on schoolsites, as defined in paragraph (3) of subdivision (d) of Section 47612.5, and the schoolsites.
(B)Whether the charter school serves 90 percent of the average unduplicated pupil count in comparison to the counties served.
(C)The current expense of education calculation.
(D)The teacher-to-pupil ratio in the school.
(2)For the 200102 fiscal year only, the amount of funding determined by the State Board of Education pursuant to this section shall not be less than 90 percent of the unadjusted amount to which a charter school would otherwise be entitled on the basis of average daily attendance.(3)For the 2002-03 fiscal year, the amount of funding determined by the State Board of Education pursuant to this section shall not be more than 80 percent of the unadjusted amount to which a charter school would otherwise be entitled, unless the State Board of Education determines that a greater or lesser amount is appropriate based on the criteria specified in paragraph (1) of subdivision (a).(4)For the 200304 fiscal year and each fiscal year thereafter, the amount of funding determined by the State Board of Education pursuant to this section shall not be more than 70 percent of the unadjusted amount to which a charter school would otherwise be entitled, unless the State Board of Education determines that a greater or lesser amount is appropriate based on the criteria specified in paragraph (1) of subdivision (a).(5)This section does not authorize the board to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) of Section 47612.5.(E)One-time state funds and expenses for facilities.
(F)Budget reserves.
(G)For charter schools that are part of a network of nonclassroom-based charter schools, the factors identified in subparagraphs (A), (C), and (D) using aggregate data from all charter schools in the network.
(b)(1)(2)The State Board of Education state board shall appoint an advisory committee to recommend criteria to the state board in accordance with this section if it has not done so by the effective date of the act adding this section. January 1, 2002. The advisory committee shall include, but is not limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent of Public Instruction. Superintendent.
(2)If a charter school submits a substantially complete request for a determination for funding by February 13, 2002, and the State Board of Education does not act on that request by March 19, 2002, full funding is automatically granted for the 200102 fiscal year, but the charter school shall reapply for a determination for funding for the 200203 fiscal year.(3)The determination for funding shall be on a percentage basis and the superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the State Board of Education.(4)If the State Board of Education denies request for a determination for funding or provides a reduction as authorized by subdivision (a), the board shall, in writing, give the reasons for its denial or reduction and, if appropriate, may describe how any deficiencies or problems may be addressed.(c)Commencing with the 202627 fiscal year, the state boards Advisory Commission on Charter Schools shall recommend to the state board the approval of a funding determination request submitted by a charter school consistent with all of the following:
(1)(A)Approval of the request at 70 percent if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 35 percent but less than 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 60 percent but less than 70 percent.
(iii)The percentage calculated for the unduplicated pupil count equals at least 70 percent but less than 80 percent as compared to the counties served by the charter school.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(2)(A)Approval of the request at 85 percent, unless there is a reasonable basis to recommend less, if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 70 percent but less than 80 percent.
(iii)The percentage calculated for the unduplicated pupil count equals at least 80 percent but less than 90 percent as compared to the counties served by the charter school.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying a percentage that is greater than 70 percent or if the recommended percentage is lower than the requested percentage, the reasons justifying the reduction, and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(3)(A)Approval of the request at 100 percent, unless there is a reasonable basis to recommend less, if all of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits equals at least 40 percent.
(ii)The percentage calculated for total expenditures on instruction and related services equals at least 80 percent.
(iii)The percentage calculated for the unduplicated pupil count equals at least 90 percent as compared to the counties served by the charter school.
(iv)The ratio of average daily attendance for independent study pupils to full-time certificated employees responsible for independent study does not exceed a pupil-teacher ratio of 25:1 or the equivalent ratio of pupils to full-time certificated employees for all other educational programs operated by the largest unified school district, as measured by average daily attendance, in the county or counties in which the charter school operates.
(B)If the recommended percentage made pursuant to this paragraph is lower than the requested percentage, the recommendation shall include the reasons justifying the reduction and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(4)(A)Due to the nonclassroom-based instruction not being substantially dedicated to the instructional benefit of the pupils, a denial of the request if one or more of the following criteria are met:
(i)The percentage calculated for certificated employee salaries and benefits is less than 35 percent.
(ii)The current expense of education is less than 40 percent.
(iii)The percentage calculated for total expenditures on instruction and related services is less than 60 percent.
(iv)The percentage calculated for the unduplicated pupil count equals less than 70 percent as compared to the counties served by the charter school.
(B)A recommendation made pursuant to this paragraph shall include the reasons justifying the denial and, if appropriate, a description of how any deficiencies or problems can be addressed by the charter school.
(d)Commencing with the 202627 fiscal year, all of the following shall apply:
(1)An approved determination of funding for a new charter school in its first year of operation shall be submitted by December 1 and shall be for two fiscal years. Within 90 days after the end of its first fiscal year of operation, a charter school shall submit unaudited actual expense reports and a funding determination form based on the charter schools actual second-year budget. If the Advisory Commission on Charter Schools determines that the actual expenditures of the charter school or the second-year funding determination form do not support the funding determination for the second year, the Advisory Commission on Charter Schools shall recommend that the state board revise the funding determination.
(2)(A)For charter schools that are part of a network of nonclassroom-based charter schools, a funding determination shall be for one year and shall be based on the aggregate data of all nonclassroom-based charter schools in the network. If a charter school already has a multiyear funding determination prior to being identified as part of a network, that determination shall be deemed invalid and the network shall submit documentation for a new funding determination.
(B)For nonclassroom-based charter schools that are not part of a network, funding determinations shall be set to align with the duration of the remainder of their charter pursuant to Sections 47605.9, 47607, and 47607.2. Nonclassroom-based charter schools shall apply for a funding determination concurrently with having their charter renewed.
(3)(A)Nonclassroom-based charter schools shall submit the financial documentation required for a funding determination to the department on an annual basis in the years between funding determinations.
(B)The state board shall make funding determinations based on a review of aggregate expenditure and revenue information from all years since the prior funding determination was made and shall reduce the funding accordingly.
(4)Data submitted by a charter school as part of its funding determination shall be consistent with its annual independent financial audit pursuant to Section 41020 for the year of the funding determination. If the information in the funding determination form is not consistent with the information reported in its annual independent financial audit, a charter school shall provide clarification and backup documents along with their form. A charter school shall concurrently submit its funding determination form to its chartering authority. The chartering authority shall review the form and notify the department of any concerns with the form, including, but not limited to, discrepancies with the data submitted.
(5)Any multiyear funding determination approved by the state board may be modified by the state board, including the terms of the multiyear approval and the funding authorized. The state board may terminate a determination of funding if updated or additional information requested by the department or the advisory committee pursuant to this section is not made available by a charter school within 30 calendar days or if credible information from any source supports termination. If credible information from a source supports termination, the charter school shall have 30 calendar days prior to the termination of funding to provide additional information to support the charter school's determination of funding.
(6)If a charter school is maintaining an unassigned fund balance for economic uncertainties that is 5 percent or less of the charter schools annual expenditures, the Superintendent shall notify the chartering authority of the charter school to investigate whether the charter school has sufficient reserves to address economic uncertainties.
(7)A charter school that is eligible for a funding determination based on the criteria pursuant to subparagraph (A) of paragraph (1) of subdivision (c) shall not be eligible for an increase in the funding determination based on mitigating circumstances.
(e)Commencing with the 202627 fiscal year, charter schools that submit a funding determination request shall adhere to all of the following:
(1)Exclude unspent one-time revenues that are permitted to be spent over multiple fiscal years from the calculations of the percentage of school revenues spent on instruction and related services if the charter school recognizes these revenues and expenditures in the year the funds are actually spent.
(2)May include any funds spent on resource centers or site-based instructional facilities operated by the charter school used primarily for purposes of in-person instruction and pupil support services, including, but not limited to, tutoring, counseling, special education services, libraries, and visual and performing arts facilities. A charter school shall provide the department with supporting documentation related to these costs.
(3)Report the amount and classification of its reserves on funding determination forms consistent with state accounting categories of assigned, unassigned, restricted, committed, and nonspendable.
(4)Exclude from the revenue any net increase to the reserve for economic uncertainties if the charter school has an unassigned fund balance that represents less than 10 percent of their annual expenditures.
(5)If applicable, explain on the funding determination form the purposes for which unassigned fund balances are being maintained at a level that is 10 percent or more of the charter schools annual expenditures.
(f)This section does not authorize the state board to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) of Section 47612.5.
(c)(g)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent of Public Instruction for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction as defined in paragraph (2) of subdivision (d) of Section 47612.5. instruction.
(d)(h)Notwithstanding any other provision of law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
(i)For purposes of this section, the following definitions apply:
(1)Current expense of education has the same meaning as defined in subdivision (b) of Section 41372.
(2)Network of nonclassroom-based charter schools has the same meaning as defined in subdivision (b) of Section 47634.3.
(3)Nonclassroom-based instruction has the same meaning as defined in paragraph (2) of subdivision (e) of Section 47612.5.
(4)Pupil-teacher ratio has the same meaning as described in Section 51745.6.
(5)Schoolsite has the same meaning as described in paragraph (3) of subdivision (e) of Section 47612.5.
SEC. 41.Section 47634.3 is added to the Education Code, to read:47634.3.(a)Beginning with the 202728 school year, the department shall annually develop a list that identifies networks of nonclassroom-based charter schools, as described in this section, based on data from the prior school year.
(b)For purposes of this section, a network of nonclassroom-based charter schools means two or more nonclassroom-based charter schools, as defined pursuant to paragraph (2) of subdivision (e) of Section 47612.5, that meet one or more of the following:
(1)Employ teachers that teach pupils enrolled at schools other than the charter school holding the teachers employment contract or employ teachers at more than one local educational agency.
(2)Have a shared management structure, such as having supervisors and managers who typically function on a regional multischool level and oversee, evaluate, and discipline teachers across multiple schools.
(3)Have contracts with the same vendor totaling at least 40 percent of the schools annual total revenue.
SEC. 40.SEC. 42.Section 51745.6 of the Education Code is amended to read:51745.6.(a)The ratio of average daily attendance for independent study pupils 18 years of age or less to school district, county office of education, or charter school full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall comply with one of the following:
(1)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(2)It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(3)It shall be calculated by using a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio. All pupils of the school district, county office of education, or charter school, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575, for county offices of education, and Section 42238.05, for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 41.SEC. 43.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 42.SEC. 44.Section 51748 of the Education Code is amended to read:51748.School districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district, charter school, or county board of education by grade level, program placement, and the school in which the pupil is enrolled.
SEC. 43.SEC. 45.Section 51749.7 is added to the Education Code, immediately following Section 51749.6, to read:51749.7.(a)A local educational agency shall not allocate, or advertise the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are not provided by a credentialed employee of the local educational agency for the pupil and that are paid for by the local educational agency.
(b)It is the intent of the Legislature that this section does not apply to expanded learning opportunities programs.
SEC. 44.SEC. 46.Section 60119 of the Education Code is amended to read:60119.(a)In order to be eligible to receive funds available for purposes of this article, the governing board of a school district or the governing body of a charter school shall take the following actions:
(1)(A)The governing board of a school district or the governing body of a charter school shall hold a public hearing or hearings at which the governing board or body shall encourage participation by parents, teachers, members of the community interested in the affairs of the school district or charter school, and bargaining unit leaders, and shall make a determination, through a resolution, as to whether each pupil in each school in the school district or charter school has sufficient textbooks or instructional materials, or both, that are aligned to the content standards adopted by the state board in each of the following subjects, as appropriate, that are consistent with the content and cycles of the curriculum framework adopted by the state board:
(i)Mathematics.
(ii)Science.
(iii)History-social science.
(iv)English language arts, including the English language development component of an adopted program.
(B)The public hearing shall take place on or before the end of the eighth week from the first day pupils attend school for that year. A school district or charter school that operates schools on a multitrack, year-round calendar shall hold the hearing on or before the end of the eighth week from the first day pupils attend school for that year on any tracks that begin a school year in August or September.
(C)As part of the hearing required pursuant to this section, the governing board of a school district or the governing body of a charter school also shall make a written determination as to whether each pupil enrolled in a world language or health course has sufficient textbooks or instructional materials that are consistent with the content and cycles of the curriculum frameworks adopted by the state board for those subjects. The governing board of a school district or the governing body of a charter school also shall determine the availability of laboratory science equipment as applicable to science laboratory courses offered in grades 9 to 12, inclusive. The provision of the textbooks, instructional materials, or science equipment specified in this subparagraph is not a condition of receipt of funds provided by this subdivision.
(2)(A)If the governing board of a school district or the governing body of a charter school determines that there are insufficient textbooks or instructional materials, or both, the governing board or body shall provide information to classroom teachers and to the public setting forth, in the resolution, for each school in which an insufficiency exists, the percentage of pupils who lack sufficient standards-aligned textbooks or instructional materials in each subject area and the reasons that each pupil does not have sufficient textbooks or instructional materials, or both, and take any action, except an action that would require reimbursement by the Commission on State Mandates, to ensure that each pupil has sufficient textbooks or instructional materials, or both, within two months of the beginning of the school year in which the determination is made. The governing board or body shall submit a copy of the resolution to the county superintendent of schools no later than three business days after the governing board or body hearing.
(B)In carrying out subparagraph (A), the governing board of a school district or the governing body of a charter school may use moneys in any of the following funds:
(i)Any funds available for textbooks or instructional materials, or both, from categorical programs, including any funds allocated to school districts or charter schools that have been appropriated in the annual Budget Act.
(ii)Any funds of the school district or charter school that are in excess of the amount available for each pupil during the prior fiscal year to purchase textbooks or instructional materials, or both.
(iii)Any other funds available to the school district or charter school for textbooks or instructional materials, or both.
(b)The governing board of a school district or the governing body of a charter school shall provide 10 days notice of the public hearing or hearings set forth in subdivision (a). The notice shall contain the time, place, and purpose of the hearing and shall be posted in three public places in the school district or charter school. The hearing shall be held at a time that will encourage the attendance of teachers and parents and guardians of pupils who attend the schools in the school district or charter school and shall not take place during or immediately following school hours.
(c)(1)For purposes of this section, sufficient textbooks or instructional materials means that each pupil, including English learners, has a standards-aligned textbook or instructional materials, or both, to use in class and to take home. This paragraph does not require two sets of textbooks or instructional materials for each pupil. The materials may be in a digital format as long as each pupil, at a minimum, has and can access the same materials in the class and to take home, as all other pupils in the same class or course in the school district or charter school and has the ability to use and access them at home.
(2)Sufficient textbooks or instructional materials as defined in paragraph (1) do not include photocopied sheets from only a portion of a textbook or instructional materials copied to address a shortage.
(d)The governing board of a school district or the governing body of a charter school that receives funds for instructional materials from any state source is subject to the requirements of this section.
(e)For the purpose of transitioning to instructional materials that are aligned with the common core academic content standards and science content standards, it is the intent of the Legislature that textbooks, instructional materials, and supplemental instructional materials be deemed to be aligned with the content standards pursuant to subdivisions (a) and (c), and be deemed consistent with the content and cycles of the curriculum framework adopted by the state board pursuant to subdivision (a) if the textbooks, instructional materials, supplemental instructional materials, or a combination of any such materials are aligned to the content standards adopted pursuant to Section 60605 or 60605.8, or former Section 60605.85, as that section read on June 30, 2014.
SEC. 45.SEC. 47.Section 20110 of the Public Contract Code is amended to read:20110.(a)The provisions of this part shall apply to contracts awarded by school districts subject to Part 21 (commencing with Section 35000) of Division 3 of Title 2 of the Education Code.
(b)(1)This article shall also apply to contracts awarded by a charter school established pursuant to Part 26.8 (commencing with Section 47600) of Division 4 of Title 2 of the Education Code.
(2)For purposes of this article, a charter school shall be deemed a school district and the governing body of a charter school shall be deemed the governing board of a school district, and a reference to a school district or the governing board of a school district shall be deemed to also reference a charter school or the governing body of a charter school, as applicable.
SEC. 46.SEC. 48.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year.
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts, educational joint powers authorities, county superintendents of schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the Standards for Audits of Governmental Organizations, Programs, Activities, and Functions generally accepted government auditing standards promulgated by the Comptroller General of the United States. States Government Accountability Office. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation or both and includes the verification of each of the following:
(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(C)Teacher misassignments pursuant to Section 44258.9.
(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126.
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14503 of the Education Code is amended to read:14503.(a)Financial and compliance audits shall be performed in accordance with General Accounting Office standards the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
(b)(1)An independent auditor shall not engage in financial or compliance audits unless, commencing after the first audit, and every three years thereafter, the auditor completes a quality control review conducted by the Controller in accordance with the generally accepted government auditing standards promulgated by the United States General Accounting Office standards. Government Accountability Office. The time period between commencement of the second and successive quality control review and completion of a subsequent quality control review shall be calculated from the first day of the month following commencement of the completion of the preceding quality control review.
(2)If an independent auditor has not engaged in financial or compliance audits for three or more consecutive years, the Controller shall conduct a quality control review after the auditor completes the first financial or compliance audit.
SEC. 6.Section 14504 of the Education Code is amended to read:14504.To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors. The Controller shall determine whether audit reports are in conformance with reporting provisions of subdivision (a) of Section 14503 and shall notify each local educational agency, the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent, the Department of Finance, and the auditor regarding each determination. The local educational agency, the chartering authority, the county superintendent of schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
SEC. 7.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a local educational agency was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of the Controllers reviews to the entity that referred the independent auditor to the Controller, the independent auditor, and the local educational agency for which the audit was performed, and shall review the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)In performing quality control reviews, the Controller shall ensure that the selection of audits for each auditor undergoing a quality control review is representative of each type of local educational agency for which an auditor performs audits and shall ensure that reviewers have relevant experience with financial or compliance audits of local educational agencies.
(c)(1)The Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for a local educational agency for the prior three fiscal years if any of the following circumstances exists:
(A)The school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24 of Division 3 of Title 2.
(B)The budget of the school district, educational joint powers authority, or county superintendent of schools is disapproved or the school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(C)The responsible county superintendent of schools or the Superintendent has otherwise determined that a lack of going concern exists for the school district, educational joint powers authority, or county superintendent of schools pursuant to Sections 1630 and 42127.6.
(2)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(d)The Controller shall conduct a quality control review after an authorized certified public accountant or public accountant listed in the Certified Public Accountants Directory Service (1) completes its first local educational agency financial statement and compliance audit or (2) completes its first local educational agency financial statement and compliance audit after three or more years of not having completed an audit.
(e)The Controller shall conduct a quality control review every three years to ensure that all certified public accountant firms are periodically reviewed.
(f)In any matter that is referred to the California Board of Accountancy under subparagraph (A) of paragraph (1) of subdivision (c), the Controller may suspend the independent auditor from performing any local educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local educational agency under subdivision (c). The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(g)The county superintendent of schools, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local educational agency to the California Board of Accountancy for action described in paragraph (2) of subdivision (c) if any of the following circumstances exists:
(1)An audit of a local educational agency was conducted in a manner that may constitute unprofessional conduct as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
(3)The continuing education and prior experience requirements of Section 41020 are not met.
SEC. 8.Section 14505 of the Education Code is amended to read:14505.(a)The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(1)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(2)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to reporting provisions of subdivision (a) of Section 14503.
(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(c)If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits that are necessary to carry out the Controllers duties and responsibilities pursuant to this code and the Government Code. This chapter does not authorize a local educational agency, or a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out additional audits. To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid unnecessary duplication of audit efforts. In performing additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the local educational agency for the costs of these additional audits.
SEC. 10.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the Superintendent on or before June 30 of each year in order to apprise the Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the Superintendent. Before issuing the report, the Controller shall allow each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting that local educational agency.
SEC. 11.Section 14508 of the Education Code is amended to read:14508.The Controller shall submit a report to the Legislature on or before June 30 of each year regarding any recommendations made to the Superintendent pursuant to Section 14507.
SEC. 12.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (o) of Section 41020.
SEC. 13.Section 17604 of the Education Code is amended to read:17604.(a)Wherever in this code the power to contract is invested in the governing board of the school district, the governing body of a charter school, or any member thereof, the power may, by a majority vote of the governing board or body, be delegated to its district superintendent or charter school administrator, or to any persons that the district superintendent or charter school administrator may designate, or if there is no district superintendent or charter school administrator, then to any other officer or employee of the school district or charter school that the governing board or body may designate. The delegation of power may be limited as to time, money, or subject matter or may be a blanket authorization in advance of its exercise, all as the governing board or body may direct. A contract made pursuant to the delegation and authorization shall not be valid or constitute an enforceable obligation against the school district or charter school unless the same shall have been approved or ratified by the governing board or body, the approval or ratification to be evidenced by a motion of the governing board or body duly passed and adopted.
(b)In the event of malfeasance in office, the school district or charter school official invested by the governing board or body with the power of contract shall be personally liable to the school district or charter school employing the official for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 14.Section 17605 of the Education Code is amended to read:17605.(a)The governing board or body, by majority vote, may adopt a rule, delegating to any officer or employee of the school district or charter school as the governing board or body may designate, the authority to purchase supplies, materials, apparatus, equipment, and services. A rule shall not authorize an officer or employee to make any purchases involving an expenditure by the school district or charter school in excess of the amount specified by Section 20111 of the Public Contract Code. The rule shall prescribe the limits of the delegation as to time, money, and subject matter. All transactions entered into by the officer or employee of the school district or charter school shall be reviewed by the governing board or body every 60 days.
(b)In the event of malfeasance in office, the school district or charter school officer or employee invested by the governing board or body with the power to contract shall be personally liable for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 15.Section 33309.5 is added to the Education Code, to read:33309.5.(a)The Office of the Education Inspector General is hereby established in the department. The Education Inspector General shall be appointed by the Governor, subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the Superintendent. state board. The Superintendent state board shall not prevent or prohibit the Education Inspector General from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(b)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising audits and investigations relating to the programs and operations of the department and local educational agencies.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department and local educational agencies.
(3)Providing a means for keeping the Superintendent state board and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department and local educational agencies, and the necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(c)For purposes of this section, local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SEC. 16.Section 41020 of the Education Code is amended to read:41020.(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)It is the further intent of the Legislature that all charter schools be audited.
(b)(1)(A)On or before May 1 of each fiscal year, the governing board of each school district or educational joint powers authority shall either provide for an audit of all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the school district or educational joint powers authority to provide for that auditing.
(B)A contract to perform the audit of a school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. An Except as provided in clause (ii) of subparagraph (B), an independent audit shall be separately conducted and reported for each charter school that is assigned a County-District-School code.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Financial Notwithstanding subparagraph (A) of paragraph (2), financial data for charter schools that are a component entity of a school district or county offices office of education shall be presented separately in the applicable audit report as if the financial data of the charter school represents a major fund. fund, and not as a separately conducted and reported audit.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Superintendent to provide for that auditing.
(c)If the governing board of a school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (b) has not provided for an audit of the books and accounts of the local educational agency by April 1, one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Superintendent shall provide for the audit.
(d)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(e)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
(f)Each audit conducted in accordance with this section shall include all of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency.
(2)An audit of pupil attendance procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 or, for a charter school, Section 47606.5.
(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(h)(1)The cost of an audit provided for by a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Superintendent for a county superintendent of schools shall be paid by the Superintendent and the Superintendent shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(4)The cost of an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of a county superintendent of schools shall be paid from the county school service fund.
(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(4)(A)(i)Commencing with the 202627 fiscal year, and every two years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall complete 24 hours of continuing education in governmental accounting, auditing, or related subjects specific to local educational agencies and the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting. The continuing education shall include both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include pupil attendance, independent study, charter schools, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education units taken as part of the California Board of Accountancy licensure requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202627 fiscal year, certified public accountant firms, certified public accountants or public accountants and audit staff that conduct audits of local educational agencies shall comply with both of the following:
(i)Have certified prior experience conducting financial and compliance audits for local educational agencies.
(ii)Have been peer reviewed by the California Board of Accountancy to ensure that the selection of audits for each auditor undergoing a peer review is representative of each type of local educational agency for which an auditor performs audits and the reviewers have relevant experience with financial or compliance audits of local educational agencies.
(C)The continuing education units and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)Auditors that are under contract with a local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(7)Auditors that conduct audits of local educational agencies shall share work papers and draft audit reports upon request by the local educational agency or a successor auditor of the local educational agency.
(8)A successor auditor of a local educational agency shall request all work papers and draft audit reports in the event that the previous auditor is terminated or otherwise denied for renewal.
(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(k)(1)On or before December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the Superintendent, and the Controller.
(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Upon submission of the final audit report to the governing board of each school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the school district or educational joint powers authority, the county superintendent of schools shall do all of the following:
(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the school district or educational joint powers authority and request the governing board of the school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction before March 15.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, on or before May 15, that the county superintendent of schools staff has reviewed all audits of school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(4)In the audit of a school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county superintendent of schools and the Superintendent and restate the exception in the audit report. After receiving that notification, the Superintendent shall either consult with the school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before March 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before April 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance related attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)If the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before April 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance related attendance-related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report and shall immediately notify the appropriate chartering authority and the county superintendent of schools of the county in which the charter school is located.
(ii)After receiving notification pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)If the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report and shall immediately notify the Superintendent.
(ii)After receiving notification pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report submitted to a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction before March 15 if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools or chartering authority certifies as of May 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools or chartering authority to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to chartering authorities, the county superintendent of schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(s)Audits of regional occupational centers and programs are subject to this section.
(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accord with Government Accounting Standards, as published by accordance with the generally accepted government auditing standards promulgated by the United States General Accounting Accountability Office.
SEC. 17.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(2)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(b)(1)(A)(i)The county superintendent of schools or chartering authority may, after consultation with the governing board or body of the local educational agency and the auditors under contract to the local educational agency, and with the consent of the Controllers office and the Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(ii)As applicable pursuant to subdivision (a), the Superintendent may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(B)Extensions granted pursuant to this subdivision shall be the shortest amount of time reasonable given the extenuating circumstances justifying an extension, shall be in increments no greater than 45 calendar days, and shall not exceed a total of 90 calendar days from the due date established under Section 41020.
(2)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent, may, after consultation with the governing board or body of a local educational agency, the auditors under contract to the local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the local educational agency. The county superintendent of schools, chartering authority, or Superintendent, shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(3)As applicable pursuant to subdivision (a), the county superintendent of schools, chartering authority, or Superintendent may request the Controllers office to investigate the situation and initiate action as provided in subdivision (c).
(c)(1)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may do any of the following:
(A)Accept the action of the county superintendent of schools, chartering authority, or Superintendent permitted by subdivision (b).
(B)Conduct the audit and prepare the auditors report, utilizing the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.
(C)Contract with any qualified certified public accountant or public accountant, utilizing the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the local educational agency.
(D)Consistent with the limits described in subparagraph (B) of paragraph (1) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
(2)The Controllers office shall consult with the governing board or body of the local educational agency, the auditors under contract to the local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(d)Notwithstanding any extension granted under subdivision (b) or subparagraph (D) of paragraph (1) of subdivision (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under subparagraph (B) or (C) of paragraph (1) of subdivision (c).
(e)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than seven 15 calendar days from the due date established under Section 41020.
(f)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 18.Section 41020.3 of the Education Code is amended to read:41020.3.By January 31 of each year, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Sections 35145, 47604, and 47604.1.
SEC. 19.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by grade, month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study. Monthly enrollment shall be reported as the enrollment recorded on the last day of the school month, as that term is described in Section 37201.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(2)(A)Schedule of pupil attendance: schedule of pupil attendance by grade, month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.
(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.
(5)(A)Schedule of pupil-to-teacher ratio: for independent study programs at a school district, county office of education, or charter school, the schedule of pupil-to-teacher ratio, including, but not limited to, for each employee, their name, title, California Longitudinal Pupil Achievement Data System unique identifier number, percentage of full-time equivalent, credential, names of all employing local educational agencies, and numbers of pupils assigned to that teacher across the teachers assignment.
(B)For a charter school or an entity managing a charter school, as defined in Section 47604.1, that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(C)For independent study programs at school districts, county offices of education, or charter schools, provide a schedule of the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6.
(6)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.
(7)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.
(8)Schedule of expense of education: schedule of the calculation for the schools current expense of education, as defined in Section 41372.
(9)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.
(b)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling is required to be performed and selected, the auditor shall independently identify the sample and make that selection personally.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local education agency. educational agency pursuant to the test of compliance sample table in the Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable.
(D)For charter schools that are a component entity of a school district or county superintendent of schools, office of education, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.
(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.
(B)Charter schools that are a component entity of a school district or county superintendent of schools office of education shall report charter school financial data separately from the general fund of the school district or county superintendent of schools, office of education, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county superintendent of schools. office of education. The auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment: Enrollment and residency: for nonclassroom-based instruction, verify enrollment and residency of pupils.
(B)Using appropriate sampling techniques, verify pupil enrollment, including obtaining a written confirmation from the parent or guardian of a pupil, emancipated pupil, or other custodian of pupil, or, in the case of a pupil over 18 years of age, from the pupil, enrolled. enrollment and verify that a pupils residence is located within the jurisdiction of the county in which the chartering authority is located or an adjacent county, based on residency documentation provided by the parent or guardian of the pupil at the time of enrollment.
(C)State in a finding any inappropriately reported enrollment or residency identified.
(5)Chartering authority input: require auditors to consult with and interview the chartering authority for input and information, including a focus on fiscal and compliance areas that the charter school excels in or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: determining if a related entity, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.
(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.
(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.
(B)Verify the calculation of the schools current expense of education, and report any discrepancies as a finding.
(C)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(8)Payments: select a sample of all payments and verify that those payments are legal and have proper authorization. The sampling shall include, but not be limited to, payments obtained through credit card statements, debit card statements, other electronic payment methods and media, and bank statements.
(c)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 20.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section shall not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other laws.
SEC. 21.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other law, the auditor conducting an annual audit pursuant to Section 41020 shall, upon request, provide financial and compliance information to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)Information provided by an auditor to the chartering authority, a county superintendent of schools, the Controller, or the Superintendent pursuant to this section shall be submitted simultaneously to the named school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 22.Section 41341 of the Education Code is amended to read:41341.(a)(1)If, during any fiscal year, the amount apportioned to a school district district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one unit of average daily attendance, the Superintendent, in accordance with regulations that the Superintendent is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Superintendent pursuant this subdivision shall be added to or allowed from any portion of the State School Fund.
(2)Notwithstanding paragraph (1), excesses may be withheld or deficiencies added to apportionments on account of audit exceptions reported in an audit or review, as described in subdivision (e) of Section 41344, or audit or review conducted by a certified public accountant or public accounting firm designated by a governmental agency that provided the local educational agency the opportunity to provide a written response.
(3)If, during any fiscal year, a school district, county office of education, or charter school determines that the amount apportioned to the school district, county office of education, charter school, or to any fund from Section A of the State School Fund differs either positively or negatively from the amount to which the school district, county office of education, charter school, or fund was entitled by an amount equal to the local control funding formula allocation pursuant to Section 2574 or 42238.02, as implemented pursuant to Section 42238.03, for one or more units of average daily attendance, the school district, county office of education, or charter school shall report the corrected amount to the Superintendent.
(b)If, during any fiscal year, the amount apportioned to a community college district or to any fund from Section B of the State School Fund differs either positively or negatively from the amount to which the community college district or fund was entitled, by an amount equal to the funding of one full-time equivalent student, the Chancellor of the California Community Colleges, in accordance with regulations that the chancellor is hereby authorized to adopt, not later than the first succeeding fiscal year from the fiscal year in which the computational error was made, shall withhold from, or add to, the apportionment made during that fiscal year, the amount of the excess or deficiency, as the case may be. Notwithstanding any other provision of this code to the contrary, excesses withheld or deficiencies added by the Chancellor of the California Community Colleges under this subdivision shall be added to or allowed from any portion of the State School Fund.
SEC. 22.SEC. 23.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other law, a local educational agency shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 24.Section 41372 of the Education Code is amended to read:41372.(a)For purposes of this section: section, the following definitions apply:
(a)(1)Salaries of classroom teachers and teacher shall have the same meanings as prescribed by defined in Section 41011 provided, however, provided that the cost of all health and welfare benefits provided to the teachers by the school district shall be or charter school are included within the meaning of salaries of classroom teachers.
(b)(2)(A)Current expense of education means the gross total expended (not reduced by estimated income or estimated federal and state apportionments) for the purposes classified in the final budget of a school district or charter school (except one which, during the preceding fiscal year, had less than 101 units of average daily attendance) submitted to and approved by the county superintendent of schools pursuant to Section 42127 or 47604.33, as applicable, for certificated salaries other than certificated salaries for pupil transportation, food services, and community services; classified salaries other than classified salaries for pupil transportation, food services, and community services; employee benefits other than employee benefits for pupil transportation personnel, food services personnel, and community services personnel; books, supplies, and equipment replacement other than for pupil transportation and food services; and community services, contracted services, and other operating expenses other than for pupil transportation, food services, and community services. Current
(B)Current expense of education, for purposes of this section shall education does not include those expenditures classified as sites, buildings, books, and media and new equipment (object of expenditure 6000 of the California School Accounting Manual), the amount expended from categorical aid received from the federal or state government which funds were granted for expenditures in a program not incurring any teacher salary expenditures or requiring disbursement of the funds without regard to the requirements of this section, or expenditures for facility acquisition and construction; construction, and shall does not include the amount expended pursuant to any lease agreement for plant and equipment or the amount expended from funds received from the federal government pursuant to the federal Economic Opportunity Act of 1964 or any extension of this that act of Congress.
There(b)There shall be expended during each fiscal year for payment of salaries of classroom teachers:
(1)By an elementary school district, district or elementary charter school, 60 percent of the districts school district or charter schools current expense of education.
(2)By a high school district, district or high school charter school, 50 percent of the districts school district or charter schools current expense of education.
(3)By a unified school district, district or charter school serving pupils in grades kindergarten and grades 1 to 12, inclusive, 55 percent of the districts school district or charter schools current expense of education.
(4)By a nonclassroom-based charter school, 40 percent of the charter schools current expense of education.
If(c)If the county superintendent of schools having jurisdiction over the school district or charter school determines, on the basis of an audit conducted pursuant to Section 41020, that a school district or charter school has not expended the applicable percentage of current expense of education for the payment of salaries of classroom teachers during the preceding fiscal year, the county superintendent of schools shall, in apportionments made to the school district or charter school from the State School Fund after April 15 of the current fiscal year, designate an amount of this apportionment or apportionments equal to the apparent deficiency in school district or charter school expenditures. Any amount designated by the county superintendent of schools shall be deposited in the county treasury to the credit of the school district, district or charter school, but shall be unavailable for expenditure by the school district or charter school pending the determination to be made by the county superintendent of schools on any application for exemption which that may be submitted to the county superintendent of schools. If it appears to the governing board of a school district or the governing body of a charter school that the application of the preceding paragraphs of this section during a fiscal year results in serious hardship to the district, school district or charter school, or in the payment of salaries of classroom teachers in excess of the salaries of classroom teachers paid by other school districts or charter schools of comparable type and functioning under comparable conditions, the governing board or body may apply to the county superintendent of schools in writing not later than September 15th 15 of the succeeding fiscal year for exemption from the requirements of the preceding paragraphs of this section for the fiscal year on account of which the application is made. Upon receipt of this application, the county superintendent of schools shall grant the school district or charter school an exemption for any amount that is less than one thousand dollars ($1,000). If the amount is one thousand dollars ($1,000) or greater, the county superintendent of schools may grant an exemption from the requirements for the fiscal year on account of which the application is made. If the exemption is granted by the county superintendent of schools, the designated moneys shall be immediately available for expenditure by the governing board of the school district or the governing board. body of the charter school. If no application for exemption is made or exemption is denied, the county superintendent of schools shall order the designated amount or amount not exempted to be added to the amounts to be expended for salaries of classroom teachers during the next fiscal year.
The(d)The county superintendent of schools shall enforce the requirements prescribed by this section, and may adopt necessary rules and regulations to that end.
SEC. 23.SEC. 25.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares that continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low. To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state level. levels. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(2)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(3)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions apply:
(1)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(2)Local educational agency means a school district, county office of education, charter school, or state special school.
(3)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract.
(4)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(5)System, unless the context requires otherwise, means the State Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Section 60900 for its functioning.
(6)Vacant position means a position to which a single-designated single designated certificated employee has not been assigned at the time that the data are collected by the department pursuant to Section 60900.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 11495), 114-95), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and properly assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those properly assigned and misassigned, at the schoolsite, local educational agency, county, and state level. levels. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county level. levels.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)A teacher of a course offered by a local educational agency in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
SEC. 26.Section 45037 of the Education Code is amended to read:45037.(a)Except as provided in Section 45036, for the fiscal year 2001-02 and for any fiscal year thereafter in which a person renders service as a teacher in kindergarten or any of grades 1 to 12, inclusive, who does not have a valid certification document, the school district or district, county office of education in which education, or charter school that the person is employed shall be assessed a penalty that shall be calculated as provided in subdivision (b) and withheld from state funding otherwise due to the district or school district, county office of education. education, or charter school.
(1)Notwithstanding Section 46300, the attendance of the noncertificated persons pupils during the period of service shall be included in the computation of average daily attendance.
(2)The noncertificated persons period of service shall not be excluded from the determination of eligibility for instruction time pursuant to Article 8 (commencing with Section 46200) of Chapter 2 of Part 26.
(b)(1)For each person who rendered service in the employment of the district or school district, county office of education education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, add the total number of schooldays on which the person rendered any amount of the service.
(2)For each person who rendered service in the employment of the district or school district, county office of education education, or charter school as a teacher in kindergarten or any of grades 1 to 12, inclusive, during the fiscal year, for a period of service during which the person did not have a valid certification document, add the number of schooldays on which the person rendered any amount of the service without a valid certification document.
(3)Divide the number determined in paragraph (2) by the number determined in paragraph (1) and carry the result to four decimal places.
(4)Multiply a school districts or charter schools local control funding formula grant apportionment for the fiscal year, calculated pursuant to Section 42238.02, as implemented by Section 42238.03, or a county office of educations local control funding formula alternative education grant computed pursuant to Section 2574, as apportioned pursuant to Section 2575, for the fiscal year, for the program in which the noncertificated person rendered service by the number determined in paragraph (3).
(c)Beginning in 200203, if a county office of education releases a warrant in favor of a person for whom a period of school district or charter school service is included in the calculation set forth in paragraph (2) of subdivision (b), and the warrant is either compensation for employment as a teacher or for employment in some other capacity if the county office of education has direct knowledge or is in possession of information giving rise to a reasonable inference that the person is rendering service as a teacher, the county office of education shall be assessed a penalty. The penalty assessed to a county office of education for any fiscal year in which one or more school district or charter school teachers did not have a valid certification document shall be equal to the lesser of three amounts as follows:
(1)Fifty percent of all penalties assessed for that fiscal year to all school districts or charter schools in the county offices office of educations jurisdiction pursuant to subdivision (b).
(2)One-half percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county offices office of educations county school service fund, when two or fewer school districts or charter schools in the county offices office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(3)One percent of the total expenditures for that fiscal year from unrestricted resources, as defined in the California School Accounting Manual, in the county offices office of educations county school service fund, when three or more school districts or charter schools in the county offices office of educations jurisdiction are subject to penalties pursuant to subdivision (b).
(d)Except as provided in Section 41344.1, nothing in this section may be waived in whole or in part.
SEC. 24.SEC. 27.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 25.SEC. 28.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)(A)Visit each charter schoolsite, resource center, meeting space, and satellite facility established by the charter school at least annually.
(B)Commencing July 1, 2028, annually attend a meeting of the governing body of the charter school and, if applicable, a meeting of the governing body of the entity managing the charter school, and review the agendas and minutes of those meetings to monitor actions that may be taken.
(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)(A)Monitor the fiscal condition of each charter school under its authority.
(B)Commencing July 1, 2028, annually monitor payments of each charter school under its authority to verify that the payments are legal and have proper authorization. Monitoring shall include, but not be limited to, a review of credit statements, debit card statements, other electronic payment methods and media, and bank statements.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)A renewal of the charter is granted or denied.
(B)The charter is revoked.
(C)The charter school will cease operation for any reason.
(6)(A)Annually Commencing July 1, 2028, annually verify all of the following for a nonclassroom-based charter school:
(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.
(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.
(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.
(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:
(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.
(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.
(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.
(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.
(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.
(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).
(7)A Commencing July 1, 2028, a chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.
(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
SEC. 26.SEC. 29.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall revise regulations to require that charter schools report periodic and annual financial data in the same manner and on the same form prescribed for school districts in accordance with all of the following:
(a)Charter schools with an average daily attendance of 5,000 or more pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year.
(b)Charter schools with an average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year.
(c)Charter schools with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.
SEC. 27.SEC. 30.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)(A)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph under either of the following conditions:
(i)The school district has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership.
(ii)For the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district pursuant to subdivision (h) of Section 41326, the school district has exited state receivership and has a qualified interim certification pursuant to Section 42131 or the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving the charter school would result in the school district having a qualified or negative interim certification pursuant to Section 42131.
(B)Charter schools proposed in a school district satisfying one of the conditions specified in subparagraph (A) shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by each of both the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated positions, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 28.SEC. 31.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(L)Admission policy and procedures, consistent with subdivision (e).
(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contract Code.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated positions in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 29.SEC. 32.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 30.SEC. 33.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize in accordance with all of the following:
(1)A authorize, except as provided in subdivision (d). A school district with an average daily attendance of fewer than 2,500 10,000 pupils shall not authorize a one or more nonclassroom-based charter school schools or approve a material revision to expand an one or more existing nonclassroom-based charter school to schools if doing so would result in more than a totality of 100 percent of the average daily attendance of the school district authorizing the charter.
(2)A school district with an average daily attendance of 2,500 pupils or more but fewer than 5,000 pupils shall not authorize a nonclassroom-based charter school or approve a material revision to expand an existing nonclassroom-based charter school to an average daily attendance of more than 2,500 pupils.(3)A school district with an average daily attendance of 5,000 pupils or more but fewer than 10,000 pupils shall not authorize a nonclassroom-based charter school or approve a material revision to expand an existing nonclassroom-based charter school to more than 50 percent of the average daily attendance of the school district authorizing the charter.(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)If Except as provided in subdivision (d), if the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
(d)(1)Notwithstanding subdivisions (a) and (c), a chartering authority that authorized a nonclassroom-based charter school in operation on or before December 31, 2025, and that exceeds the limits established in subdivision (a), may reauthorize and continue to be the chartering authority for that nonclassroom-based charter school if the chartering authority employs at least four executive-level staff members who cover the responsibilities related to all of the following job classifications and areas of employment:
(A)Superintendent.
(B)Chief business official.
(C)Human resources.
(D)Special education.
(E)Curriculum.
(2)Staff members who have the job responsibilities described in subparagraphs (A), (C), (D), and (E) of paragraph (1) shall hold an administrative credential issued by the Commission on Teacher Credentialing, as required by Section 35028.
SEC. 31.SEC. 34.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.
(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.
(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall be related to subjects including, include, but not be limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.
(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:
(1)Acting as the fiscal agent for the program.
(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.
(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.
(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.
(4)Facilitating an annual statewide conference for chartering authorities.
(5)Establishing and facilitating an advisory board, as provided in subdivision (e), to provide input on the development and full implementation of services provided by the program.
(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (e) to measure the programs continual improvement and program fidelity, and to document the programs impact.
(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:
(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.
(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.
(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.
(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.
(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.
(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.
(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:
(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.
(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.
(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.
(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.
(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:
(A)The role and functions of the advisory board.
(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.
(C)The terms of advisory board members.
(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.
(E)Meetings, including the frequency of meetings.
(F)The rules of order.
(G)The process for amending bylaws.
(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:
(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:
(i)Responsibility: the duty to serve the states pupils and the public.
(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.
(iii)Fairness: impartial and just treatment of all stakeholders.
(iv)Knowledge: understanding of charter school law and practice.
(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:
(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.
(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.
(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.
(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.
(e)On or before December 1, 2030, the Legislative Analysts Office shall complete and submit to the Governor and the appropriate education policy and budget committees of the Legislature an evaluation of the program. The Legislative Analysts Office shall evaluate the programs effectiveness in administering training programs, outreach, and the participation of chartering authorities that have not participated in trainings and conferences during previous years, and make recommendations regarding the continuation of funding.
SEC. 32.SEC. 35.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)Nonclassroom-based instruction includes, but is not limited to, independent study, home study, work study, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of this part, virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.
(5)Notwithstanding any other law, the state board and the Superintendent shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 33.SEC. 36.Section 47612.7 of the Education Code is amended to read:47612.7.(a)Notwithstanding any other law and except as provided in subdivision (b), from January 1, 2020, to December 31, 2025, inclusive, the approval of a petition for the establishment of a new charter school, as defined in paragraph (2) of subdivision (e) of Section 47612.5, is prohibited.
(b)Subdivision (a) shall not apply to a nonclassroom-based charter school that was granted approval of its petition and providing educational services to pupils before October 1, 2019, under either of the following circumstances:
(1)If Assembly Bill 1507 of the 201920 Regular Session amends Section 47605.1 and becomes operative on January 1, 2020, and the charter school is required to submit a petition to the governing board of a school district or county board of education in an adjacent county in which its existing resource center is located in order to comply with Section 47605.1, as amended by Assembly Bill 1507 of the 201920 Regular Session, or to retain current program offerings or enrollment.
(2)If a charter school is required to submit a petition to a school district or county board of education in which a resource center is located in order to comply with the court decision in Anderson Union High School District v. Shasta Secondary Home School (2016) 4 Cal.App.5th 262, or other relevant court ruling, and the petition is necessary to retain current program offerings or enrollment.
(3)A charter school authorized by a different chartering authority pursuant to paragraphs (1) and (2) shall be regarded by the department as a continuing charter school for all purposes to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(c)Notwithstanding Section 33050 or any other law, the state board shall not waive the restrictions described in this section.
(d)(1)No later than October 1, 2023, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall study the processes used to determine funding for nonclassroom-based charter schools.
(2)The study shall identify and make recommendations on potential improvements to the processes, including recommendations for enhancing oversight and reducing fraud, waste, and abuse.
(3)No later than March 1, 2024, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall report to the appropriate fiscal and policy committees of the Legislature, the Department of Finance, the department, and the executive director of the state board on recommendations and observations as a result of the study. These recommendations or observations shall consider the fiscal impact on the state.
(e)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.
SEC. 34.SEC. 37.Section 47613 of the Education Code is amended to read:47613.(a)(1)For the 202627 and 202728 fiscal year, years, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 1 percent of the revenue of the charter school.
(2)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).
(b)(1)For the 202728 202829 fiscal year, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 2 percent of the revenue of the charter school.
(2)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).
(c)(1)Commencing July 1, 2028, 2029, and for each fiscal year thereafter, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 3 percent of the revenue of the charter school.
(2)A local educational agency that is designated as the chartering authority pursuant to subdivision (b) or (c) of Section 47605.9, or pursuant to subparagraph (E) of paragraph (2) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to perform the oversight duties listed in Section 47604.32. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).
(d)If a charter school is able to obtain substantially rent-free facilities from the chartering authority, the chartering authority may charge an additional fee not to exceed 2 percent of the revenue of the charter school.
(e)This section does not prevent the charter school from separately purchasing administrative or other services from the chartering authority or any other source.
(f)For purposes of this section, chartering authority means a school district, county board of education, or the state board, that granted the charter to the charter school or the governing board of a school district or county board of education that was designated as the chartering authority pursuant to subdivision (b) or (c) of Section 47605.9 or pursuant to paragraph (1) of subdivision (k) of Section 47605.
(g)For purposes of this section, revenue of the charter school means the amount received in the current fiscal year from the local control funding formula calculated pursuant to Section 42238.02, as implemented by Section 42238.03.
(h)For purposes of this section, costs of supervisorial oversight exclude costs incurred pursuant to Section 47607.3.
SEC. 35.SEC. 38.Section 47613.3 is added to the Education Code, to read:47613.3.(a)A charter school shall comply with all of the following:
(1)For purposes of providing direct services to pupils, a charter school shall not expend public funds for a contract with a contractor, unless that contractor complies with both of the following requirements:
(A)The materials, programs, and organizations providing services are nonsectarian.
(B)The funds that would be used to pay for direct services to pupils are not used to pay tuition or fees at a private school.
(2)A charter school shall not offer any financial payments or gifts to a teacher, a pupil or prospective pupil, or to the parent or guardian of a pupil or prospective pupil for enrollment, referral, retention, participation in school meetings or activities, or participation in direct services to pupils by contractors.
(3)The salary and other income paid to an employee by a charter school or an entity managing a charter school, as defined by Section 47604.1, shall not depend on pupil attendance or pupil course completion.
(4)Management services, business services, marketing, and technology contract fees, including, but not limited to, an entity managing a charter school, as defined by Section 47604.1, shall not be calculated as a percentage of the revenue of the charter school, as defined in Section 47613.
(b)The extent of the charter schools compliance with subdivision (a) shall be reviewed and reported as part of the annual, independent financial audit that a charter school is required to transmit by December 15 of each year pursuant to Section 41020.
(c)The Controller shall include the items listed in paragraphs (1) to (4), inclusive, of subdivision (a) in the next revision of the audit guide.
(d)This section does not supersede or invalidate a contract that is in effect at the time this section becomes operative. If a contract is in effect at the time this section becomes operative, the contract shall remain in effect until the parties to the agreement negotiate a successor agreement. A memorandum of understanding shall not extend a contract that is in effect at the time this section becomes operative.
(e)This section shall become operative on July 1, 2026.
SEC. 36.SEC. 39.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other law, and except as provided in paragraph (2), beginning July 1, 2026, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, as defined by paragraph (2) of subdivision (e) of Section 47612.5, including funding provided on the basis of average daily attendance pursuant to Section 42238.02, as modified by Section 42238.03, shall be adjusted by the Superintendent as follows:
(A)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for at least 75 percent of their attendance, no adjustment shall be made to the reported average daily attendance used for funding their nonclassroom-based attendance.
(B)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 60 percent and 74 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 7.5 percent.
(C)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 40 percent and 59 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 15 percent.
(D)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 20 percent and 39 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 22.5 percent.
(E)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 0 percent and 19 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 30 percent.
(2)Notwithstanding paragraph (1), an indirect-funded charter school authorized pursuant to Section 47605.5 shall not have an adjustment made to the reported average daily attendance used for funding their nonclassroom-based attendance.
(2)(3)This section does not authorize the Superintendent to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (e) of Section 47612.5.
(3)(4)The determination for funding shall be on a percentage basis and the Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding pursuant to this subdivision.
(b)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction, as defined in paragraph (2) of subdivision (e) of Section 47612.5, based on the percentages specified pursuant to subdivision (a).
(c)Notwithstanding any other law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
SEC. 37.SEC. 40.Section 51745.6 of the Education Code is amended to read:51745.6.(a)The ratio of average daily attendance for independent study pupils 18 years of age or less to school district, county office of education, or charter school full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall comply with one of the following:
(1)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(2)It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(3)It shall be calculated by using a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio. All pupils of the school district, county office of education, or charter school, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575, for county offices of education, and Section 42238.05, for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 38.SEC. 41.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 39.SEC. 42.Section 51748 of the Education Code is amended to read:51748.School districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the school district, charter school, or county board of education by grade level, program placement, and the school in which the pupil is enrolled.
SEC. 40.SEC. 43.Section 51749.7 is added to the Education Code, immediately following Section 51749.6, to read:51749.7.(a)A local educational agency shall not allocate, or advertise the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are not provided by a credentialed employee of the local educational agency for the pupil and that are paid for by the local educational agency.
(b)It is the intent of the Legislature that this section does not apply to expanded learning opportunities programs.
SEC. 41.SEC. 44.Section 60119 of the Education Code is amended to read:60119.(a)In order to be eligible to receive funds available for purposes of this article, the governing board of a school district or the governing body of a charter school shall take the following actions:
(1)(A)The governing board of a school district or the governing body of a charter school shall hold a public hearing or hearings at which the governing board or body shall encourage participation by parents, teachers, members of the community interested in the affairs of the school district or charter school, and bargaining unit leaders, and shall make a determination, through a resolution, as to whether each pupil in each school in the school district or charter school has sufficient textbooks or instructional materials, or both, that are aligned to the content standards adopted by the state board in each of the following subjects, as appropriate, that are consistent with the content and cycles of the curriculum framework adopted by the state board:
(i)Mathematics.
(ii)Science.
(iii)History-social science.
(iv)English language arts, including the English language development component of an adopted program.
(B)The public hearing shall take place on or before the end of the eighth week from the first day pupils attend school for that year. A school district or charter school that operates schools on a multitrack, year-round calendar shall hold the hearing on or before the end of the eighth week from the first day pupils attend school for that year on any tracks that begin a school year in August or September.
(C)As part of the hearing required pursuant to this section, the governing board of a school district or the governing body of a charter school also shall make a written determination as to whether each pupil enrolled in a world language or health course has sufficient textbooks or instructional materials that are consistent with the content and cycles of the curriculum frameworks adopted by the state board for those subjects. The governing board of a school district or the governing body of a charter school also shall determine the availability of laboratory science equipment as applicable to science laboratory courses offered in grades 9 to 12, inclusive. The provision of the textbooks, instructional materials, or science equipment specified in this subparagraph is not a condition of receipt of funds provided by this subdivision.
(2)(A)If the governing board of a school district or the governing body of a charter school determines that there are insufficient textbooks or instructional materials, or both, the governing board or body shall provide information to classroom teachers and to the public setting forth, in the resolution, for each school in which an insufficiency exists, the percentage of pupils who lack sufficient standards-aligned textbooks or instructional materials in each subject area and the reasons that each pupil does not have sufficient textbooks or instructional materials, or both, and take any action, except an action that would require reimbursement by the Commission on State Mandates, to ensure that each pupil has sufficient textbooks or instructional materials, or both, within two months of the beginning of the school year in which the determination is made. The governing board or body shall submit a copy of the resolution to the county superintendent of schools no later than three business days after the governing board or body hearing.
(B)In carrying out subparagraph (A), the governing board of a school district or the governing body of a charter school may use moneys in any of the following funds:
(i)Any funds available for textbooks or instructional materials, or both, from categorical programs, including any funds allocated to school districts or charter schools that have been appropriated in the annual Budget Act.
(ii)Any funds of the school district or charter school that are in excess of the amount available for each pupil during the prior fiscal year to purchase textbooks or instructional materials, or both.
(iii)Any other funds available to the school district or charter school for textbooks or instructional materials, or both.
(b)The governing board of a school district or the governing body of a charter school shall provide 10 days notice of the public hearing or hearings set forth in subdivision (a). The notice shall contain the time, place, and purpose of the hearing and shall be posted in three public places in the school district or charter school. The hearing shall be held at a time that will encourage the attendance of teachers and parents and guardians of pupils who attend the schools in the school district or charter school and shall not take place during or immediately following school hours.
(c)(1)For purposes of this section, sufficient textbooks or instructional materials means that each pupil, including English learners, has a standards-aligned textbook or instructional materials, or both, to use in class and to take home. This paragraph does not require two sets of textbooks or instructional materials for each pupil. The materials may be in a digital format as long as each pupil, at a minimum, has and can access the same materials in the class and to take home, as all other pupils in the same class or course in the school district or charter school and has the ability to use and access them at home.
(2)Sufficient textbooks or instructional materials as defined in paragraph (1) do not include photocopied sheets from only a portion of a textbook or instructional materials copied to address a shortage.
(d)The governing board of a school district or the governing body of a charter school that receives funds for instructional materials from any state source is subject to the requirements of this section.
(e)For the purpose of transitioning to instructional materials that are aligned with the common core academic content standards and science content standards, it is the intent of the Legislature that textbooks, instructional materials, and supplemental instructional materials be deemed to be aligned with the content standards pursuant to subdivisions (a) and (c), and be deemed consistent with the content and cycles of the curriculum framework adopted by the state board pursuant to subdivision (a) if the textbooks, instructional materials, supplemental instructional materials, or a combination of any such materials are aligned to the content standards adopted pursuant to Section 60605 or 60605.8, or former Section 60605.85, as that section read on June 30, 2014.
SEC. 42.SEC. 45.Section 20110 of the Public Contract Code is amended to read:20110.(a)The provisions of this part shall apply to contracts awarded by school districts subject to Part 21 (commencing with Section 35000) of Division 3 of Title 2 of the Education Code.
(b)(1)This article shall also apply to contracts awarded by a charter school established pursuant to Part 26.8 (commencing with Section 47600) of Division 4 of Title 2 of the Education Code.
(2)For purposes of this article, a charter school shall be deemed a school district and the governing body of a charter school shall be deemed the governing board of a school district, and a reference to a school district or the governing board of a school district shall be deemed to also reference a charter school or the governing body of a charter school, as applicable.
SEC. 43.SEC. 46.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The Legislature finds and declares all of the following:
(a)Accountability within public educational funding is the expressed interest of the Legislature.
(b)Consistency of the application of audit standards and requirements across school districts, county superintendents of schools, and charter schools, known collectively as local educational agencies, is an essential component of transparency.
(c)Sound fiscal management practices across local educational agencies promote the most efficient and effective use of public funds for the education of children by strengthening fiscal accountability at local educational agencies.
(d)Quality audits of local educational agencies are necessary for consistent financial and compliance transparency and to produce essential accountability measures.
(e)The quality of audits of local educational agencies is directly influenced by the quality of certified and noncertified public accountants who serve as auditors.
(f)The quality of individual auditors work product is correlated to training and experience.
(g)Processes that ensure a thorough and fair evaluation of audit and auditor quality and provide for appropriate discipline of auditors are essential.
SEC. 2.Section 1240 of the Education Code is amended to read:1240.The county superintendent of schools shall do all of the following:
(a)Superintend the schools of that county.
(b)Maintain responsibility for the fiscal oversight of each school district in that county pursuant to the authority granted by this code.
(c)(1)Visit and examine each school in the county at reasonable intervals to observe its operation and to learn of its problems. The county superintendent of schools annually may present a report of the state of the schools in the county, and of the county office of education, including, but not limited to, observations from visiting the schools, to the board of education and the board of supervisors of the county.
(2)(A)(i)Commencing with the 202122 fiscal year, the Superintendent shall identify a list of schools, which shall include charter schools, for which the county superintendent, or a designee, shall inspect annually, and about which the county superintendent, or a designee, shall submit an annual report, at a regularly scheduled November board meeting, to the governing board of each school district under the jurisdiction of the county superintendent, the county board of education of that county, and the board of supervisors of that county, that describes the state of the schools in the county. The list established in the 202122 fiscal year shall also be used as the list established in the 202223 and 202324 fiscal years. The list of schools established pursuant to this section shall be reestablished in the 202425 fiscal year and again every three fiscal years thereafter. Each list shall be established in accordance with clause (ii), and shall be used for inspections beginning the following fiscal year.
(ii)The list of schools pursuant to clause (i) shall be compiled as follows:
(I)The Superintendent shall include on the list all schools that were most recently identified for comprehensive support and improvement and additional targeted support and improvement pursuant to the federal Every Student Succeeds Act (Public Law 114-95) or identified as low performing under the federal Elementary and Secondary Education Act of 1965 (Public Law 89-10), or any subsequent amendments to that act. For the list established in the 202122, 202223, and 202324 fiscal years, the Superintendent shall use the list of schools identified in the 201920 fiscal year for comprehensive support and improvement and for additional targeted support and improvement.
(II)The Superintendent shall include on the list all schools where 15 percent or more of the teachers are holders of a permit or certificate, such as a temporary or short-term permit, a substitute permit, a waiver, an intern credential, or any other authorization that is a lesser certification than a preliminary or clear California teaching credential. With the exception of alternative schools, all schools within a local educational agency that fail to meet the requirements of Sections 44258.9 and 60900 shall be included on the list for the applicable reporting cycle.
(III)The list of schools compiled pursuant to clause (i) shall exclude alternative schools within the meaning of subdivision (d) of Section 52052 and other schools accepted for participation in the Dashboard Alternative School Status program by the department.
(iii)The annual report shall include the determinations for each school made by the county superintendent, or the county superintendents designee, regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, and the county superintendent, or the county superintendents designee, shall use a standardized template to report the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9, unless the current annual report being used by the county superintendent, or the county superintendents designee, already includes those details with the same level of specificity that is otherwise required by this subdivision.
(B)The county superintendent of the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco shall contract with another county office of education or an independent auditor to conduct the required visits and make all reports required by this paragraph.
(C)On a quarterly basis, the county superintendent, or the county superintendents designee, shall report the results of the visits and reviews conducted that quarter to the governing board of the school district at a regularly scheduled meeting held in accordance with public notification requirements. The results of the visits and reviews shall include the determinations of the county superintendent, or the county superintendents designee, for each school regarding the status of all of the circumstances listed in subparagraph (E) and teacher misassignments and teacher vacancies, as described in Section 44258.9. If the county superintendent, or the county superintendents designee, conducts no visits or reviews in a quarter, the quarterly report shall report that fact.
(D)The visits made pursuant to this paragraph shall be conducted at least annually and shall meet the following criteria:
(i)Minimize disruption to the operation of the school.
(ii)Be performed by individuals who meet the requirements of Section 45125.1.
(iii)Consist of not less than 25 percent unannounced visits in each county. During unannounced visits in each county, the county superintendent shall not demand access to documents or specific school personnel. Unannounced visits shall only be used to observe the condition of school repair and maintenance, and the sufficiency of instructional materials, as defined by Section 60119.
(E)The priority objective of the visits made pursuant to this paragraph shall be to determine the status of all of the following circumstances:
(i)Sufficient textbooks, as defined in Section 60119 and as specified in subdivision (i).
(ii)The condition of a facility that poses an emergency or urgent threat to the health or safety of pupils or staff, as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72.
(iii)The accuracy of data reported on the school accountability report card with respect to the availability of sufficient textbooks and instructional materials, as defined by Section 60119, and the safety, cleanliness, and adequacy of school facilities, including good repair, as required by Sections 17014, 17032.5, 17070.75, and 17089.
(F)The county superintendent may make the status determinations described in subparagraph (E) during a single visit or multiple visits. In determining whether to make a single visit or multiple visits for this purpose, the county superintendent shall take into consideration factors such as cost-effectiveness, disruption to the schoolsite, deadlines, and the availability of qualified reviewers.
(G)If the county superintendent determines that the condition of a facility poses an emergency or urgent threat to the health or safety of pupils or staff as described in school district policy or paragraph (1) of subdivision (c) of Section 17592.72, or is not in good repair, as specified in subdivision (d) of Section 17002 and required by Sections 17014, 17032.5, 17070.75, and 17089, the county superintendent, among other things, may do any of the following:
(i)Return to the school to verify repairs.
(ii)Prepare a report that specifically identifies and documents the areas or instances of noncompliance if the school district has not provided evidence of successful repairs within 30 days of the visit of the county superintendent or, for major projects, has not provided evidence that the repairs will be conducted in a timely manner. The report may be provided to the governing board of the school district. If the report is provided to the school district, it shall be presented at a regularly scheduled meeting held in accordance with public notification requirements. The county superintendent shall post the report on the internet website of the county superintendent. The report shall be removed from the internet website when the county superintendent verifies the repairs have been completed.
(d)Distribute all laws, reports, circulars, instructions, and blanks that the county superintendent may receive for the use of the school officers.
(e)Annually, on or before September 15, present a report to the governing board of the school district and the Superintendent regarding the fiscal solvency of a school district with a disapproved budget, qualified interim certification, or a negative interim certification, or that is determined to be in a position of fiscal uncertainty pursuant to Section 42127.6.
(f)Keep in the office of the county superintendent the reports of the Superintendent.
(g)Keep a record of the official acts of the county superintendent and of all the proceedings of the county board of education, including a record of the standing, in each study, of all applicants for certificates who have been examined, which shall be open to the inspection of an applicant or an authorized agent of the applicant.
(h)Enforce the course of study.
(i)(1)Enforce the use of state textbooks and instructional materials and of high school textbooks and instructional materials regularly adopted by the proper authority in accordance with Section 51050.
(2)For purposes of this subdivision, sufficient textbooks or instructional materials has the same meaning as in subdivision (c) of Section 60119.
(3)(A)Commencing with the 202223 school year, if a school is identified as specified in subparagraph (A) of paragraph (2) of subdivision (c), the county superintendent specifically shall review that school at least annually as a priority school. A review conducted for purposes of this paragraph shall be completed by the fourth week of the school year.
(B)In order to facilitate the review of instructional materials before the fourth week of the school year, the county superintendent in a county with 200 or more schools that are identified as specified in subparagraph (A) of paragraph (2) of subdivision (c) may use a combination of visits and written surveys of teachers for the purpose of determining sufficiency of textbooks and instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined in subdivision (c) of Section 60119. If a county superintendent elects to conduct written surveys of teachers, the county superintendent shall visit the schools surveyed within the same academic year to verify the accuracy of the information reported on the surveys. If a county superintendent surveys teachers at a school in which the county superintendent has found sufficient textbooks and instructional materials for the previous two consecutive years and determines that the school does not have sufficient textbooks or instructional materials, the county superintendent shall, within 10 business days, provide a copy of the insufficiency report to the school district as set forth in paragraph (4).
(C)For purposes of this paragraph, written surveys may include paper and electronic or online surveys.
(4)If the county superintendent of schools determines that a school does not have sufficient textbooks or instructional materials in accordance with subparagraph (A) of paragraph (1) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, the county superintendent shall do all of the following:
(A)Prepare a report that specifically identifies and documents the areas or instances of noncompliance.
(B)Provide within five business days of the review, a copy of the report to the school district, as provided in subdivision (c), or, if applicable, provide a copy of the report to the school district within 10 business days pursuant to subparagraph (B) of paragraph (3).
(C)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(D)If the deficiency is not remedied as required pursuant to subparagraph (C), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district to determine which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(5)If the county superintendent of schools determines that there are insufficient textbooks or instructional materials pursuant to a resolution received in accordance with subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119 and as defined by subdivision (c) of Section 60119, or as a result of receiving a report of an unresolved complaint pursuant to subdivision (e) of Section 35186 or an audit exception pursuant to subdivision (i) (l) of Section 41020, the county superintendent shall do both of the following:
(A)Provide the school district with the opportunity to remedy the deficiency. The county superintendent shall ensure that the deficiency is remedied no later than the second month of the school term.
(B)If the deficiency is not remedied as required pursuant to subparagraph (A), the county superintendent shall request the department to purchase the textbooks or instructional materials necessary to comply with the sufficiency requirement of this subdivision. If the department purchases the textbooks or instructional materials for the school district, the department shall issue a public statement at the first regularly scheduled meeting of the state board occurring immediately after the department receives the request of the county superintendent and that meets the applicable public notice requirements, indicating that the district superintendent and the governing board of the school district failed to provide pupils with sufficient textbooks or instructional materials as required by this subdivision. Before purchasing the textbooks or instructional materials, the department shall consult with the school district when determining which textbooks or instructional materials to purchase. The amount of funds necessary for the purchase of the textbooks and materials is a loan to the school district receiving the textbooks or instructional materials. Unless the school district repays the amount owed based upon an agreed-upon repayment schedule with the Superintendent, the Superintendent shall notify the Controller and the Controller shall deduct an amount equal to the total amount used to purchase the textbooks and materials from the next principal apportionment of the school district or from another apportionment of state funds.
(j)Preserve carefully all reports of school officers and teachers.
(k)Deliver to the county superintendents successor, at the close of the county superintendents official term, all records, books, documents, and papers belonging to the office, taking a receipt for them, which shall be filed with the department.
(l)(1)Submit two reports during the fiscal year to the county board of education in accordance with the following:
(A)The first report shall cover the financial and budgetary status of the county office of education for the period ending October 31. The second report shall cover the period ending January 31. Both reports shall be reviewed by the county board of education and approved by the county superintendent no later than 45 days after the close of the period being reported.
(B)As part of each report, the county superintendent shall certify in writing whether or not the county office of education is able to meet its financial obligations for the remainder of the fiscal year and, based on current forecasts, for two subsequent fiscal years. The certifications shall be classified as positive, qualified, or negative, pursuant to standards prescribed by the Superintendent, for purposes of determining subsequent state agency actions pursuant to Section 1240.1. For purposes of this subdivision, a negative certification shall be assigned to a county office of education that, based upon current projections, will not meet its financial obligations for the remainder of the fiscal year or for the subsequent fiscal year. A qualified certification shall be assigned to a county office of education that may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. A positive certification shall be assigned to a county office of education that will meet its financial obligations for the current fiscal year and subsequent two fiscal years. In accordance with those standards, the Superintendent may reclassify a certification. If a county office of education receives a negative certification, the Superintendent, or the Superintendents designee, may exercise the authority set forth in subdivision (d) of Section 1630. Copies of each certification, and of the report containing that certification, shall be sent to the Superintendent at the time the certification is submitted to the county board of education. Copies of each qualified or negative certification and the report containing that certification shall be sent to the Controller at the time the certification is submitted to the county board of education.
(2)All reports and certifications required under this subdivision shall be in a format or on forms prescribed by the Superintendent, and shall be based on standards and criteria for fiscal stability adopted by the state board pursuant to Section 33127. The reports and supporting data shall be made available by the county superintendent to an interested party upon request.
(3)This subdivision does not preclude the submission of additional budgetary or financial reports by the county superintendent to the county board of education or to the Superintendent.
(4)The county superintendent is not responsible for the fiscal oversight of the community colleges in the county, however, the county superintendent may perform financial services on behalf of those community colleges.
(5)A county office of education having a negative or qualified certification, or classified as qualified or negative by the Superintendent, shall continue to be classified as qualified or negative until the next report required under this subdivision is filed.
(m)If requested, act as agent for the purchase of supplies for the city and high school districts of that county.
(n)For purposes of Section 44421.5, report to the Commission on Teacher Credentialing the identity of a certificated person who knowingly and willingly reports false fiscal expenditure data relative to the conduct of an educational program. This requirement applies only if, in the course of normal duties, the county superintendent discovers information that gives the county superintendent reasonable cause to believe that false fiscal expenditure data relative to the conduct of an educational program has been reported.
(o)If any activities authorized pursuant to this section are found to be a state reimbursable mandate pursuant to Section 6 of Article XIIIB of the California Constitution, funding provided for school districts and county offices of education pursuant to Sections 2574, 2575, 42238.02, and 42238.03 shall be used to directly offset any mandated costs.
SEC. 3.Section 14500 of the Education Code is amended to read:14500.It is the intent of the Legislature in enacting this chapter to promote accountability over public educational funding by establishing a new program to review and report on financial and compliance audits of school districts and the offices of districts, educational joint powers authorities, county superintendents of schools. schools, and charter schools. It is further the intent of the Legislature that the Controller shall have the primary responsibility for implementing and overseeing the program.
SEC. 4.Section 14501 of the Education Code is amended to read:14501.(a)As used in this chapter, financial and compliance audit shall be consistent with the definition provided in the Standards for Audits of Governmental Organizations, Programs, Activities, and Functions promulgated by the Comptroller General of the United States. Financial and compliance audits conducted under this chapter shall fulfill federal single audit requirements.
(b)For purposes of this chapter, the following definitions apply:
(b)As used in this chapter, compliance audit(1)Compliance audit means an audit that ascertains and verifies whether or not funds provided through apportionment, contract, or grant, either federal or state, have been properly disbursed and expended as required by law or regulation or both and includes the verification of each of the following:
(1)(A)Expenditure of funds in accordance with the local control and accountability plan adopted pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4 of Title 2.
(2)(B)The reporting requirements for the sufficiency of textbooks or instructional materials, or both, as defined in Section 60119.
(3)(C)Teacher misassignments pursuant to Section 44258.9.
(4)(D)The accuracy of information reported on the School Accountability Report Card required by Section 33126. The
(2)Local educational agency means a school district, educational joint powers authority, charter school, or county superintendent of schools.
(c)The requirements set forth in paragraphs (2) and (3) and this subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (b) shall be added to the audit guide requirements pursuant to subdivision (b) of Section 14502.1.
SEC. 5.Section 14503 of the Education Code is amended to read:14503.(a)Financial and compliance audits shall be performed in accordance with General Accounting Office standards for financial and compliance audits. audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audits Appeal Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local education educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.
(b)(1)An independent auditor shall not engage in financial or compliance audits unless, within three years of commencing after the first of the audits, audit, and every successive three years thereafter, the auditor completes a quality control review review conducted by the Controller in accordance with the United States General Accounting Office standards. The time period between commencement of the first audit, or completion of a second and successive quality control review, review and completion of a subsequent quality control review shall be calculated from the first day of the month following commencement of the audit or completion of the preceding quality control review. Notwithstanding this subdivision, independent auditors may continue to perform any financial and compliance audits until January 1, 1994.
(2)If an independent auditor has not engaged in financial or compliance audits for three or more consecutive years, the Controller shall conduct a quality control review after the auditor completes the first financial or compliance audit.
SEC. 6.Section 14504 of the Education Code is amended to read:14504.To determine the practicability and effectiveness of the audits and audit guide, the Controller shall, on an annual basis, review and monitor the audit reports performed by independent auditors. The Controller shall determine whether audit reports are in conformance with reporting provisions of subdivision (a) of Section 14503 and shall notify each local education educational agency, office of the responsible chartering authority, if applicable, the responsible county superintendent of schools, the Superintendent of Public Instruction, Superintendent, the Department of Finance, and the auditor regarding each determination. The local education agency or educational agency, the chartering authority, the county superintendent of schools schools, or the Superintendent contracting for the financial and compliance audit shall include a statement that will provide the Controller access to audit working papers.
SEC. 7.Section 14504.2 of the Education Code is amended to read:14504.2.(a)The Controller may perform quality control reviews of audit working papers to determine whether audits are performed in conformity with subdivision (a) of Section 14503. The Department of Finance or the Superintendent may refer an independent auditor of a school district local educational agency to the Controller for a review pursuant to this section if the Department of Finance or the Superintendent finds that an audit of a school district local educational agency was conducted in a manner that may constitute noncompliance with subdivision (a) of Section 14503. The Controller shall communicate the results of his or her the Controllers reviews to the Department of Finance, entity that referred the independent auditor to the Controller, the independent auditor, and the school district or office of the county superintendent of schools local educational agency for which the audit was performed, and shall review his or her the Controllers findings with the independent auditor.
(b)(1)Prior to the performance of any quality control reviews, the Controller shall develop and publish guidelines and standards for those reviews. Pursuant to the development of those guidelines and standards, the Controller shall provide opportunity for public comment.
(2)In performing quality control reviews, the Controller shall ensure that the selection of audits for each auditor undergoing a quality control review is representative of each type of local educational agency for which an auditor performs audits and shall ensure that reviewers have relevant experience with financial or compliance audits of local educational agencies.
(c)(1)The Controller shall conduct a quality control review of the audit working papers of the independent auditor who performed the audits for a local education educational agency for the prior three fiscal years if any of the following circumstances exists:
(A)The local education agency school district has received an emergency apportionment pursuant to Article 2 (commencing with Section 41320) or Article 2.5 (commencing with Section 41325) of Chapter 3 of Part 24. 24 of Division 3 of Title 2.
(B)The budget of the local education agency school district, educational joint powers authority, or county superintendent of schools is disapproved or the local education agency school district or county superintendent of schools has received a negative certification on any budget or interim financial report, as defined in Section Sections 1240, 1622, 42127, and 42131, during the current or preceding fiscal year.
(C)The responsible county superintendent of schools or the Superintendent has otherwise determined that a lack of going concern exists for a local education agency the school district, educational joint powers authority, or county superintendent of schools pursuant to Section Sections 1630 and 42127.6.
(2)If the quality control review of the Controller indicates that the audit was conducted in a manner that may constitute unprofessional conduct as defined pursuant to Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit, the Controller shall refer the case to the California Board of Accountancy. If the California Board of Accountancy finds that the independent auditor conducted an audit in an unprofessional manner, the independent auditor is prohibited from performing any audit of a local education educational agency for a period of three years, in addition to any other penalties that the California Board of Accountancy may impose.
(d)The Controller shall conduct a quality control review after an authorized certified public accountant or public accountant listed in the Certified Public Accountants Directory Service (1) completes its first local educational agency financial statement and compliance audit or (2) completes its first local educational agency financial statement and compliance audit after three or more years of not having completed an audit.
(e)The Controller shall conduct a quality control review every three years to ensure that all certified public accountant firms are periodically reviewed.
(d)(f)In any matter that is referred to the California Board of Accountancy under subparagraph (A) of paragraph (1) of subdivision (c), the Controller may suspend the independent auditor from performing any local education educational agency audits pending final disposition of the matter by the California Board of Accountancy if the Controller gives the independent auditor notice and an opportunity to respond to that suspension. The independent auditor shall be given credit for any period of suspension if the California Board of Accountancy prohibits the independent auditor from performing audits of the local education educational agency under subdivision (c). In no event may the The Controller shall not suspend an independent auditor under this subdivision for a period of longer than three years.
(e)(g)The county superintendent of schools or the county board of education schools, the chartering authority, the Controller, or the Superintendent may refer an independent auditor of a local education educational agency to the California Board of Accountancy for action pursuant to described in paragraph (2) of subdivision (c) if an any of the following circumstances exists:
(1)An audit of a local education educational agency was conducted in a manner that may constitute unprofessional conduct as defined by Section 5100 of the Business and Professions Code, including, but not limited to, gross negligence resulting in a material misstatement in the audit.
(2)Material deficiencies are discovered in the quality control review conducted pursuant to this section.
(3)The continuing education and prior experience requirements of Section 41020 are not met.
SEC. 8.Section 14505 of the Education Code is amended to read:14505.(a)The governing board of each school district and each office of the county superintendent of schools or body of a local educational agency shall include both of the following two provisions in their contracts for audits:
(a)(1)A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of subdivision (a) of Section 14503.
(b)(2)A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior years audit report was not certified as conforming to reporting provisions of subdivision (a) of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to reporting provisions of subdivision (a) of Section 14503.
(c)(b)Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to reporting provisions of subdivision (a) of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The board California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1)Order the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503.
(2)Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the board California Board of Accountancy within one year from the date of filing the appeal.
(d)(c)If the board California Board of Accountancy orders the Controller to provide notification that the audit report conforms to reporting provisions of subdivision (a) of Section 14503, pursuant to paragraph (1) of subdivision (b), the Controller shall notify the contracting school district local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
SEC. 9.Section 14506 of the Education Code is amended to read:14506.The Controller shall conduct any additional audits which that are necessary to carry out his or her the Controllers duties and responsibilities under pursuant to this code and the Government Code. Nothing in this chapter shall be construed to This chapter does not authorize any a local educational agency, or any a subcontractor or subrecipient, to constrain, in any manner, the Controller from carrying out any additional audits. However, to To the extent that the required financial and compliance audits provide the Controller with the information necessary to carry out his or her the Controllers responsibilities, the Controller shall plan additional audits as appropriate to avoid any unnecessary duplication of audit efforts. In performing these additional audits, the Controller shall, to the extent deemed appropriate under the circumstances, build upon the work performed during the required financial and compliance audit. The Controller shall not bill the school district or the county superintendent of schools local educational agency for the costs of these additional audits.
SEC. 10.Section 14507 of the Education Code is amended to read:14507.The Controller shall report to the State Department of Education by Superintendent on or before June 30 of each year in order to apprise the department of school districts and offices of county superintendents of schools which Superintendent of those local educational agencies that are not in compliance with the applicable statutes and regulations. The Controllers report shall categorize audit exception by types and shall identify the reasons for the exceptions. The reasons may be the legislative intent or language is unclear or the administrative requirement is not feasible. The Controller shall make recommendations as to what action should be taken by the department. Superintendent. Before issuing the report, the Controller shall allow the school district or the county superintendent of schools each local educational agency that is specified in the report a reasonable period of time to review and comment on the section of the report affecting them. that local educational agency.
SEC. 11.Section 14508 of the Education Code is amended to read:14508.The Controller shall submit a report to the Legislature on or before June 30 of each year regarding any recommendations made to the State Department of Education under Superintendent pursuant to Section 14507.
SEC. 12.Section 14509 of the Education Code is amended to read:14509.The funding appropriated in Item 6100-161-0001 of the annual Budget Act for mental health services shall be subject to existing state and federal audit requirements. Audit procedures shall be included in the audit guide to review whether funding for educationally related mental health services pursuant to this item was used by local educational agencies for its intended purposes in the 201617 fiscal year. These audit procedures shall be included in future fiscal years if the addition of these procedures is recommended by the Controller pursuant to subdivision (a) of Section 14502.1. If any mental health audit findings are generated through this process, the Superintendent shall ensure that the local educational agency has either corrected or developed a plan of correction for state and federal mental health funds pursuant to subdivision (m) (o) of Section 41020.
SEC. 13.Section 17604 of the Education Code is amended to read:17604.(a)Wherever in this code the power to contract is invested in the governing board of the school district district, the governing body of a charter school, or any member thereof, the power may may, by a majority vote of the governing board or body, be delegated to its district superintendent, superintendent or charter school administrator, or to any persons that he or she the district superintendent or charter school administrator may designate, or if there be is no district superintendent or charter school administrator, then to any other officer or employee of the school district or charter school that the governing board or body may designate. The delegation of power may be limited as to time, money money, or subject matter or may be a blanket authorization in advance of its exercise, all as the governing board or body may direct. However, no A contract made pursuant to the delegation and authorization shall not be valid or constitute an enforceable obligation against the school district or charter school unless and until the same shall have been approved or ratified by the governing board, board or body, the approval or ratification to be evidenced by a motion of the governing board or body duly passed and adopted. In
(b)In the event of malfeasance in office, the school district or charter school official invested by the governing board or body with the power of contract shall be personally liable to the school district or charter school employing him or her the official for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 14.Section 17605 of the Education Code is amended to read:17605.(a)The governing board or body, by majority vote vote, may adopt a rule, delegating to any officer or employee of the school district or charter school as the governing board or body may designate, the authority to purchase supplies, materials, apparatus, equipment, and services. No A rule shall not authorize any an officer or employee to make any purchases involving an expenditure by the school district or charter school in excess of the amount specified by Section 20111 of the Public Contract Code. The rule shall prescribe the limits of the delegation as to time, money, and subject matter. All transactions entered into by the officer or employee of the school district or charter school shall be reviewed by the governing board or body every 60 days.
In(b)In the event of malfeasance in office, the school district or charter school officer or employee invested by the governing board or body with the power to contract shall be personally liable for any and all moneys of the school district or charter school paid out as a result of the malfeasance.
SEC. 15.Section 33309.5 is added to the Education Code, to read:33309.5.(a)The Office of the Education Inspector General is hereby established in the department. The Education Inspector General shall be appointed by the Governor, subject to confirmation by a majority of the membership of the Senate, without regard to political affiliation, and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. The Education Inspector General shall report to, and be under the general supervision of, the Superintendent. The Superintendent shall not prevent or prohibit the Education Inspector General from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena during the course of an audit or investigation.
(b)The Office of the Education Inspector General shall be responsible for all of the following:
(1)Conducting and supervising audits and investigations relating to the programs and operations of the department and local educational agencies.
(2)Providing leadership and coordination relating to, and recommending policies for, the prevention and detection of fraud and abuse in the programs and operations of the department and local educational agencies.
(3)Providing a means for keeping the Superintendent and the Legislature fully and currently informed about problems and deficiencies relating to the administration of the programs and operations of the department and local educational agencies, and the necessity for, and progress of, corrective actions that the Education Inspector General deems to be appropriate.
(c)For purposes of this section, local educational agency means a school district, county office of education, charter school, educational joint powers authority, or state special school.
SECTION 1.SEC. 16.Section 41020 of the Education Code is amended to read:41020.(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)(A)It is the intent of the Legislature that all charter schools be audited, including charter schools that are component entities of school districts, county offices of education, or private organizations and encompassed in the audit of the chartering authority.(B)It is the further intent of the Legislature that comprehensive statutory changes be made to implement the recommendations made in February 2024 by the Legislative Analysts Office and the County Office Fiscal Crisis and Management Assistance Team related to their review of the funding determination process for nonclassroom-based charter schools and to implement the recommendations made in September 2024 by the Controllers Multi-Agency Charter School Audits Task Force on audit best practices for detecting and curtailing charter school fraud.(2)It is the further intent of the Legislature that all charter schools be audited.
(b)(1)Not later than the first day of (A)On or before May 1 of each fiscal year, each county superintendent of schools shall provide for an audit of all funds under their jurisdiction and control and the governing board of each local educational agency school district or educational joint powers authority shall either provide for an audit of the books and accounts of the local educational agency, all funds under the control of that school district or educational joint powers authority, including an audit of income and expenditures by source of funds, or shall make arrangements with the county superintendent of schools having jurisdiction over the local educational agency school district or educational joint powers authority to provide for that auditing.
(2)(B)A contract to perform the audit of a local educational agency school district or educational joint powers authority that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the local educational agency. school district or educational joint powers authority.
(2)(A)On or before May 1 of each fiscal year, the governing body of each charter school shall either provide for an audit of all funds under the control of the charter school, including an audit of income by source of funds, or shall make arrangements with the chartering authority to provide for that auditing. An independent audit shall be separately conducted and reported for each charter school that is assigned a County-District-School code.
(B)(i)All charter schools shall be audited and subject to the applicable provisions of this section.
(ii)Financial data for charter schools that are a component entity of a school district or county offices of education shall be presented separately in the applicable audit report as if the financial data of the charter school represents a major fund.
(3)On or before May 1 of each fiscal year, each county superintendent of schools shall either (A) provide for an audit of all funds under their jurisdiction and control, including an audit of income and expenditures by source of funds, or (B) make arrangements with the Superintendent to provide for that auditing.
(3)(c)If the governing board of a local educational agency school district or educational joint powers authority, the governing body of a charter school, or a county superintendent of schools pursuant to paragraph (3) of subdivision (b) has not provided for an audit of the books and accounts of the local educational agency by April 1, the county superintendent of schools having jurisdiction over the local educational agency shall provide for the audit of the local educational agency. one of the following shall apply, as applicable:
(1)For a school district or an educational joint powers authority, the county superintendent of schools having jurisdiction over the school district or educational joint powers authority shall provide for the audit.
(2)For a charter school, the chartering authority having jurisdiction over the charter school shall provide for the audit.
(3)For a county superintendent of schools, the Superintendent shall provide for the audit.
(4)(d)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(5)(e)For purposes of this section, local educational agency does not include community colleges. means a school district, educational joint powers authority, county superintendent of schools, or charter school.
(c)(f)Each audit conducted in accordance with this section shall include all funds of the following:
(1)All funds, books, and accounts of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency. Each audit shall also include an
(2)An audit of pupil attendance procedures. Each audit shall include a procedures and other applicable compliance items as detailed in the audit guide adopted pursuant to Section 14502.1.
(3)A determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4. 4 or, for a charter school, Section 47606.5.
(d)(g)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(e)(h)(1)The cost of the audits an audit provided for by the a county superintendent of schools for a school district or educational joint powers authority shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district or educational joint powers authority from school district or educational joint powers authority funds.
(2)The cost of an audit provided for by a chartering authority for a charter school shall be paid by the chartering authority and the chartering authority shall collect the pro rata share of the cost chargeable to each charter school from charter school funds.
(3)The cost of an audit provided for by the Superintendent for a county superintendent of schools shall be paid by the Superintendent and the Superintendent shall collect the pro rata share of the cost chargeable to each county superintendent of schools from the respective county school service fund.
(2)(4)The cost of the an audit provided for by a governing board or body of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of the a county superintendent of schools shall be paid from the county school service fund.
(f)(i)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller not later than on or before December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (Public Law 107-204; 15 (15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(4)(A)(i)Commencing with the 202627 fiscal year, and every two years thereafter, certified public accountant firms, certified public accountants or public accountants, and audit staff that conduct audits of local educational agencies shall complete 24 hours of continuing education in governmental accounting, auditing, or related subjects specific to local educational agencies and the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting. The continuing education shall include both of the following:
(I)Training on the specific requirements included in the most current Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting.
(II)Training on compliance topics that include pupil attendance, independent study, charter schools, nonclassroom-based instruction, school calendars, and instructional minutes.
(ii)Continuing education units taken as part of the California Board of Accountancy licensure requirements may be used to meet the requirements of clause (i) if the continuing education is specific to local educational agencies and includes the training content described in subclauses (I) and (II) of clause (i).
(B)Commencing with the 202627 fiscal year, certified public accountant firms, certified public accountants or public accountants and audit staff that conduct audits of local educational agencies shall comply with both of the following:
(i)Have certified prior experience conducting financial and compliance audits for local educational agencies.
(ii)Have been peer reviewed by the California Board of Accountancy to ensure that the selection of audits for each auditor undergoing a peer review is representative of each type of local educational agency for which an auditor performs audits and the reviewers have relevant experience with financial or compliance audits of local educational agencies.
(C)The continuing education units and prior experience required pursuant to this paragraph shall be evidenced by a certification to the Controller from the certified public accountant firms, the certified public accountant or public accountant, or the audit staff that the requirements have been met.
(5)The requirements of this subdivision shall apply to audits of local educational agencies regardless of whether the local educational agency is a governmental agency or a nonprofit organization.
(6)Auditors that are under contract with a local educational agency shall notify the chartering authority or the county superintendent of schools, as applicable, the Superintendent, and the Controller in the event that the auditors contract with the local educational agency is terminated or otherwise denied for renewal. The notification shall include the reason for the termination or denial for renewal and shall be made within 30 calendar days of the effective date of that termination or nonrenewal.
(7)Auditors that conduct audits of local educational agencies shall share work papers and draft audit reports upon request by the local educational agency or a successor auditor of the local educational agency.
(8)A successor auditor of a local educational agency shall request all work papers and draft audit reports in the event that the previous auditor is terminated or otherwise denied for renewal.
(g)(j)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(h)(k)(1)Not later than On or before December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with the specified entities, as follows:
(A)For school districts and educational joint powers authorities, with the county superintendent of schools of the county in which the local educational agency is located, the department, Superintendent, and the Controller. The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(2)The audit report referenced in paragraph (1) for the 202021 fiscal year shall instead be filed no later than January 31, 2022.(3)The extension for the audit report referenced in subdivision (m) of Sections 47605 and 47605.6 for the 202021 fiscal year shall instead be filed no later than January 31, 2022.(i)(1)Commencing with the 200203 audit of local educational agencies pursuant(B)For charter schools, with its chartering authority, the Superintendent, the Controller, and the county superintendent of schools of the county in which the charter school is located, unless the county board of education of the county in which the charter school is located is the chartering authority.
(C)For county superintendents of schools, with the Superintendent and the Controller.
(2)The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(l)(1)Pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a local educational agency school district or educational joint powers authority under their jurisdiction related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Commencing with the 200405 audit of local educational agencies pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall include in the review of audit exceptions performed pursuant to this subdivision those audit exceptions related to use of instructional materials program funds, teacher misassignments pursuant to Section 44258.9, and information reported on the school accountability report card required pursuant to Section 33126, and shall determine whether the exceptions are either corrected or an acceptable plan of correction has been developed.(j)(2)Upon submission of the final audit report to the governing board of each local educational agency school district or educational joint powers authority and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the local educational agency, school district or educational joint powers authority, the county office of education superintendent of schools shall do all of the following:
(1)(A)Review audit exceptions related to attendance, inventory of equipment, internal control, teacher misassignments pursuant to Section 44258.9, audit exceptions related to instructional materials and information reported on the school accountability report card pursuant to Section 33126, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(2)(A)If(B)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the local educational agency school district or educational joint powers authority and request the governing board of the local educational agency school district or educational joint powers authority to provide to the county superintendent of schools a description of the corrections or plan of correction by before March 15.
(B)In audit reports for the 202021 fiscal year, the description of the corrections or plan of correction referenced in subparagraph (A) shall instead be filed no later than April 15, 2022.(3)(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the local educational agency school district or educational joint powers authority to resubmit that portion of its response that is inadequate.
(k)(1)Each(3)Each county superintendent of schools shall certify to the Superintendent and the Controller, not later than on or before May 15, that the county superintendent of schools staff has reviewed all audits of local educational agencies school districts or educational joint powers authorities under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent of schools was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the local educational agency the school district or educational joint powers authority or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent of schools shall identify, by local educational agency, school district or educational joint powers authority, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(2)For audit reports for the 202021 fiscal year, the deadline for certification referenced in paragraph (1) shall instead be filed no later than June 15, 2022.(l)(4)In the audit of a local educational agency school district or educational joint powers authority for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the local educational agency school district or educational joint powers authority to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county office of education and the department county superintendent of schools and the Superintendent and restate the exception in the audit report. After receiving that notification, the department Superintendent shall either consult with the local educational agency school district or educational joint powers authority to resolve the exception or require the county superintendent of schools to follow up with the local educational agency. school district or educational joint powers authority.
(m)(1)(A)Each chartering authority shall be responsible for reviewing the audit exceptions contained in an audit of a charter school under its jurisdiction and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(B)If a description of the corrections or plan of correction has not been provided as part of the audit required by this section, the chartering authority shall notify the charter school and request the governing body of the charter school to provide to the chartering authority a description of the correction or plan of correction before March 15.
(C)The chartering authority shall review the description of the correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the chartering authority shall require the charter school to resubmit that portion of its response that is inadequate.
(2)(A)Except as provided in subparagraph (B), each chartering authority shall certify to the county superintendent of schools of the county in which the charter school is located, on or before April 15, that the chartering authority has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(B)If the county board of education of the county in which the charter school is located is the chartering authority, the county board of education shall certify to the Superintendent, on or before April 15, that the county superintendent of schools has done all of the following for the prior fiscal year:
(i)Reviewed all audits of charter schools under its jurisdiction.
(ii)Reviewed all exceptions that the charter school was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the charter school or that an acceptable plan of correction has been submitted to the chartering authority.
(iii)Identified any attendance related audit exception or exceptions involving state funds and required the charter school to submit appropriate reporting forms for processing by the Superintendent.
(3)(A)In the audit of a charter school for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the charter school to determine if the exceptions have been resolved.
(B)(i)Except as provided in subparagraph (C), if the exceptions identified in subparagraph (A) have not been corrected, the auditor shall restate the exception in the audit report and shall immediately notify the appropriate chartering authority and the county superintendent of schools of the county in which the charter school is located.
(ii)After receiving notification pursuant to clause (i), the county superintendent of schools shall either consult with the charter school to resolve the exception or require the chartering authority to follow up with the charter school.
(C)(i)If the exceptions identified in subparagraph (A) have not been corrected and the county board of education of the county in which the charter school is located is the chartering authority, the auditor shall restate the exception in the audit report and shall immediately notify the Superintendent.
(ii)After receiving notification pursuant to clause (i), the Superintendent shall consult with the charter school to resolve the exception or shall require the county board of education as the chartering authority to follow up with the charter school.
(4)(A)In the audit of a county superintendent of schools for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the county superintendent of schools to determine if the exceptions have been resolved.
(B)If the exceptions identified in subparagraph (A) have not been resolved, the auditor shall immediately notify the Superintendent and restate the exception in the audit report.
(n)(1)The Superintendent shall review the audit exceptions contained in an audit of a county superintendent of schools and shall determine whether the exceptions have been corrected or an acceptable plan of correction has been developed.
(2)After receiving a final audit report submitted to a county superintendent of schools or the county board of education, the Superintendent shall do all of the following:
(A)Review audit exceptions, including attendance exceptions or issues, that shall include, but not be limited to, those related to local control funding formula allocations pursuant to Chapter 12.5 (commencing with Section 2574) of Part 2 of Division 1 of Title 1 and those related to independent study.
(B)Notify the county superintendent of schools and request the county superintendent of schools to provide to the Superintendent a description of the corrections or plan of correction before March 15 if a description of the correction or plan of correction has not been provided as part of the audit required by this section.
(C)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, require the county superintendent of schools to resubmit that portion of its response that is inadequate.
(m)(o)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools or chartering authority certifies as of May 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools or chartering authority to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board or body of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(n)(p)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to both chartering authorities, the county superintendent of schools schools, and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of chartering authorities and county superintendents of schools, perform a followup of the audit resolution process of those chartering authorities and county superintendents of schools, and report the results of that followup to the Superintendent Superintendent, the chartering authorities, and the county superintendents of schools that were reviewed.
(o)(q)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(p)(r)If a governing board or body of a local educational agency, chartering authority, or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(q)(s)Audits of regional occupational centers and programs are subject to this section.
(r)(t)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(s)(u)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accord with Government Accounting Standards, Amendment No. 3, as published by the United States General Accounting Office.
SEC. 17.Section 41020.2 of the Education Code is amended to read:41020.2.(a)(1)If a school district the governing board of a school district or educational joint powers authority has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the county superintendent of schools on or before the due date established under Section 41020, the county superintendent of schools may shall investigate the causes for the delay and initiate one of the following actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner: manner.
(2)If the governing body of a charter school has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the chartering authority on or before the due date established under Section 41020, the chartering authority shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(3)If the county superintendent of schools has entered into a contract for an independent audit of its financial statements in accordance with Section 41020 and the audited financial statements have not been filed with the Superintendent on or before the due date established under Section 41020, the Superintendent shall investigate the causes for the delay and initiate one of the actions described in subdivision (c) that will provide the required audited financial statements in the most effective manner.
(1)The(b)(1)(A)(i)The county superintendent of schools or chartering authority may, after consultation with the school district governing board or body of the local educational agency and the auditors under contract to the district, local educational agency, and with the consent of the Controllers office and the Superintendent of Public Instruction, Superintendent, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(ii)As applicable pursuant to subdivision (a), the Superintendent may, after consultation with the county board of education and the auditors under contract to the county board of education for the county office of education or for a charter school where the county board of education of the county in which the charter school is located is the chartering authority, and with the consent of the Controllers office, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements. An extension does not waive the legal deadline, but permits the filing of the report after the deadline.
(B)Extensions granted pursuant to this subdivision shall be the shortest amount of time reasonable given the extenuating circumstances justifying an extension, shall be in increments no greater than 45 calendar days, and shall not exceed a total of 90 calendar days from the due date established under Section 41020.
(2)The As applicable pursuant to subdivision (a), the county superintendent of schools may, schools, chartering authority, or Superintendent, may, after consultation with the school district governing board, board or body of a local educational agency, the auditors under contract to the district, local educational agency and the Controllers office, contract with another qualified certified public accountant or public accountant to obtain the required audited financial statements and charge the cost of the audit to the funds of the district. local educational agency. The county superintendent of schools schools, chartering authority, or Superintendent, shall, to the extent feasible, assist the district local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(3)The As applicable pursuant to subdivision (a), the county superintendent of schools schools, chartering authority, or Superintendent may request the Controllers office to investigate the situation and initiate action as provided in subdivision (b). (c).
(b)(c)(1)If the audited financial statements required by Section 41020 have not been filed by a school district or county superintendent of schools local educational agency with the Controllers office on or before the due date established under Section 41020, the Controllers office shall determine the most advantageous method of obtaining the required audited financial statements. The Controllers office may do any of the following:
(1)(A)Accept the action of the county superintendent of schools schools, chartering authority, or Superintendent permitted by subdivision (a). (b).
(2)(B)Conduct the audit and prepare the auditors report, utilizing the staff available within that office and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools.
(3)(C)Contract with any qualified certified public accountant or public accountant, utilizing the appropriate contracting procedures, for the conduct of the audit and preparation of the audited financial statements and charge the cost of the audit to the next regular apportionment from the State School Fund to the district or county superintendent of schools. local educational agency.
(4)Grant a(D)Consistent with the limits described in subparagraph (B) of paragraph (1) of subdivision (b), grant a reasonable extension of the time for filing the report if, in the judgment of the Controllers office, this will provide the required audited financial statements within the shortest time period. The extension of the time for filing does not waive the legal deadline, but permits the filing of the report after the deadline.
The(2)The Controllers office shall consult with the district governing board, the county superintendent of schools, and governing board or body of the local educational agency, the auditors under contract to the district or county superintendent of schools local educational agency, and the county superintendent of schools or the chartering authority, as applicable, before making the determination of the method to be used in obtaining the audited financial statements. The Controllers office shall, to the extent feasible, assist the district or county superintendent local educational agency in initiating action to avoid payment to the auditors under contract who did not complete the original audit.
(c)(d)Notwithstanding any extension granted under paragraph (1) of subdivision (a) (b) or subparagraph (D) of paragraph (4) (1) of subdivision (b), (c), the Controllers office may determine at any time after the due date for filing of audit reports established by Section 41020 that the audited financial statements not yet filed with that office are delinquent and that the audit will be performed under paragraph (2) or (3) subparagraph (B) or (C) of paragraph (1) of subdivision (b). (c).
(e)If the audited financial statements required by Section 41020 have not been filed by a local educational agency with the Controllers office on or before the due date established under Section 41020, the auditors under contract with the local educational agency shall notify the chartering authority, the county superintendent of schools, the Superintendent, and the Controller that the audit filing is delayed, the reasons for the delay, and the estimated filing date. The notification shall be made no later than seven calendar days from the due date established under Section 41020.
(f)For purposes of this section, local educational agency means a school district, educational joint powers authority, county superintendent of schools, or charter school.
SEC. 18.Section 41020.3 of the Education Code is amended to read:41020.3.(a)By January 31 of each year, the governing board or body of each local educational agency shall review, at a public meeting, the annual audit of the local educational agency for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or management letter issue. This review shall be placed on the agenda of the meeting pursuant to Section 35145. Sections 35145, 47604, and 47604.1.
(b)During the 202122 fiscal year, the annual audit for the 202021 fiscal year and its relevant components, as identified pursuant to subdivision (a), shall instead be reviewed by February 28, 2022.SEC. 19.Section 41020.4 is added to the Education Code, to read:41020.4.(a)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not limited to, instructions necessary to require, at a minimum, all of the following supplemental information and schedules in audit report components for an audit of a local educational agency, except as noted:
(1)(A)Schedule of pupil enrollment: schedule of pupil enrollment by month, category, and, if operating a multitrack year-round calendar, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where enrollment increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(2)(A)Schedule of pupil attendance: schedule of pupil attendance by month, category, and, if operating a multitrack year-round calendar, by track, including the number of days instruction was offered and categorized by classroom-based and independent study.
(B)For charter schools, require auditors to specifically disclose in the audit, and separately by notice to the chartering authority, county superintendent of schools, and the Superintendent, any instance where average daily attendance increases or decreases by more than 5 percent at the end of the month as compared to the prior month.
(3)Schedule of payments or transfers: schedule of the largest 25 aggregate payments or transfers of assets to organizations, determined by the value accumulated over the fiscal year, including to individuals, corporations, partnerships, nonprofit organizations, and other organizations. The schedule shall also include the name of the payee and a brief description of the services or goods purchased.
(4)Schedule of highest compensation: schedule of compensation for the five highest paid employees, including by salary, deferred salary, retirement, health benefits, and any other contractually obligated payments earned by the employee during the fiscal year.
(5)(A)Schedule of pupil-to-teacher ratio: schedule of pupil-to-teacher ratio, including, but not limited to, for each employee, their name, title, percentage of full-time equivalent, credential, names of all employing local educational agencies, and numbers of pupils assigned to that teacher across the teachers assignment.
(B)For a charter school or an entity managing a charter school, as defined in Section 47604.1, that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(C)For independent study programs at school districts, county offices of education, or charter schools, provide a schedule of the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6.
(6)Board members and related management organizations: for charter schools, a disclosure of the charter school governing bodys composition, including member names and terms, if applicable, any related entity managing a charter school, as defined in Section 47604.1, including governing body composition and governing body members and terms, if applicable, the members of executive management of any related entity managing a charter school, and any staff shared by the charter school and the related entity managing a charter school, or other related charter schools.
(7)Related loans: for charter schools, a disclosure of any loans, including the terms of those loans, to or from the charter school and the charter schools governing body members, related entity managing a charter school, as defined in Section 47604.1, including governing board members or members of executive management of any related entity managing a charter school, or staff of the charter school or other related charter schools.
(8)Schedule of expense of education: schedule of the calculation for the schools current expense of education, as defined in Section 41372.
(9)Schedule of charter school oversight expenses and activities: schedule of calculation for charter school oversight fees, notating staff time and activities, including, but not limited to, fiscal review, schoolsite visits, documentation review, teacher misassignment review, audit review, pupil attendance and average daily attendance review, review of the percentage of classroom instruction provided, pupil-to-teacher ratio review, local control and accountability plan review, charter school renewal, and charter school material revisions.
(b)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include, but is not necessarily limited to, instructions necessary to require, at a minimum, that all of the following compliance procedures are performed in an audit of a local educational agency, except as otherwise limited:
(1)Compliance: compliance with professional accounting and auditing standards with an emphasis in the audit guide that audits of local educational agencies shall be conducted in compliance with Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) statements and standards, as applicable, and Generally Accepted Auditing Standards (GAAS).
(2)(A)Sample selection: where representative samples of pupils, pupil work product, financial transactions, or other sampling is required to be performed and selected, the auditor shall independently identify the sample and make that selection personally.
(B)Auditor transaction sampling shall include a sample size appropriate for the type of local education agency.
(C)Sampling of pupil enrollment, attendance, and instructional minutes shall be made from all programs, attendance months, and tracks, if applicable.
(D)For charter schools that are a component entity of a school district or county superintendent of schools, the auditor shall ensure that transaction samples are selected, evaluated, and reported on for each charter school as if the charter school or schools were the equivalent of a major fund of the school district or county office of education.
(3)(A)Materiality: explicitly state that all discrepancies in average daily attendance and instructional minutes at charter schools meet the materiality standard.
(B)Charter schools that are a component entity of a school district or county superintendent of schools shall report charter school financial data separately from the general fund of the school district or county superintendent of schools, and the auditor shall sample transactions of the charter school as if the financial data of the charter school represented a major fund of the school district or county superintendent of schools. The auditor shall also present financial data separately for each individual charter school in the supplemental section or footnotes of the audit report.
(4)(A)Enrollment: for nonclassroom-based instruction, verify enrollment of pupils.
(B)Using appropriate sampling techniques, verify pupil enrollment, including obtaining a written confirmation from the parent or guardian of a pupil, emancipated pupil, or other custodian of pupil, or, in the case of a pupil over 18 years of age, from the pupil, enrolled.
(C)State in a finding any inappropriately reported enrollment identified.
(5)Chartering authority input: require auditors to consult with and interview the chartering authority for input and information, including a focus on fiscal and compliance areas the charter school excels or may not meet expectations, potential fraud risks, irregularities in observations and reporting, and other background information pertinent to the audit.
(6)(A)Related parties: determining if a related entity, such as a charter management organization, education management organization, or similar third party with financial, economic, or controlling membership interest, exists with the charter school.
(B)If a relationship is determined to exist pursuant to subparagraph (A), evaluate the level of the relationship to determine if it is material. For purposes of materiality, determine if the related party has a material financial, economic, or controlling interest in the charter school or can exercise material control, such as common management or board, majority voting interest, or sole corporate or statutory member or other arrangement.
(C)If a relationship is determined to be material pursuant to subparagraph (B), ensure that the financial statements of the related entity are reviewed through a separate independent audit and consolidated into the charter schools audit report pursuant to the related party disclosure rules of the Financial Accounting Standards Board Accounting Standards Codification and pronouncements, and other generally accepted accounting principles and constraints regarding when financial statement consolidation is required, permitted, and prohibited.
(D)If a relationship is determined to be material pursuant to subparagraph (B) and consolidation of financial reporting is required, then prepare a side-by-side comparison of board members and executive management.
(7)(A)Verification: verify the percentage of pupils engaged in classroom-based instruction as submitted by the charter school to the Superintendent pursuant to Section 47634.2, and report any discrepancies as a finding.
(B)Verify the calculation of the schools current expense of education, and report any discrepancies as a finding.
(C)Verify the pupil-to-teacher ratio calculation. For independent study programs at school districts, county offices of education, and charter schools, verify the pupil-to-teacher ratios and calculations required pursuant to Section 51745.6. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(c)Commencing with the 202627 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall include a minimum of two sample audit reports that incorporate best practices and meet audit reporting requirements for format and content. At a minimum, the two sample audit reports shall include a sample audit report for a school district and a sample audit report for a charter school.
(d)For purposes of this section, local educational agency means a school district, county office of education, charter school, or educational joint powers authority.
SEC. 20.Section 41020.5 of the Education Code is amended to read:41020.5.(a)(1)If the Controller determines by two consecutive quality control reviews pursuant to Section 14504.2, or if the Superintendent, chartering authority, or a county superintendent of schools determines, that audits performed by a certified public accountant or public accountant under Section 41020 were not performed in substantial conformity with provisions of the audit guide, or that the audit reports, including amended reports, submitted by February 15 following the close of the fiscal year audited, for two consecutive years do not conform to provisions of the audit guide as required by Section 14504, the Controller Controller, the Superintendent, the chartering authority, or the county superintendent of schools, as appropriate, shall notify in writing the certified public accountant or public accountant and the California Board of Accountancy.
If(2)If the certified public accountant or public accountant does not file an appeal in writing with the California Board of Accountancy within 30 calendar days after receipt of the notification from the Controller Controller, Superintendent, chartering authority, or county superintendent of schools, the determination of the Controller Controller, Superintendent, chartering authority, or county superintendent of schools pursuant to this section shall be final.
(b)If an appeal is filed with the California Board of Accountancy, the board shall complete an investigation of the appeal within 90 days of the filing date. On the basis of the investigation, the board may do either of the following:
(1)Find that the determination of the Controller Controller, Superintendent, chartering authority, or county superintendent of schools should not be upheld and has no effect.
(2)Schedule the appeal for a hearing, in which case, the final action on the appeal shall be completed by the board within one year from the date of filing the appeal.
(c)If the determination of the Controller Controller, Superintendent, chartering authority, or county superintendent of schools under subdivision (a) becomes final, the certified public accountant or public accountant shall be ineligible to conduct audits under Section 41020 for a period of three years, or, in the event of an appeal, for any period, and subject to the conditions, that may be ordered by the California Board of Accountancy. Not later than the first day of March of each year, the Controller shall notify each school district district, charter school, and county office of education of those certified public accountants or public accountants determined to be ineligible under this section. School districts districts, charter schools, and county offices of education shall not use the audit services of a certified public accountant or public accountant ineligible under this section.
(d)For the purposes of this section, certified public accountant or public accountant includes any person or firm entering into a contract to conduct an audit under Section 41020.
(e)This section shall not preclude the California Board of Accountancy from taking any disciplinary action it deems appropriate under other provisions of law. laws.
SEC. 21.Section 41020.8 of the Education Code is amended to read:41020.8.(a)Notwithstanding any other provision of law, the auditor conducting the an annual audit pursuant to Section 41020 shall, upon request, provide the county superintendent or the Superintendent of Public Instruction with fiscal information on a school district within his or her jurisdiction if the county superintendent of schools determines, pursuant to Section 42127.6, that a school district may not be able to meet its obligations of the current or subsequent fiscal year. Information financial and compliance information to specified entities as follows:
(1)To the county superintendent of schools for a school district or educational joint powers authority within the county superintendent of schools jurisdiction.
(2)To the chartering authority or county superintendent of schools for a charter school if the county superintendent of schools is not the chartering authority.
(3)To the Superintendent and the Controller for any local educational agency.
(b)Information provided by an auditor to the chartering authority, a county superintendent superintendent of schools, the Controller, or the Superintendent of Public Instruction pursuant to this section shall be submitted simultaneously to the named district school district, charter school, or county superintendent of schools, as applicable, and shall not constitute a violation of auditor-client confidentiality.
SEC. 22.Section 41344.4 of the Education Code is amended to read:41344.4.Notwithstanding any other provision of law, a local educational agency is shall not be required to repay an apportionment based on a significant audit exception related to the requirements specified in paragraphs (1), (2), and (3) subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 14501 if the county superintendent of schools certifies to the Superintendent of Public Instruction and the Controller that the audit exception was corrected by the local educational agency or that an acceptable plan of correction was submitted to the county superintendent of schools pursuant to paragraph (3) of subdivision (k) (l) of Section 41020. With respect to textbooks and instructional materials, the plan shall be consistent with the requirements of subparagraph (A) of paragraph (2) of subdivision (a) of Section 60119.
SEC. 23.Section 44258.9 of the Education Code is amended to read:44258.9.(a)(1)The Legislature finds and declares that continued monitoring of educator assignments by the commission and the county superintendents of schools and continued reporting of educator assignments by the department will help ensure that local educational agencies meet state and federal reporting requirements, including the requirements of the federal Every Student Succeeds Act (Public Law 114-95), or any other federal law that effectively replaces that act, and will ensure that the rate of educator misassignments remains low. To support pupil access to credentialed and appropriately assigned educators, the commission and the department shall collaborate to publish annual data on educator credentialing and assignment, at the school, local educational agency, and state level. To the extent possible, and with the funds provided for that purpose, each county office of education shall perform its duties as a monitoring authority, as specified in subdivision (e).
(2)The commission and the department shall collaborate to perform the duties specified in this section, with the commission executing the assignment monitoring process and the department facilitating the annual teaching assignment monitoring data production and publication.
(3)The teaching assignment monitoring outcome data reporting shall be executed in a manner consistent with the statewide system of support and the school accountability system established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4, county office of education monitoring established pursuant to Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of Division 1 of Title 1, and the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act, or any other federal law that effectively replaces that act.
(b)For purposes of this section, the following definitions apply:
(1)Assignment means the placement of an individual in a teaching or services position. An assignment can be filled legally by an individual with a credential, permit, waiver, or any other document issued by the commission authorizing the assignment, or the individual may be otherwise authorized by statute.
(2)Local educational agency means a school district, county office of education, charter school, or state special school.
(3)Misassignment has the same meaning as defined in Section 33126. For purposes of this section, employee, as used in the definition of misassignment in Section 33126, includes an individual hired on a contract. For purposes of this section, in a charter school, misassignment shall apply only to employees in teaching positions.
(4)Monitoring authority means:
(A)The county office of education for school districts in the county and programs operated by the county office of education.
(B)The commission for a school district or county office of education that operates within a city or county in which there is a single school district, including the Counties of Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City and County of San Francisco, and the state special schools.
(C)(i)The chartering authority for a charter school.
(ii)Notwithstanding clause (i), in cases where a charter school operates under the authority of a school district in which the charter school is the sole schoolsite in the school district, the commission shall serve as the monitoring authority.
(5)System, unless the context requires otherwise, means the State Assignment Accountability System, which is an electronic data system administered by the commission for monitoring educator assignments and vacant positions and uses department data collected pursuant to Section 60900 for its functioning.
(6)Vacant position means a position to which a single-designated certificated employee has not been assigned at the time that the data are collected by the department pursuant to Section 60900.
(c)The commission and the department shall enter into a data sharing agreement for the department to provide the commission with educator assignment data necessary to annually identify educator assignments, including assignments filled by individuals on preliminary or clear credentials, intern credentials, permits or waivers, misassignments, and vacant positions at local educational agencies. The data sharing agreement shall also require the commission to make credential, permit, waiver, misassignment, vacant positions, and other relevant data available to the department to support reporting consistent with the state plan approved by the state board that is required for compliance with the federal Every Student Succeeds Act (Public Law 11495), or any other federal law that effectively replaces that act, and applicable state reporting requirements, including for the statewide system of support established pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)The commission and the department may engage in a variety of activities designed to inform school administrators, teachers, and personnel within the county offices of education of the regulations and statutes affecting the assignment of educators and how data on educator assignments is published and used. These activities may include, but shall not necessarily be limited to, the preparation of instructive brochures and the holding of regional workshops.
(e)(1)The commission shall annually use the data provided by the department pursuant to subdivision (c) to produce an initial data file of vacant positions and educator assignments that do not have a clear match of credential to assignment. The commission shall notify local educational agencies and monitoring authorities of the opportunity to access the system and review the initial data file of potential misassignments and vacant positions.
(2)A local educational agency may do any of the following within 60 days of the commissions notification pursuant to paragraph (1):
(A)Access and review the initial data file in the system to determine if each educator included in the initial data file is otherwise legally authorized for the assignment.
(B)Submit documentation or additional assignment information to the commission and monitoring authority showing that the educator is otherwise legally authorized for the assignment. This information may include the use of local assignment options outlined in any statute or regulation.
(C)Submit documentation to the commission and monitoring authority showing that a position identified in the initial data file as vacant was miscoded and that a legally authorized educator was assigned to the position.
(3)Information submitted to the commission and monitoring authority pursuant to paragraph (2) shall be submitted electronically through the system.
(4)A monitoring authority shall access the system to review the initial data file and any documentation or additional information submitted by a local educational agency for which it is a monitoring authority and make a determination of potential misassignments and vacant positions within 90 days of the commissions notification pursuant to paragraph (1).
(5)The commission shall have the authority to make a final determination for all potential assignments and misassignments.
(6)After the 90-day review period pursuant to paragraph (4), the commission shall share all educator assignment data, including all preliminary and clear credentials, intern credentials, permits, waivers, misassignments, and vacant positions for that year, with the department for the departments teaching assignment monitoring outcomes report and other state and federal reporting requirements.
(7)Once published, the commission shall post a link to the departments teaching assignment monitoring outcomes reporting on its internet website, with resources for local educational agencies seeking to maintain a fully credentialed and properly assigned educator workforce.
(8)Notwithstanding any other law, the commission, when identifying misassignments using the system, shall identify an educator in a teaching or services position, including an educator at a charter school, as correctly assigned only when the educator holds the certificate or credential required by the commission for that assignment in a noncharter public school, taking into account local assignment options.
(9)Commencing in the 202021 school year, a chartering authority, as provided in this section, may request technical assistance to assist in its determination of potential misassignments and vacant positions from the county office of education in the county in which the chartering authority is located.
(10)For a school district, the county superintendent of schools shall notify, through the office of the school district superintendent, a certificated school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment misassignment, and shall advise the school administrator to correct the assignment within 30 calendar days. For a charter school, the monitoring authority shall notify the charter school administrator responsible for the assignment of a certificated person to a position for which the person has no legal authorization of the misassignment and shall advise the charter school administrator to correct the assignment within 30 calendar days.
(f)The system and the data reported from the system shall not be used by a local educational agency for purposes of evaluating certificated employees, certificated employee performance determinations, or employment decisions.
(g)If an employee, including an employee who is employed by a charter school, is required by a local educational agency to accept an assignment in a teaching or services position for which the employee has no legal authorization, all of the following shall occur:
(1)(A)After exhausting existing local remedies, an employee of a school district shall notify the superintendent of the school district, and an employee of a charter school shall notify the administrator of the charter school, in writing, of the illegal assignment.
(B)If no action is taken after the notice required pursuant to subparagraph (A), an employee of a school district shall notify the county superintendent of schools, and an employee of a charter school shall notify the chartering authority, in writing, of the illegal assignment.
(2)In the case of an assignment by a school district for which the employee has filed a notice that the employee has no legal authorization, the school district or county superintendent of schools shall advise the employee about the legality of the assignment within 15 working days. In the case of an assignment by a charter school for which the employee has filed a notice that the employee has no legal authorization, the administrator of the charter school or the chartering authority shall advise the employee about the legality of the assignment within 15 working days.
(3)A local educational agency shall not take adverse action against an employee who files a notice of misassignment pursuant to paragraph (1).
(4)Notwithstanding any other law, for purposes of a charter school authorized by the state board, the employee shall file the written notices regarding misassignment described in paragraph (1) with the commission.
(5)During the period of a misassignment, the certificated employee who files a written notice pursuant to subparagraph (B) of paragraph (1) shall be exempt from Section 45034.
(6)If it is determined that a misassignment has occurred, a performance evaluation pursuant to Article 11 (commencing with Section 44660) of Chapter 3 of the certificated employee in the misassignment shall be nullified.
(7)A certificated employee who has not attained permanent status is subject to the protections described in this subdivision and subdivision (f) even if the certificated employee does not provide notice pursuant to paragraph (1).
(h)For the 201920 school year, the final data file generated by the system to identify misassignments and vacant positions shall be nonconsequential and shall be provided to the department, local educational agencies, and monitoring authorities by the commission for informational purposes only.
(i)Commencing with the 202021 school year, and each school year thereafter, following the 90-day review period provided for monitoring authorities pursuant to subdivision (e), the commission shall do all of the following:
(1)Ensure local educational agencies have access to the results of the systems process of assignment monitoring to support local continuous improvement efforts.
(2)Publish annual certificated educator assignment data that reflects the level of preparation and licensure of educators serving California pupils. This data shall include comprehensive information on all educator assignments, including those filled by individuals on permits or waivers, intern credentials, and preliminary or clear credentials, and those properly assigned and misassigned, at the schoolsite, local educational agency, county, and state level. The commission may also publish data on educators serving on administrative and pupil services credentials, educator preparation pathways, and educator retention, and whether certificated staff are employed in K12 education.
(3)Support the department to do all of the following:
(A)Make annual educator assignment, misassignment, and vacant position data generated by the system publicly available in a searchable format on the departments internet website. Data shall be updated annually and provide comprehensive information on teaching assignment outcomes inclusive of all educator classifications at the schoolsite, school district, and county level.
(B)Ensure that data for charter schools is distinguishable from data for noncharter public schools when made publicly available in a searchable format.
(C)Maintain each years data for no less than five years.
(D)Ensure that the publicly available misassignment data reported from the system shall not include any personally identifiable information, including names, social security numbers, home addresses, telephone numbers, or email addresses of individual educators.
(j)The commission may promulgate regulations that define standards for a local educational agency, including a charter school, that consistently misassigns educators and what sanctions, if any, to impose on that local educational agency.
(k)(1)On or before December 1, 2022, the commission shall report to the appropriate policy and fiscal committees of the Legislature on the development of the system, including, but not limited to, all of the following:
(A)The development and current status of the system.
(B)The ability of the system to efficiently produce accurate annual data on teacher misassignments.
(C)Statewide information regarding misassignments, delineated by credential type, assignment, and type of school.
(D)Use of local assignment options, delineated by local assignment option and type of school.
(E)Any recommendations to improve the system and the local assignment monitoring process required by this section.
(F)Identification of any need for further technical assistance for local educational agencies, including chartering authorities, to improve assignment monitoring and reduce the overall rate of misassignment.
(2)Pursuant to Section 10231.5 of the Government Code, the reporting requirement described in paragraph (1) shall be inoperative on December 1, 2026.
(l)This section shall not relieve a local educational agency from compliance with state and federal law regarding teachers of English learners or be construed to alter the definition of misassignment for purposes of Section 33126 or the definition of vacancy for purposes of Section 35186.
(m)A teacher of a course offered by a local educational agency in which pupils receive course credit or that counts towards instructional minutes, or both, shall hold the certificate, permit, or other document required by the commission for that assignment and shall be monitored.
SEC. 2.SEC. 24.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
SEC. 25.Section 47604.32 of the Education Code is amended to read:47604.32.(a)Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority:
(1)Identify at least one staff member as a contact person for the charter school.
(2)Visit each charter school schoolsite, resource center, meeting space, and satellite facility at least annually.
(3)Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5.
(4)Monitor the fiscal condition of each charter school under its authority.
(5)Provide timely notification to the department if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
(A)A renewal of the charter is granted or denied.
(B)The charter is revoked.
(C)The charter school will cease operation for any reason.
(6)(A)Annually verify all of the following for a nonclassroom-based charter school:
(i)The percentage of pupils engaged in classroom-based instruction submitted by the charter school pursuant to Section 47634.2.
(ii)The average-daily-attendance-to-certificated-teacher ratio used by the charter school pursuant to Section 51745.6, across a teachers entire assignment. For charter schools that assign teachers to provide instruction to pupils enrolled at more than one charter school, include all pupils receiving instruction from the teacher in the pupil-to-teacher ratio.
(iii)(I)Average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school to determine enrollment and attendance trends and averages.
(II)Monthly enrollment reports shall reflect sufficient details by month and, if applicable, by track, including beginning enrollment, additions, subtractions, and transfers, reconciled to ending enrollment. Attendance reports shall reflect sufficient details to enable the chartering authority to determine a reasonable alignment of enrollment to attendance. Compare enrollment reports with the charter petition and budget projections.
(III)Types of analysis regarding both enrollment and attendance trends and averages may include, but are not limited to, all of the following:
(ia)A comparison of the total first, second, and annual principal apportionment attendance to the total respective data reported in the prior year.
(ib)A comparison of California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data to first and second period principal apportionment attendance using historical ratios.
(ic)Comparable trending of enrollment and attendance in a given period by increases or decreases of 5 percent or more.
(IV)Types of analysis regarding the average-daily-attendance-to-certificated-teacher ratio across a teachers entire assignment may include, but shall not be limited to, comparing the charter school ratio to the chartering authority independent study ratio, if applicable, and comparing the charter school ratio to the ratio of the high school or unified school district with the largest average daily attendance of pupils, as described in Section 51745.6, in the county.
(V)If the enrollment or attendance verification fails to support the applicable first, second, or annual principal apportionment reporting, including subsequent corrected reports, submitted to the chartering authority, the chartering authority shall not certify the applicable principal apportionment report.
(B)A charter school shall provide the chartering authority the necessary supporting documentation in order for the chartering authority to perform the verification described in subparagraph (A).
(7)A chartering authority shall notify the certified public accountant or public accountant performing the audit of a charter school if a charter school does not provide the required documentation pursuant to paragraph (6). Failure of a charter school to provide the documentation required pursuant to paragraph (6) shall result in the certified public accountant or public accountant performing the audit reporting an attendance apportionment finding in their annual audit report and a corresponding reduction in allowable attendance apportionment by the charter school.
(b)The cost of performing the duties required by this section shall be funded with supervisorial oversight fees collected pursuant to Section 47613.
SEC. 26.Section 47604.35 is added to the Education Code, immediately following Section 47604.33, to read:47604.35.To ensure consistency in financial reporting, and promote transparency and accountability of all local educational agencies, the state board, in consultation with the Superintendent, shall revise regulations to require that charter schools report periodic and annual financial data in the same manner and on the same form prescribed for school districts in accordance with all of the following:
(a)Charter schools with an average daily attendance of 5,000 or more pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202627 fiscal year.
(b)Charter schools with an average daily attendance of 2,500 or more pupils but fewer than 5,000 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202728 fiscal year.
(c)Charter schools with an average daily attendance of fewer than 2,500 pupils shall report periodic and annual financial data in the same manner and on the same form prescribed for school districts commencing with the 202829 fiscal year.
SEC. 27.Section 47605 of the Education Code is amended to read:47605.(a)(1)Except as set forth in paragraph (2), a petition for the establishment of a charter school within a school district may be circulated by one or more persons seeking to establish the charter school. A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition. The petition may be submitted to the governing board of the school district for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or legal guardians of pupils that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the charter school for its first year of operation.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the charter school during its first year of operation.
(2)A petition that proposes to convert an existing public school to a charter school that would not be eligible for a loan pursuant to subdivision (c) of Section 41365 may be circulated by one or more persons seeking to establish the charter school. The petition may be submitted to the governing board of the school district for review after the petition is signed by not less than 50 percent of the permanent status teachers currently employed at the public school to be converted.
(3)A petition shall include a prominent statement that a signature on the petition means that the parent or legal guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(4)After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels shall request a material revision to its charter and shall notify the chartering authority of those additional locations or grade levels. The chartering authority shall consider whether to approve those additional locations or grade levels at an open, public meeting. If the additional locations or grade levels are approved pursuant to the standards and criteria described in subdivision (c), they shall be a material revision to the charter schools charter.
(5)(A)A charter school that established one site outside the boundaries of the school district, but within the county in which that school district is located before January 1, 2020, may continue to operate that site until the charter school submits a request for the renewal of its charter petition. To continue operating the site, the charter school shall do either of the following:
(i)First, before submitting the request for the renewal of the charter petition, obtain approval in writing from the school district where the site is operating.
(ii)Submit a request for the renewal of the charter petition pursuant to Section 47607 to the school district in which the charter school is located.
(B)If a Presidential declaration of a major disaster or emergency is issued in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.) for an area in which a charter schoolsite is located and operating, the charter school, for not more than five years, may relocate that site outside the area subject to the Presidential declaration if the charter school first obtains the written approval of the school district where the site is being relocated to.
(C)Notwithstanding subparagraph (A), if a charter school was relocated from December 31, 2016, to December 31, 2019, inclusive, due to a Presidential declaration of a major disaster or emergency in accordance with the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), that charter school shall be allowed to return to its original campus location in perpetuity.
(D)(i)A charter school in operation and providing educational services to pupils before October 1, 2019, located on a federally recognized California Indian reservation or rancheria or operated by a federally recognized California Indian tribe shall be exempt from the geographic restrictions of paragraph (1) and subparagraph (A) of this paragraph and the geographic restrictions of subdivision (a) of Section 47605.1.
(ii)The exemption to the geographic restrictions of subdivision (a) of Section 47605.1 in clause (i) does not apply to nonclassroom-based charter schools operating pursuant to Section 47612.5.
(E)The department shall regard as a continuing charter school for all purposes a charter school that was granted approval of its petition, that was providing educational services to pupils before October 1, 2019, and is authorized by a different chartering authority due to changes to this paragraph that took effect January 1, 2020. This paragraph shall be implemented only to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(6)Commencing January 1, 2003, a petition to establish a charter school shall not be approved to serve pupils in a grade level that is not served by the school district of the governing board considering the petition, unless the petition proposes to serve pupils in all of the grade levels served by that school district.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the governing board of the school district shall hold a public hearing on the provisions of the charter, at which time the governing board of the school district shall consider the level of support for the petition by teachers employed by the school district, other employees of the school district, and parents. Following review of the petition and the public hearing, the governing board of the school district shall either grant or deny the charter within 90 days of receipt of the petition, provided, however, that the date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the governing board of the school district for purposes of commencing the timelines described in this subdivision on the day the petitioner submits a petition to the district office, along with a signed certification that the petitioner deems the petition to be complete. The governing board of the school district shall publish all staff recommendations, including the recommended findings and, if applicable, the certification from the county superintendent of schools prepared pursuant to paragraph (8) of subdivision (c), regarding the petition at least 15 days before the public hearing at which the governing board of the school district will either grant or deny the charter. At the public hearing at which the governing board of the school district will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings.
(c)In reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. The governing board of the school district shall grant a charter for the operation of a school under this part if it is satisfied that granting the charter is consistent with sound educational practice and with the interests of the community in which the school is proposing to locate. The governing board of the school district shall consider the academic needs of the pupils the school proposes to serve. The governing board of the school district shall not deny a petition for the establishment of a charter school unless it makes written factual findings, specific to the particular petition, setting forth specific facts to support one or more of the following findings:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will serve high school pupils, the manner in which the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered transferable and courses approved by the University of California or the California State University as creditable under the A to G admissions criteria may be considered to meet college entrance requirements.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and attitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(E)The qualifications to be met by individuals to be employed by the charter school.
(F)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(G)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils, as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the school district to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(H)Admission policies and procedures, consistent with subdivision (e).
(I)The manner in which annual, independent financial audits shall be conducted, which shall employ generally accepted accounting principles, and the manner in which audit exceptions and deficiencies shall be resolved to the satisfaction of the chartering authority.(J)(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that are consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(K)(J)The manner by which staff members of the charter schools will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(L)(K)The public school attendance alternatives for pupils residing within the school district who choose not to attend charter schools.
(M)(L)The rights of an employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school.
(N)(M)The procedures to be followed by the charter school and the chartering authority to resolve disputes relating to provisions of the charter.
(O)(N)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)The petition does not contain a declaration of whether or not the charter school shall be deemed the exclusive public employer of the employees of the charter school for purposes of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(7)The charter school is demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate. Analysis of this finding shall include consideration of the fiscal impact of the proposed charter school. A written factual finding under this paragraph shall detail specific facts and circumstances that analyze and consider the following factors:
(A)The extent to which the proposed charter school would substantially undermine existing services, academic offerings, or programmatic offerings.
(B)Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.
(8)(A)The school district is not positioned to absorb the fiscal impact of the proposed charter school. A school district satisfies this paragraph if it has under either of the following conditions:
(i)The school district has a qualified interim certification pursuant to Section 42131 and the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Assistance Team, certifies that approving the charter school would result in the school district having a negative interim certification pursuant to Section 42131, has a negative interim certification pursuant to Section 42131, or is under state receivership. Charter
(ii)For the period of time that a county superintendent of schools is authorized to reassume the legal rights, duties, and powers of the governing board of the school district pursuant to subdivision (h) of Section 41326, the school district has exited state receivership and has a qualified interim certification pursuant to Section 42131 or the county superintendent of schools, in consultation with the County Office Fiscal Crisis and Management Team, certifies that approving the charter school would result in the school district having a qualified or negative interim certification pursuant to Section 42131.
(B)Charter schools proposed in a school district satisfying one of these the conditions specified in subparagraph (A) shall be subject to a rebuttable presumption of denial.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall, on a regular basis, consult with their parents, legal guardians, and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against a pupil on the basis of the characteristics listed in Section 220. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of that pupils parent or legal guardian, within this state, except that an existing public school converting partially or entirely to a charter school under this part shall adopt and maintain a policy giving admission preference to pupils who reside within the former attendance area of that public school.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the school district except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the chartering authority shall make reasonable efforts to accommodate the growth of the charter school and shall not take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days, and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (J) (I) of paragraph (5) of subdivision (c).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contracts Code.
(f)The governing board of a school district shall not require an employee of the school district to be employed in a charter school.
(g)The governing board of a school district shall not require a pupil enrolled in the school district to attend a charter school.
(h)The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school and upon the school district. The description of the facilities to be used by the charter school shall specify where the charter school intends to locate. The petitioner or petitioners also shall be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the school district, the governing board of the school district shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the governing board of the school district, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the applicable county superintendent of schools, the department, and the state board.
(k)(1)(A)(i)If the governing board of a school district denies a petition, the petitioner may elect to submit the petition for the establishment of a charter school to the county board of education. The petitioner shall submit the petition to the county board of education within 30 days of a denial by the governing board of the school district. At the same time the petition is submitted to the county board of education, the petitioner shall also provide a copy of the petition to the school district. The county board of education shall review the petition pursuant to subdivisions (b) and (c). If the petition submitted on appeal contains new or different material terms, the county board of education shall immediately remand the petition to the governing board of the school district for reconsideration, which shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition for the establishment of a charter school to the county board of education.
(ii)The county board of education shall review the appeal petition pursuant to subdivision (c). If the denial of the petition was made pursuant to paragraph (8) of subdivision (c), the county board of education shall also review the school districts findings pursuant to paragraph (8) of subdivision (c).
(iii)As used in this subdivision, material terms of the petition means the signatures, affirmations, disclosures, documents, and descriptions described in subdivisions (a), (b), (c), and (h), but shall not include minor administrative updates to the petition or related documents due to changes in circumstances based on the passage of time related to fiscal affairs, facilities arrangements, or state law, or to reflect the county board of education as the chartering authority.
(B)If the governing board of a school district denies a petition and the county board of education has jurisdiction over a single school district, the petitioner may elect to submit the petition for the establishment of a charter school to the state board. The state board shall review a petition submitted pursuant to this subparagraph pursuant to subdivision (c). If the denial of a charter petition is reversed by the state board pursuant to this subparagraph, the state board shall designate the governing board of the school district in which the charter school is located as the chartering authority.
(2)If the county board of education denies a petition, the petitioner may appeal that denial to the state board.
(A)The petitioner shall submit the petition to the state board within 30 days of a denial by the county board of education. The petitioner shall include the findings and documentary record from the governing board of the school district and the county board of education and a written submission detailing, with specific citations to the documentary record, how the governing board of the school district and the county board of education abused their discretion. The governing board of the school district and county board of education shall prepare the documentary record, including transcripts of the public hearing at which the governing board of the school district and county board of education denied the charter, at the request of the petitioner. The documentary record shall be prepared by the governing board of the school district and county board of education no later than 10 business days after the request of the petitioner is made. At the same time the petition and supporting documentation is submitted to the state board, the petitioner shall also provide a copy of the petition and supporting documentation to the school district and the county board of education.
(B)If the appeal contains new or different material terms, as defined in clause (iii) of subparagraph (A) of paragraph (1), the state board shall immediately remand the petition to the governing board of the school district to which the petition was submitted for reconsideration. The governing board of the school district shall grant or deny the petition within 30 days. If the governing board of the school district denies a petition after reconsideration, the petitioner may elect to resubmit the petition to the state board.
(C)Within 30 days of receipt of the appeal submitted to the state board, the governing board of the school district or county board of education may submit a written opposition to the state board detailing, with specific citations to the documentary record, how the governing board of the school district or the county board of education did not abuse its discretion in denying the petition. The governing board of the school district or the county board of education may submit supporting documentation or evidence from the documentary record that was considered by the governing board of the school district or the county board of education.
(D)The state boards Advisory Commission on Charter Schools shall hold a public hearing to review the appeal and documentary record. Based on its review, the Advisory Commission on Charter Schools shall submit a recommendation to the state board whether there is sufficient evidence to hear the appeal or to summarily deny review of the appeal based on the documentary record. If the Advisory Commission on Charter Schools does not submit a recommendation to the state board, the state board shall consider the appeal, and shall either hear the appeal or summarily deny review of the appeal based on the documentary record at a regular public meeting of the state board.
(E)The state board shall either hear the appeal or summarily deny review of the appeal based on the documentary record. If the state board hears the appeal, the state board may affirm the determination of the governing board of the school district or the county board of education, or both of those determinations, or may reverse only upon a determination that there was an abuse of discretion by each of the governing board of the school district and the county board of education. Abuse of discretion is the most deferential standard of review, under which the state board must give deference to the decisions of the governing board of the school district and the county board of education to deny the petition. If the denial of a charter petition is reversed by the state board, the state board shall designate, in consultation with the petitioner, either the governing board of the school district or the county board of education in which the charter school is located as the chartering authority.
(3)A charter school for which a charter is granted by either the county board of education or the state board based on an appeal pursuant to this subdivision shall qualify fully as a charter school for all funding and other purposes of this part.
(4)A charter school that receives approval of its petition from a county board of education or from the state board on appeal shall be subject to the same requirements concerning geographic location to which it would otherwise be subject if it received approval from the chartering authority to which it originally submitted its petition. A charter petition that is submitted to either a county board of education or to the state board shall meet all otherwise applicable petition requirements, including the identification of the proposed site or sites where the charter school will operate.
(5)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the governing board of the school district in which the charter school is located, the department, and the state board.
(6)If either the county board of education or the state board fails to act on a petition within 180 days of receipt, the decision of the governing board of the school district to deny the petition shall be subject to judicial review.
(l)(1)Teachers in charter schools Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated teachers, positions, in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)By July 1, 2020, all teachers in charter schools shall obtain a certificate of clearance and satisfy the requirements for professional fitness pursuant to Sections 44339, 44340, and 44341.
(3)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools, and shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall transmit a copy of its annual, independent financial audit report for the preceding fiscal year, as described in subparagraph (I) of paragraph (5) of subdivision (c), to its chartering authority, the Controller, the county superintendent of schools of the county in which the charter school is sited, unless the county board of education of the county in which the charter school is sited is the chartering authority, and the department by December 15 of each year. This subdivision does not apply if the audit of the charter school is encompassed in the audit of the chartering authority pursuant to conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement, but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 28.Section 47605.6 of the Education Code is amended to read:47605.6.(a)(1)In addition to the authority provided by Section 47605.5, a county board of education may also approve a petition for the operation of a charter school that operates at one or more sites within the geographic boundaries of the county and that provides instructional services that are not generally provided by a county office of education. A county board of education may approve a countywide charter only if it finds, in addition to the other requirements of this section, that the educational services to be provided by the charter school will offer services to a pupil population that will benefit from those services and that cannot be served as well by a charter school that operates in only one school district in the county. A petition for the establishment of a countywide charter school pursuant to this subdivision may be circulated throughout the county by any one or more persons seeking to establish the charter school. The petition may be submitted to the county board of education for review after either of the following conditions is met:
(A)The petition is signed by a number of parents or guardians of pupils residing within the county that is equivalent to at least one-half of the number of pupils that the charter school estimates will enroll in the school for its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(B)The petition is signed by a number of teachers that is equivalent to at least one-half of the number of teachers that the charter school estimates will be employed at the school during its first year of operation and each of the school districts where the charter school petitioner proposes to operate a facility has received at least 30 days notice of the petitioners intent to operate a charter school pursuant to this section.
(2)An existing public school shall not be converted to a charter school in accordance with this section.
(3)After receiving approval of its petition, a charter school that proposes to establish operations at additional sites within the geographic boundaries of the county board of education shall notify the school districts where those sites will be located. The charter school shall also request a material revision of its charter by the county board of education that approved its charter and the county board of education shall consider whether to approve those additional locations at an open, public meeting, held no sooner than 30 days following notification of the school districts where the sites will be located. If approved, the location of the approved sites shall be a material revision of the charter schools approved charter.
(4)A petition shall include a prominent statement indicating that a signature on the petition means that the parent or guardian is meaningfully interested in having their child or ward attend the charter school, or in the case of a teachers signature, means that the teacher is meaningfully interested in teaching at the charter school. The proposed charter shall be attached to the petition.
(b)No later than 60 days after receiving a petition, in accordance with subdivision (a), the county board of education shall hold a public hearing on the provisions of the charter, at which time the county board of education shall consider the level of support for the petition by teachers, parents or guardians, and the school districts where the charter school petitioner proposes to place school facilities. Following review of the petition and the public hearing, the county board of education shall either grant or deny the charter within 90 days of receipt of the petition. However, this date may be extended by an additional 30 days if both parties agree to the extension. A petition is deemed received by the county board of education for purposes of commencing the timelines described in this subdivision when the petitioner submits a petition, in accordance with subparagraph (A) or (B) of paragraph (1) of subdivision (a), to the county office of education. The county board of education shall publish all staff recommendations, including the recommended findings, regarding the petition at least 15 days before the public hearing at which the county board of education will either grant or deny the charter. At the public hearing at which the county board of education will either grant or deny the charter, petitioners shall have equivalent time and procedures to present evidence and testimony to respond to the staff recommendations and findings. A county board of education may impose any additional requirements beyond those required by this section that it considers necessary for the sound operation of a countywide charter school. A county board of education may grant a charter for the operation of a charter school under this part only if it is satisfied that granting the charter is consistent with sound educational practice and that the charter school has reasonable justification for why it could not be established by petition to a school district pursuant to Section 47605. The county board of education shall deny a petition for the establishment of a charter school if it finds one or more of the following:
(1)The charter school presents an unsound educational program for the pupils to be enrolled in the charter school.
(2)The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.
(3)The petition does not contain the number of signatures required by subdivision (a).
(4)The petition does not contain an affirmation of each of the conditions described in subdivision (e).
(5)The petition does not contain reasonably comprehensive descriptions of all of the following:
(A)(i)The educational program of the charter school, designed, among other things, to identify those pupils whom the charter school is attempting to educate, what it means to be an educated person in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.
(ii)The annual goals for the charter school for all pupils and for each subgroup of pupils identified pursuant to Section 52052, to be achieved in the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school, and specific annual actions to achieve those goals. A charter petition may identify additional school priorities, the goals for the school priorities, and the specific annual actions to achieve those goals.
(iii)If the proposed charter school will enroll high school pupils, the manner in which the charter school will inform parents regarding the transferability of courses to other public high schools. Courses offered by the charter school that are accredited by the Western Association of Schools and Colleges may be considered to be transferable to other public high schools.
(iv)If the proposed charter school will enroll high school pupils, information as to the manner in which the charter school will inform parents as to whether each individual course offered by the charter school meets college entrance requirements. Courses approved by the University of California or the California State University as satisfying their prerequisites for admission may be considered as meeting college entrance requirements for purposes of this clause.
(B)The measurable pupil outcomes identified for use by the charter school. Pupil outcomes, for purposes of this part, means the extent to which all pupils of the charter school demonstrate that they have attained the skills, knowledge, and aptitudes specified as goals in the charter schools educational program. Pupil outcomes shall include outcomes that address increases in pupil academic achievement both schoolwide and for all pupil subgroups served by the charter school, as that term is defined in subdivision (a) of Section 52052. The pupil outcomes shall align with the state priorities, as described in subdivision (d) of Section 52060, that apply for the grade levels served by the charter school.
(C)The method by which pupil progress in meeting those pupil outcomes is to be measured. To the extent practicable, the method for measuring pupil outcomes for state priorities shall be consistent with the way information is reported on a school accountability report card.
(D)The location of each charter school facility that the petitioner proposes to operate.
(E)The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.
(F)The qualifications to be met by individuals to be employed by the charter school.
(G)The procedures that the charter school will follow to ensure the health and safety of pupils and staff. These procedures shall require all of the following:
(i)That each employee of the charter school furnish the charter school with a criminal record summary as described in Section 44237.
(ii)For all schools, the development of a school safety plan, which shall include the safety topics listed in subparagraphs (A) to (M), inclusive, of paragraph (2) of subdivision (a) of Section 32282. For schools serving pupils in any of grades 7 to 12, inclusive, the development of a school safety plan shall also include the safety topic listed in subparagraph (N) of paragraph (2) of subdivision (a) of Section 32282.
(iii)That the school safety plan be reviewed and updated by March 1 of every year by the charter school.
(H)The means by which the charter school will achieve a balance of racial and ethnic pupils, special education pupils, and English learner pupils, including redesignated fluent English proficient pupils as defined by the evaluation rubrics in Section 52064.5, that is reflective of the general population residing within the territorial jurisdiction of the county board of education to which the charter petition is submitted. Upon renewal, for a charter school not deemed to be a local educational agency for purposes of special education pursuant to Section 47641, the chartering authority may consider the effect of school placements made by the chartering authority in providing a free and appropriate public education as required by the federal Individuals with Disabilities Education Act (Public Law 101-476), on the balance of pupils with disabilities at the charter school.
(I)The manner in which annual, independent financial audits shall be conducted, in accordance with regulations established by the state board, and the manner in which audit exceptions and deficiencies shall be resolved.(J)(I)The procedures by which pupils can be suspended or expelled from the charter school for disciplinary reasons or otherwise involuntarily removed from the charter school for any reason. These procedures, at a minimum, shall include an explanation of how the charter school will comply with federal and state constitutional procedural and substantive due process requirements that is consistent with all of the following:
(i)For suspensions of fewer than 10 days, provide oral or written notice of the charges against the pupil and, if the pupil denies the charges, an explanation of the evidence that supports the charges and an opportunity for the pupil to present the pupils side of the story.
(ii)For suspensions of 10 days or more and all other expulsions for disciplinary reasons, both of the following:
(I)Provide timely, written notice of the charges against the pupil and an explanation of the pupils basic rights.
(II)Provide a hearing adjudicated by a neutral officer within a reasonable number of days at which the pupil has a fair opportunity to present testimony, evidence, and witnesses and confront and cross-examine adverse witnesses, and at which the pupil has the right to bring legal counsel or an advocate.
(iii)Contain a clear statement that no pupil shall be involuntarily removed by the charter school for any reason unless the parent or guardian of the pupil has been provided written notice of intent to remove the pupil no less than five schooldays before the effective date of the action. The written notice shall be in the native language of the pupil or the pupils parent or guardian, or, if the pupil is a homeless child or youth, or a foster child or youth, in the native language of the homeless or foster childs educational rights holder. In the case of a foster child or youth, the written notice shall also be provided to the foster childs attorney and county social worker. If the pupil is an Indian child, as defined in Section 224.1 of the Welfare and Institutions Code, the written notice shall also be provided to the Indian childs tribal social worker and, if applicable, county social worker. The written notice shall inform the pupil, the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, and county social worker, or the Indian childs tribal social worker and, if applicable, county social worker of the right to initiate the procedures specified in clause (ii) before the effective date of the action. If the pupils parent or guardian, the homeless childs educational rights holder, the foster childs educational rights holder, attorney, or county social worker, or the Indian childs tribal social worker or, if applicable, county social worker initiates the procedures specified in clause (ii), the pupil shall remain enrolled and shall not be removed until the charter school issues a final decision. For purposes of this clause, involuntarily removed includes disenrolled, dismissed, transferred, or terminated, but does not include suspensions specified in clauses (i) and (ii).
(iv)A foster childs educational rights holder, attorney, and county social worker and an Indian childs tribal social worker and, if applicable, county social worker shall have the same rights a parent or guardian of a child has to receive a suspension notice, expulsion notice, manifestation determination notice, involuntary transfer notice, and other documents and related information.
(K)(J)The manner by which staff members of the charter school will be covered by the State Teachers Retirement System, the Public Employees Retirement System, or federal social security.
(L)(K)The procedures to be followed by the charter school and the county board of education to resolve disputes relating to provisions of the charter.
(M)(L)Admission policy and procedures, consistent with subdivision (e).
(N)(M)The public school attendance alternatives for pupils residing within the county who choose not to attend the charter school.
(O)(N)The rights of an employee of the county office of education, upon leaving the employment of the county office of education, to be employed by the charter school, and any rights of return to the county office of education that an employee may have upon leaving the employment of the charter school.
(P)(O)The procedures to be used if the charter school closes. The procedures shall ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records.
(6)A declaration of whether or not the charter school shall be deemed the exclusive public school employer of the employees of the charter school for purposes of the Educational Employment Relations Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code).
(7)Any other basis that the county board of education finds justifies the denial of the petition.
(c)A county board of education that approves a petition for the operation of a countywide charter may, as a condition of charter approval, enter into an agreement with a third party, at the expense of the charter school, to oversee, monitor, and report to the county board of education on the operations of the charter school. The county board of education may prescribe the aspects of the charter schools operations to be monitored by the third party and may prescribe appropriate requirements regarding the reporting of information concerning the operations of the charter school to the county board of education.
(d)(1)Charter schools shall meet all statewide standards and conduct the pupil assessments required pursuant to Section 60605 and any other statewide standards authorized in statute or pupil assessments applicable to pupils in noncharter public schools.
(2)Charter schools shall on a regular basis consult with their parents and teachers regarding the charter schools educational programs.
(e)(1)In addition to any other requirement imposed under this part, a charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations, shall not charge tuition, and shall not discriminate against any pupil on the basis of ethnicity, national origin, gender, gender identity, gender expression, or disability. Except as provided in paragraph (2), admission to a charter school shall not be determined according to the place of residence of the pupil, or of the pupils parent or guardian, within this state.
(2)(A)A charter school shall admit all pupils who wish to attend the charter school.
(B)If the number of pupils who wish to attend the charter school exceeds the charter schools capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the county except as provided for in Section 47614.5. Preferences, including, but not limited to, siblings of pupils admitted or attending the charter school and children of the charter schools teachers, staff, and founders identified in the initial charter, may also be permitted by the chartering authority on an individual charter school basis. Priority order for any preference shall be determined in the charter petition in accordance with all of the following:
(i)Each type of preference shall be approved by the chartering authority at a public hearing.
(ii)Preferences shall be consistent with federal law, the California Constitution, and Section 200.
(iii)Preferences shall not result in limiting enrollment access for pupils with disabilities, academically low-achieving pupils, English learners, neglected or delinquent pupils, homeless pupils, or pupils who are economically disadvantaged, as determined by eligibility for any free or reduced-price meal program, foster youth, or pupils based on nationality, race, ethnicity, or sexual orientation.
(iv)In accordance with Section 49011, preferences shall not require mandatory parental volunteer hours as a criterion for admission or continued enrollment.
(C)In the event of a drawing, the county board of education shall make reasonable efforts to accommodate the growth of the charter school and in no event shall take any action to impede the charter school from expanding enrollment to meet pupil demand.
(3)If a pupil is expelled or leaves the charter school without graduating or completing the school year for any reason, the charter school shall notify the superintendent of the school district of the pupils last known address within 30 days and shall, upon request, provide that school district with a copy of the cumulative record of the pupil, including report cards or a transcript of grades, and health information. If the pupil is subsequently expelled or leaves the school district without graduating or completing the school year for any reason, the school district shall provide this information to the charter school within 30 days if the charter school demonstrates that the pupil had been enrolled in the charter school. This paragraph applies only to pupils subject to compulsory full-time education pursuant to Section 48200.
(4)(A)A charter school shall not discourage a pupil from enrolling or seeking to enroll in the charter school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2).
(B)A charter school shall not request a pupils records or require a parent, guardian, or pupil to submit the pupils records to the charter school before enrollment.
(C)A charter school shall not encourage a pupil currently attending the charter school to disenroll from the charter school or transfer to another school for any reason, including, but not limited to, academic performance of the pupil or because the pupil exhibits any of the characteristics described in clause (iii) of subparagraph (B) of paragraph (2). This subparagraph shall not apply to actions taken by a charter school pursuant to the procedures described in subparagraph (J) (I) of paragraph (5) of subdivision (b).
(D)The department shall develop a notice of the requirements of this paragraph. This notice shall be posted on a charter schools internet website. A charter school shall provide a parent or guardian, or a pupil if the pupil is 18 years of age or older, a copy of this notice at all of the following times:
(i)When a parent, guardian, or pupil inquires about enrollment.
(ii)Before conducting an enrollment lottery.
(iii)Before disenrollment of a pupil.
(E)(i)A person who suspects that a charter school has violated this paragraph may file a complaint with the chartering authority.
(ii)The department shall develop a template to be used for filing complaints pursuant to clause (i).
(5)Notwithstanding any other law, a charter school in operation as of July 1, 2019, that operates in partnership with the California National Guard may dismiss a pupil from the charter school for failing to maintain the minimum standards of conduct required by the Military Department.
(6)A charter school shall, at a governing body meeting, obtain the approval of the governing body of the charter school for any contracts, as required pursuant to Section 20110 of the Public Contracts Code.
(f)The county board of education shall not require an employee of the county or a school district to be employed in a charter school.
(g)The county board of education shall not require a pupil enrolled in a county program to attend a charter school.
(h)The county board of education shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the charter school, the manner in which administrative services of the charter school are to be provided, and potential civil liability effects, if any, upon the charter school, any school district where the charter school may operate, and upon the county board of education. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cashflow and financial projections for the first three years of operation. If the charter school is to be operated by, or as, a nonprofit public benefit corporation, the petitioner shall provide the names and relevant qualifications of all persons whom the petitioner nominates to serve on the governing body of the charter school.
(i)In reviewing petitions for the establishment of charter schools within the county, the county board of education shall give preference to petitions that demonstrate the capability to provide comprehensive learning experiences to pupils identified by the petitioner or petitioners as academically low achieving pursuant to the standards established by the department under Section 54032, as that section read before July 19, 2006.
(j)Upon the approval of the petition by the county board of education, the petitioner or petitioners shall provide written notice of that approval, including a copy of the petition, to the school districts within the county, the Superintendent, and the state board.
(k)If a county board of education denies a petition, the petitioner shall not elect to submit the petition for the establishment of the charter school to the state board.
(l)(1)Teachers Teachers and service providers, including pupil personnel service providers, administrators, and any other positions for which certification qualifications are established pursuant to Chapter 2 (commencing with Section 44200) of Part 25 of Division 3 in charter schools shall be required to hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teachers certificated assignment. These documents shall be maintained on file at the charter school and shall be subject to periodic inspection by the chartering authority. A governing body of a direct-funded charter school may use local assignment options authorized in statute and regulations for the purpose of legally assigning individuals to certificated teachers, positions in accordance with all of the requirements of the applicable statutes or regulations in the same manner as a governing board of a school district. A charter school shall have authority to request an emergency permit or a waiver from the Commission on Teacher Credentialing for individuals in the same manner as a school district.
(2)The Commission on Teacher Credentialing shall include in the bulletins it issues pursuant to subdivision (k) of Section 44237 to provide notification to local educational agencies of any adverse actions taken against the holders of any commission documents, notice of any adverse actions taken against teachers employed by charter schools. The Commission on Teacher Credentialing shall make this bulletin available to all chartering authorities and charter schools in the same manner in which it is made available to local educational agencies.
(m)A charter school shall transmit a copy of its annual, independent, financial audit report for the preceding fiscal year, as described in subparagraph (I) of paragraph (5) of subdivision (b), to the county office of education, the Controller, and the department by December 15 of each year. This subdivision does not apply if the audit of the charter school is encompassed in the audit of the chartering authority pursuant to conduct an annual and independent financial audit that employs generally accepted accounting principles and is in accordance with Section 41020.
(n)A charter school may encourage parental involvement but shall notify the parents and guardians of applicant pupils and currently enrolled pupils that parental involvement is not a requirement for acceptance to, or continued enrollment at, the charter school.
(o)The requirements of this section shall not be waived by the state board pursuant to Section 33050 or any other law.
SEC. 29.Section 47605.8 is added to the Education Code, to read:47605.8.The state board shall appoint an advisory committee on charter schools. The advisory committee shall include, but shall not necessarily be limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent.
SEC. 30.Section 47605.10 is added to the Education Code, immediately following Section 47605.9, to read:47605.10.(a)Notwithstanding any other law, a school district shall be limited in the size of the totality of the nonclassroom-based charter schools that it may authorize in accordance with all of the following:
(1)A school district with an average daily attendance of fewer than 2,500 pupils shall not authorize a nonclassroom-based charter school or approve a material revision to expand an existing nonclassroom-based charter school to more than 100 percent of the average daily attendance of the school district authorizing the charter.
(2)A school district with an average daily attendance of 2,500 pupils or more but fewer than 5,000 pupils shall not authorize a nonclassroom-based charter school or approve a material revision to expand an existing nonclassroom-based charter school to an average daily attendance of more than 2,500 pupils.
(3)A school district with an average daily attendance of 5,000 pupils or more but fewer than 10,000 pupils shall not authorize a nonclassroom-based charter school or approve a material revision to expand an existing nonclassroom-based charter school to more than 50 percent of the average daily attendance of the school district authorizing the charter.
(b)For purposes of this section, the determination of the average daily attendance used shall be the second principal apportionment in the prior year.
(c)If the average daily attendance of a nonclassroom-based charter school exceeds the limits established in this section, the charter school shall, at the next renewal of the charter school, present their renewal to the existing chartering authority. If the chartering authority approves the renewal, the chartering authority shall notify the state board of the approval. The state board shall, in consultation with the charter school and the school district, assign a new school district with an average daily attendance that meets the requirements of this section to be the chartering authority of the charter school. If there is not a school district in the county where the chartering authority is located that meets the average daily attendance requirements of this section, the state board shall assign the county board of education in which the chartering authority is located as the chartering authority of the charter school.
SEC. 31.Section 47609 is added to the Education Code, to read:47609.(a)(1)The Charter Authorizing Support Team program is hereby established, to be administered by the County Office Fiscal Crisis and Management Assistance Team, in consultation with the department, as an initiative to expand uniform charter school authorizing and oversight practices in the state.
(2)(A)The program shall develop high-quality fiscal, academic, and governance oversight and monitoring tools for uniform charter school authorizing practices. The program shall employ the proposed values and principles to be developed by the advisory board for quality charter school authorizing practices, as provided in subdivision (d), as guidance. The program shall share and update developed tools and materials, as needed, to help strengthen charter school authorizing practices, with a special focus on chartering authorities with an average daily attendance of fewer than 2,500 pupils.
(B)Materials and trainings provided for in this section shall ensure consistent and transparent charter school authorizing processes across the state. The trainings shall be related to subjects including, but not limited to, the charter school petition review and appeal process, memorandum of understanding development, charter school oversight practices, the charter renewal process, and the charter school intervention and charter revocation process.
(b)Responsibilities of the County Office Fiscal Crisis and Management Assistance Team shall include all of the following:
(1)Acting as the fiscal agent for the program.
(2)(A)Collaborating with leading chartering authorities, county offices of education, and subject matter experts in the development and dissemination of high-quality charter school authorizing and oversight tools and best practices to ensure statewide consistency.
(B)Consulting with the state board in the development of high-quality charter school authorizing tools and best practices.
(3)Creating and maintaining an online database of materials and resources that can be adapted for use by chartering authorities.
(4)Facilitating an annual statewide conference for chartering authorities.
(5)Establishing and facilitating an advisory board, as provided in subdivision (e), to provide input on the development and full implementation of services provided by the program.
(6)Providing information, as requested, to the Legislative Analysts Office for purposes of subdivision (e) to measure the programs continual improvement and program fidelity, and to document the programs impact.
(7)Providing technical assistance and support to school districts and county offices of education when they have questions on the charter school petition review and appeal process, the charter renewal process, the charter school intervention and charter revocation processes, memorandum of understanding development, and the charter oversight process by and through all of the following:
(A)Establish and staff a help desk to respond to inquiries from chartering authorities and facilitate the connection between need and resources.
(B)Establish a community listserv for chartering authorities to ask each other questions, gather information, and generate feedback.
(C)Identify and maintain a list of school district and county office of education personnel designated as responsible for charter school authorizing or charter oversight activity. Chartering authorities shall be invited and encouraged to attend regional meetings and trainings to build their knowledge and expertise.
(D)Provide professional learning on best practices for the charter school petition review and appeal process, the charter renewal process, and adherence to timelines.
(E)Provide professional learning on best practices for the charter school intervention and charter revocation process.
(F)Provide professional learning on best practices for the charter oversight process, including ongoing monitoring and site reviews.
(c)In order to guide the preparation of materials and resources and provide professional learning opportunities consistent with its responsibilities, the program shall do all of the following:
(1)Seek input from chartering authorities across the state to determine the type of charter school materials, resources, training, and support needed in order to build the capacity of chartering authorities.
(2)Provide program data to assist in evaluating the effectiveness of the program in improving the quality of charter school authorizing practices.
(3)Offer outreach to chartering authorities that have not previously participated in program trainings or conferences.
(d)(1)An advisory board shall be appointed by the board of directors of the County Office Fiscal Crisis and Management Assistance Team, to be composed of 13 members, including five experienced professionals from chartering authorities, two certificated representatives, one classified representative, two representatives from other organizations with expertise in charter school authorizing, one charter school representative, one representative of the department, and the Chief Executive Officer of the County Office Fiscal Crisis and Management Assistance Team, or their designee.
(2)The board of directors of the County Office Fiscal Crisis and Management Assistance Team shall establish bylaws for the advisory board that, at a minimum, provide for all of the following:
(A)The role and functions of the advisory board.
(B)The process and qualifications for appointment as an advisory board member. At least one of the five experienced professionals from chartering authorities required in this subdivision shall be from a chartering authority with an average daily attendance of fewer than 2,500 pupils.
(C)The terms of advisory board members.
(D)The selection of a chairperson and vice chairperson, and the establishment of subcommittees.
(E)Meetings, including the frequency of meetings.
(F)The rules of order.
(G)The process for amending bylaws.
(3)Notwithstanding any other law, the advisory board shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
(4)The advisory board shall develop values and principles for charter school authorizing and oversight that will provide guidance for the preparation of materials and resources, professional learning opportunities, and conference materials. The values and principles developed by the advisory board shall include, but are not limited to, all of the following:
(A)That the actions and decisions of effective chartering authorities are guided by all of the following values:
(i)Responsibility: the duty to serve the states pupils and the public.
(ii)Integrity: adherence to moral and ethical principles in all aspects of charter school authorizing and oversight.
(iii)Fairness: impartial and just treatment of all stakeholders.
(iv)Knowledge: understanding of charter school law and practice.
(B)In complying with the requirements of this part, chartering authorities shall consider all of the following foundational principles:
(i)Through charter school approval and oversight, chartering authorities serve the interests of pupils and the public.
(ii)Chartering authorities hold charter schools accountable for results in exchange for the substantial autonomy the law grants to charter schools.
(iii)Accountability for results includes maintaining high standards for performance in academics, finance, personnel management, operations, and governance.
(iv)Standards for performance include ensuring access and pursuing achievement for all pupils.
(e)On or before December 1, 2030, the Legislative Analysts Office shall complete and submit to the Governor and the appropriate education policy and budget committees of the Legislature an evaluation of the program. The Legislative Analysts Office shall evaluate the programs effectiveness in administering training programs, outreach, and the participation of chartering authorities that have not participated in trainings and conferences during previous years, and make recommendations regarding the continuation of funding.
SEC. 32.Section 47612.5 of the Education Code is amended to read:47612.5.(a)Notwithstanding any other law and as a condition of apportionment, a charter school shall do all of the following:
(1)For each fiscal year, offer, at a minimum, the following number of minutes of instruction:
(A)To pupils in kindergarten, 36,000 minutes.
(B)To pupils in grades 1 to 3, inclusive, 50,400 minutes.
(C)To pupils in grades 4 to 8, inclusive, 54,000 minutes.
(D)To pupils in grades 9 to 12, inclusive, 64,800 minutes.
(2)Maintain written contemporaneous records that document all pupil attendance and make these records available for audit and inspection.
(3)Certify that its pupils have participated in the state testing programs specified in Chapter 5 (commencing with Section 60600) of Part 33 in the same manner as other pupils attending public schools as a condition of apportionment of state funding.
(b)Notwithstanding any other law and except to the extent inconsistent with this section and Section 47634.2, a charter school that provides independent study shall comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 and implementing regulations adopted thereunder. The state board shall adopt regulations that apply this article to charter schools. To the extent that these regulations concern the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(c)A reduction in apportionment made pursuant to subdivision (a) shall be proportional to the magnitude of the exception that causes the reduction. For purposes of paragraph (1) of subdivision (a), for each charter school that fails to offer pupils the minimum number of minutes of instruction specified in that paragraph, the Superintendent shall withhold from the charter schools apportionment for average daily attendance of the affected pupils, by grade level, the sum of that apportionment multiplied by the percentage of the minimum number of minutes of instruction at each grade level that the charter school failed to offer.
(d)(1)Notwithstanding any other law and except as provided in paragraph (1) of subdivision (e), a charter school that has an approved charter may receive funding for nonclassroom-based instruction only if a determination for funding is made pursuant to Section 47634.2 by the state board. The determination for funding shall be subject to any conditions or limitations the state board may prescribe. The state board shall adopt regulations on or before February 1, 2002, that define and establish general rules governing nonclassroom-based instruction that apply to all charter schools and to the process for determining funding of nonclassroom-based instruction by charter schools offering nonclassroom-based instruction other than the nonclassroom-based instruction allowed by paragraph (1) of subdivision (e). Nonclassroom-based instruction includes, but is not limited to, independent study, home study, work study, and distance and computer-based education. In prescribing any conditions or limitations relating to the qualifications of instructional personnel, the state board shall be guided by subdivision (l) of Section 47605.
(2)Except as provided in paragraph (2) of subdivision (b) of Section 47634.2, a charter school that receives a determination pursuant to subdivision (b) of Section 47634.2 is not required to reapply annually for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the board. A charter school that has achieved a rank of 6 or greater on the Academic Performance Index for the two years immediately before receiving a funding determination pursuant to subdivision (b) of Section 47634.2 shall receive a five-year determination and is not required to annually reapply for a funding determination of its nonclassroom-based instruction program if an update of the information the state board reviewed when initially determining funding would not require material revision, as that term is defined in regulations adopted by the state board. Notwithstanding any law, the state board may require a charter school to provide updated information at any time it determines that a review of that information is necessary. The state board may terminate a determination for funding if updated or additional information requested by the board is not made available to the board by the charter school within a reasonable amount of time or if the information otherwise supports termination. A determination for funding pursuant to Section 47634.2 shall not exceed five years.(3)A charter school that offers nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2 to receive funding each time its charter is renewed or materially revised pursuant to Section 47607. A charter school that materially revises its charter to offer nonclassroom-based instruction in excess of the amount authorized by paragraph (1) of subdivision (e) is subject to the determination for funding requirement of Section 47634.2.(e)(1)Notwithstanding any other law, and as a condition of apportionment, classroom-based instruction in a charter school, for purposes of this part, occurs only when charter school pupils are engaged in educational activities required of those pupils and are under the immediate supervision and control of an employee of the charter school who possesses a valid certification document registered as required by law. For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter school shall be at the schoolsite, and the charter school shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required to be offered pursuant to paragraph (1) of subdivision (a).
(2)For the purposes of this part, nonclassroom instruction or nonclassroom-based instruction means instruction that does not meet the requirements specified in paragraph (1). The state board may adopt regulations pursuant to paragraph (1) of subdivision (d) specifying other conditions or limitations on what constitutes nonclassroom-based instruction, as it deems appropriate and consistent with this part.
(3)For purposes of this part, a schoolsite is a facility that is used principally for classroom instruction.
(4)For purposes of this part, virtual charter school means a school that provides less than 20 percent of in-person instruction, excluding services provided through an individualized education program or federal or state required assessments that are completed in person.
(4)(5)Notwithstanding any other law, neither the state board nor and the Superintendent may shall not waive the requirements of paragraph (1) of subdivision (a).
SEC. 33.Section 47612.7 of the Education Code is amended to read:47612.7.(a)Notwithstanding any other law and except as provided in subdivision (b), from January 1, 2020, to January 1, 2026, December 31, 2025, inclusive, the approval of a petition for the establishment of a new charter school, as defined in paragraph (2) of subdivision (e) of Section 47612.5, is prohibited.
(b)Subdivision (a) shall not apply to a nonclassroom-based charter school that was granted approval of its petition and providing educational services to pupils before October 1, 2019, under either of the following circumstances:
(1)If Assembly Bill 1507 of the 201920 Regular Session amends Section 47605.1 and becomes operative on January 1, 2020, and the charter school is required to submit a petition to the governing board of a school district or county board of education in an adjacent county in which its existing resource center is located in order to comply with Section 47605.1, as amended by Assembly Bill 1507 of the 201920 Regular Session, or to retain current program offerings or enrollment.
(2)If a charter school is required to submit a petition to a school district or county board of education in which a resource center is located in order to comply with the court decision in Anderson Union High School District v. Shasta Secondary Home School (2016) 4 Cal.App.5th 262, or other relevant court ruling, and the petition is necessary to retain current program offerings or enrollment.
(3)A charter school authorized by a different chartering authority pursuant to paragraphs (1) and (2) shall be regarded by the department as a continuing charter school for all purposes to the extent it does not conflict with federal law. In order to prevent any potential conflict with federal law, this paragraph does not apply to covered programs as identified in Section 8101(11) of the federal Elementary and Secondary Education Act of 1965 (20 U.S.C. Sec. 7801) to the extent the affected charter school is the restructured portion of a divided charter school pursuant to Section 47654.
(c)Notwithstanding Section 33050 or any other law, the state board shall not waive the restrictions described in this section.
(d)(1)No later than October 1, 2023, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall study the processes used to determine funding for nonclassroom-based charter schools.
(2)The study shall identify and make recommendations on potential improvements to the processes, including recommendations for enhancing oversight and reducing fraud, waste, and abuse.
(3)No later than March 1, 2024, the Legislative Analyst and the County Office Fiscal Crisis and Management Assistance Team shall report to the appropriate fiscal and policy committees of the Legislature, the Department of Finance, the department, and the executive director of the state board on recommendations and observations as a result of the study. These recommendations or observations shall consider the fiscal impact on the state.
(e)This section shall remain in effect only until January 1, 2027, 2026, and as of that date is repealed.
SEC. 34.Section 47613 of the Education Code is amended to read:47613.(a)Except as set forth in subdivision (b), (1)For the 202627 fiscal year, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 1 percent of the revenue of the charter school.
(2)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).
(b)(1)For the 202728 fiscal year, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 2 percent of the revenue of the charter school.
(2)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).
(b)A chartering(c)(1)Commencing July 1, 2028, and for each fiscal year thereafter, a chartering authority may charge for the actual costs of supervisorial oversight of a charter school not to exceed 3 percent of the revenue of the charter school if the charter school is able to obtain substantially rent free facilities from the chartering authority. school.
(c)A local educational agency that is given the responsibility for supervisorial oversight of a charter school, pursuant to paragraph (1) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to secure charter school funding. A charter school that is charged for costs under this subdivision may not be charged pursuant to subdivision (a) or (b).(2)A local educational agency that is designated as the chartering authority pursuant to subdivision (b) or (c) of Section 47605.9, or pursuant to subparagraph (E) of paragraph (2) of subdivision (k) of Section 47605, may charge for the actual costs of supervisorial oversight, and administrative costs necessary to perform the oversight duties listed in Section 47604.32. A charter school that is charged for costs under this paragraph shall not be charged pursuant to paragraph (1).
(d)If a charter school is able to obtain substantially rent-free facilities from the chartering authority, the chartering authority may charge an additional fee not to exceed 2 percent of the revenue of the charter school.
(d)(e)This section does not prevent the charter school from separately purchasing administrative or other services from the chartering authority or any other source.
(e)(f)For purposes of this section, chartering authority means a school district, county board of education, or the state board, that granted the charter to the charter school. school or the governing board of a school district or county board of education that was designated as the chartering authority pursuant to subdivision (b) or (c) of Section 47605.9 or pursuant to paragraph (1) of subdivision (k) of Section 47605.
(f)(g)For purposes of this section, revenue of the charter school means the amount received in the current fiscal year from the local control funding formula calculated pursuant to Section 42238.02, as implemented by Section 42238.03.
(g)(h)For purposes of this section, costs of supervisorial oversight include, but are not limited to, exclude costs incurred pursuant to Section 47607.3.
SEC. 35.Section 47613.3 is added to the Education Code, to read:47613.3.(a)A charter school shall comply with all of the following:
(1)For purposes of providing direct services to pupils, a charter school shall not expend public funds for a contract with a contractor, unless that contractor complies with both of the following requirements:
(A)The materials, programs, and organizations providing services are nonsectarian.
(B)The funds that would be used to pay for direct services to pupils are not used to pay tuition or fees at a private school.
(2)A charter school shall not offer any financial payments or gifts to a teacher, a pupil or prospective pupil, or to the parent or guardian of a pupil or prospective pupil for enrollment, referral, retention, participation in school meetings or activities, or participation in direct services to pupils by contractors.
(3)The salary and other income paid to an employee by a charter school or an entity managing a charter school, as defined by Section 47604.1, shall not depend on pupil attendance or pupil course completion.
(4)Management services, business services, marketing, and technology contract fees, including, but not limited to, an entity managing a charter school, as defined by Section 47604.1, shall not be calculated as a percentage of the revenue of the charter school, as defined in Section 47613.
(b)The extent of the charter schools compliance with subdivision (a) shall be reviewed and reported as part of the annual, independent financial audit that a charter school is required to transmit by December 15 of each year pursuant to Section 41020.
(c)The Controller shall include the items listed in paragraphs (1) to (4), inclusive, of subdivision (a) in the next revision of the audit guide.
(d)This section does not supersede or invalidate a contract that is in effect at the time this section becomes operative. If a contract is in effect at the time this section becomes operative, the contract shall remain in effect until the parties to the agreement negotiate a successor agreement. A memorandum of understanding shall not extend a contract that is in effect at the time this section becomes operative.
(e)This section shall become operative on July 1, 2026.
SEC. 36.Section 47634.2 of the Education Code is amended to read:47634.2.(a)(1)Notwithstanding any other provision of law, beginning July 1, 2026, the amount of funding to be allocated to a charter school on the basis of average daily attendance that is generated by pupils engaged in nonclassroom-based instruction, as defined by paragraph (2) of subdivision (d) (e) of Section 47612.5, including funding provided on the basis of average daily attendance pursuant to Sections 47613.1, 47633, 47634, and 47664, Section 42238.02, as modified by Section 42238.03, shall be adjusted by the State Board of Education. The State Board of Education shall adopt regulations setting forth criteria for the determination of funding for nonclassroom-based instruction, at a minimum the regulation shall specify that the nonclassroom-based instruction is conducted for the instructional benefit of the pupil and substantially dedicated to that function. In developing these criteria and determining the amount of funding to be allocated to a charter school pursuant to this section, the State Board of Education shall consider, among other factors it deems appropriate, the amount of the charter schools total budget expended on certificated employee salaries and benefits and on schoolsites, as defined in paragraph (3) of subdivision (d) of Section 47612.5, and the teacher-to-pupil ratio in the school. Superintendent as follows:
(2)For the 200102 fiscal year only, the amount of funding determined by the State Board of Education pursuant to this section shall not be less than 90 percent of the unadjusted amount to which a charter school would otherwise be entitled on the basis of average daily attendance.(3)For the 2002-03 fiscal year, the amount of funding determined by the State Board of Education pursuant to this section shall not be more than 80 percent of the unadjusted amount to which a charter school would otherwise be entitled, unless the State Board of Education determines that a greater or lesser amount is appropriate based on the criteria specified in paragraph (1) of subdivision (a).(4)For the 200304 fiscal year and each fiscal year thereafter, the amount of funding determined by the State Board of Education pursuant to this section shall not be more than 70 percent of the unadjusted amount to which a charter school would otherwise be entitled, unless the State Board of Education determines that a greater or lesser amount is appropriate based on the criteria specified in paragraph (1) of subdivision (a).(A)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for at least 75 percent of their attendance, no adjustment shall be made to the reported average daily attendance used for funding their nonclassroom-based attendance.
(B)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 60 percent and 74 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 7.5 percent.
(C)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 40 percent and 59 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 15 percent.
(D)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 20 percent and 39 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 22.5 percent.
(E)For pupils engaged in classroom-based instruction, as defined in paragraph (1) of subdivision (e) of Section 47612.5, for between 0 percent and 19 percent of their attendance, the reported average daily attendance used for funding their nonclassroom-based attendance shall be reduced by a factor of 30 percent.
(5)(2)This section does not authorize the board Superintendent to adjust the amount of funding a charter school receives on the basis of average daily attendance generated through classroom-based instruction, as defined for purposes of calculating average daily attendance for classroom-based instruction apportionments by paragraph (1) of subdivision (d) (e) of Section 47612.5.
(b)(1)The State Board of Education shall appoint an advisory committee to recommend criteria to the board in accordance with this section if it has not done so by the effective date of the act adding this section. The advisory committee shall include, but is not limited to, representatives from school district superintendents, charter schools, teachers, parents, members of the governing boards of school districts, county superintendents of schools, and the Superintendent of Public Instruction.(2)If a charter school submits a substantially complete request for a determination for funding by February 13, 2002, and the State Board of Education does not act on that request by March 19, 2002, full funding is automatically granted for the 200102 fiscal year, but the charter school shall reapply for a determination for funding for the 200203 fiscal year.(3)The determination for funding shall be on a percentage basis and the superintendent Superintendent shall implement the determination for funding by reducing the charter schools reported average daily attendance by the determination for funding percentage specified by the State Board of Education. pursuant to this subdivision.
(4)If the State Board of Education denies request for a determination for funding or provides a reduction as authorized by subdivision (a), the board shall, in writing, give the reasons for its denial or reduction and, if appropriate, may describe how any deficiencies or problems may be addressed.(c)(b)Each charter school offering nonclassroom-based instruction shall, in each report provided to the Superintendent of Public Instruction for apportionment purposes, identify the portion of its average daily attendance that is generated through nonclassroom-based instruction instruction, as defined in paragraph (2) of subdivision (d) (e) of Section 47612.5. 47612.5, based on the percentages specified pursuant to subdivision (a).
(d)(c)Notwithstanding any other provision of law, charter schools shall be subject, with regard to subdivisions (c) and (d) of Section 47612.5 and this section, to audits conducted pursuant to Section 41020.
SEC. 37.Section 51745.6 of the Education Code is amended to read:51745.6.(a)(1)The ratio of average daily attendance for independent study pupils 18 years of age or less to school district district, county office of education, or charter school full-time equivalent certificated employees responsible for independent study, calculated as specified by the department, shall not comply with one of the following:
(1)It shall not exceed the equivalent ratio of average daily attendance to full-time equivalent certificated employees providing instruction in other educational programs operated by the school district, county office of education, or charter school, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio.
(2)The ratio of average daily attendance for independent study pupils 18 years of age or less to county office of education full-time equivalent certificated employees responsible for independent study, to be calculated in a manner prescribed by the department, It shall not exceed the equivalent prior year ratio of average daily attendance to full-time equivalent certificated employees for all other educational programs operated by the high school or unified school district with the largest average daily attendance of pupils in that the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year, unless a new higher or lower average daily attendance ratio for all other educational programs offered is negotiated in a collective bargaining agreement or a memorandum of understanding is entered into that indicates an existing collective bargaining agreement contains an alternative average daily attendance ratio. In the case of a charter school serving pupils in more than one county, the ratio shall not exceed the ratio of the high school or unified school district with the average daily attendance of pupils in the county in which the chartering authority is located. The computation of the ratios shall be performed annually by the reporting agency at the time of, and in connection with, the second principal apportionment report to the Superintendent. A high school or unified school district shall annually report the attendance ratios to the county office of education by a date established by the county office of education. The county office of education shall annually report the attendance ratios on their internet website.
(3)It shall be calculated by using a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a school district, county office of education, or charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio. All pupils of the school district, county office of education, or charter school, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.
(b)Only those units of average daily attendance for independent study that reflect a pupil-teacher ratio that does not exceed the ratios described in subdivision (a) shall be eligible for apportionment pursuant to Section 2575, for county offices of education, and Section 42238.05, for school districts. This section does not prevent a school district or county office of education from serving additional units of average daily attendance greater than the ratios described in subdivision (a), except that those additional units shall not be funded pursuant to Section 2575 or 42238.05, as applicable. If a school district, charter school, or county office of education has a memorandum of understanding to provide instruction in coordination with the school district, charter school, or county office of education at which a pupil is enrolled, the ratios that shall apply for purposes of this paragraph are the ratios for the local educational agency providing the independent study program to the pupil pursuant to Section 51749.5.
(c)The calculations performed for purposes of this section shall not include either of the following:
(1)The average daily attendance generated by special education pupils enrolled in special day classes on a full-time basis, or the teachers of those classes.
(2)The average daily attendance or teachers in necessary small schools that are eligible to receive funding pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of Part 24 of Division 3.
(d)The applicable average-daily-attendance-to-certificated-employee ratios described in subdivision (a) may, in a charter school, be calculated by using a fixed average-daily-attendance-to-certificated-employee ratio of 25 to 1, or by using a ratio of less than 25 pupils per certificated employee. A new higher or lower ratio for all other educational programs offered by a charter school may be negotiated in a collective bargaining agreement, or a memorandum of understanding indicating that an existing collective bargaining agreement contains an alternative average daily attendance ratio may be entered into by a charter school. All charter school pupils, regardless of age, shall be included in the applicable average-daily-attendance-to-certificated-employee ratio calculations.(e)(d)Commencing with the 202122 fiscal year Guide for Annual Audits of K12 Local Education Agencies and State Compliance Reporting, the Controller shall incorporate verification of the ratios included in this section, including fiscal penalties for noncompliance as described in this section.
SEC. 38.Section 51746 of the Education Code is amended to read:51746.It is the intent of the Legislature that school districts and county offices of education local educational agencies offering independent study shall provide appropriate existing services and resources to enable pupils to complete their independent study successfully and shall ensure the same access to all existing services and resources in the school in which the pupil is enrolled pursuant to Section 51748 as is available to all other pupils in the school. In addition, the services and resources may include, but need not be limited to, any of the following:
(a)A designated learning center or study area staffed by appropriately trained personnel.
(b)The services of qualified personnel to assess the achievement, abilities, interests, aptitudes, and needs of participating pupils to determine each of the following:
(1)Whether full-time independent study is the most appropriate placement for the pupil being referred.
(2)If the answer to paragraph (1) is affirmative, the determination of the most appropriate individualized plan and resources to be made available to pupils enrolled in full-time independent study.
SEC. 39.Section 51748 of the Education Code is amended to read:51748.School districts districts, charter schools, and county offices of education shall not be eligible to receive apportionment for independent study attendance by any pupil who is not otherwise identified in the written records of the district school district, charter school, or county board of education by grade level, program placement, and the school in which he or she is the pupil is enrolled.
SEC. 40.Section 51749.7 is added to the Education Code, immediately following Section 51749.6, to read:51749.7.(a)A local educational agency shall not allocate, or advertise the availability of, funds or credits to be spent at the discretion of a pupils parent, guardian, or education rights holder for educational enrichment activities that are not provided by a credentialed employee of the local educational agency for the pupil and that are paid for by the local educational agency.
(b)It is the intent of the Legislature that this section does not apply to expanded learning opportunities programs.
SEC. 41.Section 60119 of the Education Code is amended to read:60119.(a)In order to be eligible to receive funds available for purposes of this article, the governing board of a school district or the governing body of a charter school shall take the following actions:
(1)(A)The governing board of a school district or the governing body of a charter school shall hold a public hearing or hearings at which the governing board or body shall encourage participation by parents, teachers, members of the community interested in the affairs of the school district, district or charter school, and bargaining unit leaders, and shall make a determination, through a resolution, as to whether each pupil in each school in the school district or charter school has sufficient textbooks or instructional materials, or both, that are aligned to the content standards adopted by the state board in each of the following subjects, as appropriate, that are consistent with the content and cycles of the curriculum framework adopted by the state board:
(i)Mathematics.
(ii)Science.
(iii)History-social science.
(iv)English language arts, including the English language development component of an adopted program.
(B)The public hearing shall take place on or before the end of the eighth week from the first day pupils attend school for that year. A school district or charter school that operates schools on a multitrack, year-round calendar shall hold the hearing on or before the end of the eighth week from the first day pupils attend school for that year on any tracks that begin a school year in August or September.
(C)As part of the hearing required pursuant to this section, the governing board of a school district or the governing body of a charter school also shall make a written determination as to whether each pupil enrolled in a world language or health course has sufficient textbooks or instructional materials that are consistent with the content and cycles of the curriculum frameworks adopted by the state board for those subjects. The governing board of a school district or the governing body of a charter school also shall determine the availability of laboratory science equipment as applicable to science laboratory courses offered in grades 9 to 12, inclusive. The provision of the textbooks, instructional materials, or science equipment specified in this subparagraph is not a condition of receipt of funds provided by this subdivision.
(2)(A)If the governing board of a school district or the governing body of a charter school determines that there are insufficient textbooks or instructional materials, or both, the governing board or body shall provide information to classroom teachers and to the public setting forth, in the resolution, for each school in which an insufficiency exists, the percentage of pupils who lack sufficient standards-aligned textbooks or instructional materials in each subject area and the reasons that each pupil does not have sufficient textbooks or instructional materials, or both, and take any action, except an action that would require reimbursement by the Commission on State Mandates, to ensure that each pupil has sufficient textbooks or instructional materials, or both, within two months of the beginning of the school year in which the determination is made. The governing board or body shall submit a copy of the resolution to the county superintendent of schools no later than three business days after the governing board or body hearing.
(B)In carrying out subparagraph (A), the governing board of a school district or the governing body of a charter school may use moneys in any of the following funds:
(i)Any funds available for textbooks or instructional materials, or both, from categorical programs, including any funds allocated to school districts or charter schools that have been appropriated in the annual Budget Act.
(ii)Any funds of the school district or charter school that are in excess of the amount available for each pupil during the prior fiscal year to purchase textbooks or instructional materials, or both.
(iii)Any other funds available to the school district or charter school for textbooks or instructional materials, or both.
(b)The governing board of a school district or the governing body of a charter school shall provide 10 days notice of the public hearing or hearings set forth in subdivision (a). The notice shall contain the time, place, and purpose of the hearing and shall be posted in three public places in the school district. district or charter school. The hearing shall be held at a time that will encourage the attendance of teachers and parents and guardians of pupils who attend the schools in the school district or charter school and shall not take place during or immediately following school hours.
(c)(1)For purposes of this section, sufficient textbooks or instructional materials means that each pupil, including English learners, has a standards-aligned textbook or instructional materials, or both, to use in class and to take home. This paragraph does not require two sets of textbooks or instructional materials for each pupil. The materials may be in a digital format as long as each pupil, at a minimum, has and can access the same materials in the class and to take home, as all other pupils in the same class or course in the school district or charter school and has the ability to use and access them at home.
(2)Sufficient textbooks or instructional materials as defined in paragraph (1) do not include photocopied sheets from only a portion of a textbook or instructional materials copied to address a shortage.
(d)The governing board of a school district or the governing body of a charter school that receives funds for instructional materials from any state source is subject to the requirements of this section.
(e)For the purpose of transitioning to instructional materials that are aligned with the common core academic content standards and science content standards, it is the intent of the Legislature that textbooks, instructional materials, and supplemental instructional materials be deemed to be aligned with the content standards pursuant to subdivisions (a) and (c), and be deemed consistent with the content and cycles of the curriculum framework adopted by the state board pursuant to subdivision (a) if the textbooks, instructional materials, supplemental instructional materials, or a combination of any such materials are aligned to the content standards adopted pursuant to Section 60605 or 60605.8, or former Section 60605.85, as that section read on June 30, 2014.
SEC. 42.Section 20110 of the Public Contract Code is amended to read:20110.(a)The provisions of this part shall apply to contracts awarded by school districts subject to Part 21 (commencing with Section 35000) of Division 3 of Title 2 of the Education Code.
(b)(1)This article shall also apply to contracts awarded by a charter school established pursuant to Part 26.8 (commencing with Section 47600) of Division 4 of Title 2 of the Education Code.
(2)For purposes of this article, a charter school shall be deemed a school district and the governing body of a charter school shall be deemed the governing board of a school district, and a reference to a school district or the governing board of a school district shall be deemed to also reference a charter school or the governing body of a charter school, as applicable.
SEC. 43.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
(a)(1)It is the intent of the Legislature to encourage sound fiscal management practices among local educational agencies for the most efficient and effective use of public funds for the education of children in California by strengthening fiscal accountability at the school district, county, and state levels.
(2)(A)It is the intent of the Legislature that all charter schools be audited, including charter schools that are component entities of school districts, county offices of education, or private organizations and encompassed in the audit of the chartering authority.
(B)It is the further intent of the Legislature that comprehensive statutory changes be made to implement the recommendations made in February 2024 by the Legislative Analysts Office and the County Office Fiscal Crisis and Management Assistance Team related to their review of the funding determination process for nonclassroom-based charter schools and to implement the recommendations made in September 2024 by the Controllers Multi-Agency Charter School Audits Task Force on audit best practices for detecting and curtailing charter school fraud.
(b)(1)Not later than the first day of May of each fiscal year, each county superintendent of schools shall provide for an audit of all funds under their jurisdiction and control and the governing board of each local educational agency shall either provide for an audit of the books and accounts of the local educational agency, including an audit of income and expenditures by source of funds, or make arrangements with the county superintendent of schools having jurisdiction over the local educational agency to provide for that auditing.
(2)A contract to perform the audit of a local educational agency that has a disapproved budget or has received a negative certification on any budget or interim financial report during the current fiscal year or either of the two preceding fiscal years, or for which the county superintendent of schools has otherwise determined that a lack of going concern exists, is not valid unless approved by the responsible county superintendent of schools and the governing board of the local educational agency.
(3)If the governing board of a local educational agency has not provided for an audit of the books and accounts of the local educational agency by April 1, the county superintendent of schools having jurisdiction over the local educational agency shall provide for the audit of the local educational agency.
(4)An audit conducted pursuant to this section shall comply fully with the Government Auditing Standards issued by the Comptroller General of the United States.
(5)For purposes of this section, local educational agency does not include community colleges.
(c)Each audit conducted in accordance with this section shall include all funds of the local educational agency, including the student body and cafeteria funds and accounts and any other funds under the control or jurisdiction of the local educational agency. Each audit shall also include an audit of pupil attendance procedures. Each audit shall include a determination of whether funds were expended pursuant to a local control and accountability plan or an approved annual update to a local control and accountability plan pursuant to Article 4.5 (commencing with Section 52059.5) of Chapter 6.1 of Part 28 of Division 4.
(d)All audit reports for each fiscal year shall be developed and reported using a format established by the Controller after consultation with the Superintendent and the Director of Finance.
(e)(1)The cost of the audits provided for by the county superintendent of schools shall be paid from the county school service fund and the county superintendent of schools shall transfer the pro rata share of the cost chargeable to each school district from school district funds.
(2)The cost of the audit provided for by a governing board of a local educational agency shall be paid from local educational agency funds. The audit of the funds under the jurisdiction and control of the county superintendent of schools shall be paid from the county school service fund.
(f)(1)The audits shall be made by a certified public accountant or a public accountant, licensed by the California Board of Accountancy, and selected by the local educational agency, as applicable, from a directory of certified public accountants and public accountants deemed by the Controller as qualified to conduct audits of local educational agencies, which shall be published by the Controller not later than December 31 of each year.
(2)Commencing with the 200304 fiscal year and except as provided in subdivision (d) of Section 41320.1, it is unlawful for a public accounting firm to provide audit services to a local educational agency if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that local educational agency in each of the six previous fiscal years. The Education Audits Appeal Audit Appeals Panel may waive this requirement if the panel finds that no otherwise eligible auditor is available to perform the audit.
(3)It is the intent of the Legislature that, notwithstanding paragraph (2), the rotation within public accounting firms conform to provisions of the federal Sarbanes-Oxley Act of 2002 (Public Law 107-204; 15 U.S.C. Sec. 7201 et seq.), and upon release of the report required by the act of the Comptroller General of the United States addressing the mandatory rotation of registered public accounting firms, the Legislature intends to reconsider paragraph (2). In determining which certified public accountants and public accountants shall be included in the directory, the Controller shall use the following criteria:
(A)The certified public accountants or public accountants shall be in good standing as certified by the Board of Accountancy.
(B)The certified public accountants or public accountants, as a result of a quality control review conducted by the Controller pursuant to Section 14504.2, shall not have been found to have conducted an audit in a manner constituting noncompliance with subdivision (a) of Section 14503.
(g)(1)The auditors report shall include each of the following:
(A)A statement that the audit was conducted pursuant to standards and procedures developed in accordance with Chapter 3 (commencing with Section 14500) of Part 9 of Division 1 of Title 1.
(B)A summary of audit exceptions and management improvement recommendations.
(C)An evaluation by the auditor on whether there is substantial doubt about the ability of the local educational agency to continue as a going concern for a reasonable period of time. This evaluation shall be based on the Statement on Auditing Standards No. 59, as issued by the American Institute of Certified Public Accountants regarding disclosure requirements relating to the ability of the entity to continue as a going concern.
(2)To the extent possible, a description of correction or plan of correction shall be incorporated in the audit report, describing the specific actions that are planned to be taken, or that have been taken, to correct the problem identified by the auditor. The descriptions of specific actions to be taken or that have been taken shall not solely consist of general comments such as will implement, accepted the recommendation, or will discuss at a later date.
(h)(1)Not later than December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with the county superintendent of schools of the county in which the local educational agency is located, the department, and the Controller. The Superintendent shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by those audit reports.
(2)The audit report referenced in paragraph (1) for the 202021 fiscal year shall instead be filed no later than January 31, 2022.
(3)The extension for the audit report referenced in subdivision (m) of Sections 47605 and 47605.6 for the 202021 fiscal year shall instead be filed no later than January 31, 2022.
(i)(1)Commencing with the 200203 audit of local educational agencies pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a local educational agency under their jurisdiction related to attendance, inventory of equipment, internal control, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed.
(2)Commencing with the 200405 audit of local educational agencies pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall include in the review of audit exceptions performed pursuant to this subdivision those audit exceptions related to use of instructional materials program funds, teacher misassignments pursuant to Section 44258.9, and information reported on the school accountability report card required pursuant to Section 33126, and shall determine whether the exceptions are either corrected or an acceptable plan of correction has been developed.
(j)Upon submission of the final audit report to the governing board of each local educational agency and subsequent receipt of the audit by the county superintendent of schools having jurisdiction over the local educational agency, the county office of education shall do all of the following:
(1)Review audit exceptions related to attendance, inventory of equipment, internal control, and other miscellaneous exceptions. Attendance exceptions or issues shall include, but not be limited to, those related to local control funding formula allocations pursuant to Section 42238.02, as implemented by Section 42238.03, and independent study.
(2)(A)If a description of the correction or plan of correction has not been provided as part of the audit required by this section, the county superintendent of schools shall notify the local educational agency and request the governing board of the local educational agency to provide to the county superintendent of schools a description of the corrections or plan of correction by March 15.
(B)In audit reports for the 202021 fiscal year, the description of the corrections or plan of correction referenced in subparagraph (A) shall instead be filed no later than April 15, 2022.
(3)Review the description of correction or plan of correction and determine its adequacy. If the description of the correction or plan of correction is not adequate, the county superintendent of schools shall require the local educational agency to resubmit that portion of its response that is inadequate.
(k)(1)Each county superintendent of schools shall certify to the Superintendent and the Controller, not later than May 15, that the county superintendent of schools staff has reviewed all audits of local educational agencies under the county superintendent of schools jurisdiction for the prior fiscal year, that all exceptions that the county superintendent was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the local educational agency or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent shall identify, by local educational agency, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent.
(2)For audit reports for the 202021 fiscal year, the deadline for certification referenced in paragraph (1) shall instead be filed no later than June 15, 2022.
(l)In the audit of a local educational agency for a subsequent year, the auditor shall review the correction or plan or plans of correction submitted by the local educational agency to determine if the exceptions have been resolved. If an exception has not been resolved, the auditor shall immediately notify the appropriate county office of education and the department and restate the exception in the audit report. After receiving that notification, the department shall either consult with the local educational agency to resolve the exception or require the county superintendent of schools to follow up with the local educational agency.
(m)(1)The Superintendent is responsible for ensuring that local educational agencies have either corrected or developed plans of correction for any one or more of the following:
(A)All federal and state compliance audit exceptions identified in the audit.
(B)Exceptions that the county superintendent of schools certifies as of May 15 have not been corrected.
(C)Repeat audit exceptions that are not assigned to a county superintendent of schools to correct.
(2)In addition, the Superintendent is responsible for ensuring that county superintendents of schools and each county board of education that serves as the governing board of a local educational agency either correct all audit exceptions identified in the audits of county superintendents of schools and of the local educational agencies for which the county boards of education serve as the governing boards or develop acceptable plans of correction for those exceptions.
(3)The Superintendent shall report annually to the Controller on the Superintendents actions to ensure that school districts, county superintendents of schools, and each county board of education that serves as the governing board of a school district have either corrected or developed plans of correction for any of the exceptions noted pursuant to paragraph (1).
(n)To facilitate correction of the exceptions identified by the audits issued pursuant to this section, the Controller shall require auditors to categorize audit exceptions in each audit report in a manner that will make it clear to both the county superintendent of schools and the Superintendent which exceptions they are responsible for ensuring the correction of by a local educational agency. In addition, the Controller annually shall select a sampling of county superintendents of schools, perform a followup of the audit resolution process of those county superintendents of schools, and report the results of that followup to the Superintendent and the county superintendents of schools that were reviewed.
(o)County superintendents of schools shall adjust subsequent local property tax requirements to correct audit exceptions relating to local educational agency tax rates and tax revenues.
(p)If a governing board or county superintendent of schools fails or is unable to make satisfactory arrangements for the audit pursuant to this section, the Controller shall make arrangements for the audit and the cost of the audit shall be paid from local educational agency funds or the county school service fund, as the case may be.
(q)Audits of regional occupational centers and programs are subject to this section.
(r)This section does not authorize examination of, or reports on, the curriculum used or provided for in any local educational agency.
(s)Notwithstanding any other law, a nonauditing, management, or other consulting service to be provided to a local educational agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section shall be in accord with Government Accounting Standards, Amendment No. 3, as published by the United States General Accounting Office.
SEC. 2.Section 46306 is added to the Education Code, to read:46306.(a)The department, in consultation with the County Office Fiscal Crisis and Management Assistance Team, shall provide a report to the Legislature detailing the business and alternatives analysis of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and the average daily attendance apportionment data system for purposes of monitoring statewide average daily attendance by unique pupil identifier.
(b)The report shall include, but not be limited to, all of the following:
(1)A procurement and cost analysis to integrate CALPADS and the average daily attendance apportionment data system.
(2)The necessary timeline to complete an integration of CALPADS and the average daily attendance apportionment data system.
(3)The logistical and state- and end-user requirements for integrating CALPADS and the average daily attendance apportionment data system.
(4)A recommendation regarding the most efficient state department or entity to house an integrated CALPADS and the average daily attendance apportionment data system.
(5)A recommendation for a reasonable frequency for local educational agencies to report attendance information to the state.
(c)The report with recommendations shall be completed by January 1, 2030, and be presented to the appropriate policy and fiscal committees of the Legislature in compliance with Section 9795 of the Government Code.
(d)Pursuant to Section 10231.5 of the Government Code, this section shall remain in effect only until January 1, 2031, and as of that date is repealed.
|
Date
|
Status
|
|---|---|
| Sep 12, 2025 | Ordered to inactive file at the request of Senator Grayson. |
| Sep 10, 2025 | Read second time. Ordered to third reading. |
| Sep 9, 2025 | Read third time and amended. Ordered to second reading. |
| Sep 9, 2025 | Joint Rule 61(a)(13) suspended. (Ayes 28. Noes 8. Page 2752.) |
| Sep 2, 2025 | Read second time. Ordered to third reading. |
| Aug 29, 2025 | Read second time and amended. Ordered returned to second reading. |
| Aug 29, 2025 | From committee: Amend, and do pass as amended. (Ayes 4. Noes 2.) (August 29). |
| Aug 18, 2025 | In committee: Referred to suspense file. |
| Jul 17, 2025 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 17, 2025 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 4. Noes 2.) (July 16). |
| Jul 8, 2025 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on ED. |
| Jun 18, 2025 | Referred to Com. on ED. |
| Jun 9, 2025 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Jun 5, 2025 | Read third time. Passed. Ordered to the Senate. (Ayes 43. Noes 25. Page 2108.) |
| Jun 3, 2025 | Read third time and amended. Ordered to third reading. (Page 2041.) |
| Jun 2, 2025 | Read third time and amended. Ordered to third reading. (Page 1951.) |
| May 27, 2025 | Read second time. Ordered to third reading. |
| May 23, 2025 | From committee: Do pass. (Ayes 10. Noes 3.) (May 23). |
| May 14, 2025 | In committee: Set, first hearing. Referred to suspense file. |
| May 6, 2025 | Re-referred to Com. on APPR. |
| May 5, 2025 | Read second time and amended. |
| May 1, 2025 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 7. Noes 2.) (April 30). |
| Mar 24, 2025 | In committee: Hearing postponed by committee. |
| Mar 20, 2025 | Re-referred to Com. on ED. |
| Mar 19, 2025 | From committee chair, with author's amendments: Amend, and re-refer to Com. on ED. Read second time and amended. |
| Feb 3, 2025 | Referred to Com. on ED. |
| Jan 6, 2025 | Read first time. |
| Dec 21, 2024 | From printer. May be heard in committee January 20. |
| Dec 20, 2024 | Introduced. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 29, 2025 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| Aug 18, 2025 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Jul 16, 2025 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Education |
Passed |
|
| Jun 5, 2025 | AB 84 Muratsuchi Assembly Third Reading | Assembly Floor |
Passed |
|
| May 23, 2025 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 30, 2025 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Education |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 21St Century Alliance | ** Against | |
| Achieve Charter School | ** Against | |
| Advocates for Faith & Freedom | ** Against | |
| Alder Grove Charter School | ** Against | |
| Allegiance Steam Academy | ** Against | |
| Alliance College-Ready Public Schools | ** Against | |
| Alliance of Independent Learners | ** Against | |
| Alma Fuerte Public School | ** Against | |
| Alpha Public Schools | ** Against | |
| Alta Public Schools | ** Against | |
| Altus Schools | ** Against | |
| America's Finest Charter School | ** Against | |
| American Federation of State, County and Municipal Employees | ** Support | |
| American Heritage Charter Schools | ** Against | |
| Antelope Valley Economic Development & Growth Enterprise | ** Against | |
| Antioch Charter Academy | ** Against | |
| Antioch Charter Academy II | ** Against | |
| Ararat Charter School | ** Against | |
| Arts in Action Community Charter Schools | ** Against | |
| Asa Charter School | ** Against | |
| Aspen Public Schools | ** Against | |
| Aspire Public Schools | ** Against | |
| Association of Personalized Learning Schools & Services | ** Against | |
| Autism Society Inland Empire | ** Against | |
| Aveson Schools | ** Against | |
| Big Picture Educational Academy | ** Against | |
| Big Sur Charter School | ** Against | |
| Birmingham Community Charter High School | ** Against | |
| Bridges Charter School | ** Against | |
| Bridges Preparatory Academy | ** Against | |
| Brookfield Engineering Science Technology | ** Against | |
| Butte County Office Of Education | ** Against | |
| Cabrillo Point Academy | ** Against | |
| California Association Of School Business Officials | ** Against | |
| California Baptist for Biblical Values | ** Against | |
| California Catholic Conference | ** Against | |
| California Charter Schools Association | ** Against | |
| California County Superintendents | ** Against | |
| California Creative Learning Academy | ** Against | |
| California Democratic Party | ** Support | |
| California Federation of Labor Unions | ** Support | |
| California Homeschool Network | ** Against | |
| California Montessori Project | ** Against | |
| California Online Public School | ** Against | |
| California Pacific Charter Schools | ** Against | |
| California Parents for Public Virtual Education | ** Against | |
| California Policy Center | ** Against | |
| California Republic Leadership Academy | ** Against | |
| California School Employees Association | ** Support | |
| California Teachers Association | ** Support | |
| California Virtual Academies | ** Against | |
| Camarillo Academy of Progressive Education | ** Against | |
| Camino Nuevo Charter Academy | ** Against | |
| Catalyst Legacy | ** Against | |
| CFT- a Union of Educators & Classified Professionals | ** Support | |
| Champs Charter High School of the Arts | ** Against | |
| Charter Schools Development Center | ** Against | |
| Children’s Community Charter School | ** Against | |
| Chime Institute | ** Against | |
| Choices Charter School | ** Against | |
| City Of Huntington Beach | ** Against | |
| City of Porterville | ** Against | |
| Clarksville Charter School | ** Against | |
| Coastal Grove Charter School | ** Against | |
| College Prep Genius | ** Against | |
| Community Learning Center Schools | ** Against | |
| Consumer Federation Of California | ** Support | |
| CORE a Community Collaboration | ** Against | |
| Core Butte Charter School | ** Against | |
| CORE Charter School | ** Against | |
| County of Sonoma | ** Against | |
| Creative Cultivation Studio | ** Against | |
| Creative Learners of California | ** Against | |
| Creative Learning Place | ** Against | |
| Crossroads Charter Academy | ** Against | |
| CWC Los Angeles | ** Against | |
| Da Vinci Schools | ** Against | |
| Decentralize America | ** Against | |
| Delta Managed Solutions | ** Against | |
| Democrats of Rossmoor | ** Support | |
| Desert Trails Preparatory Academy | ** Against | |
| Discovery Charter Schools | ** Against | |
| Dixon Montessori Charter School | ** Against | |
| Dr. Lewis Dolphin Stallworth Charter School | ** Against | |
| Dual Language Immersion North County | ** Against | |
| Edison Bethune Charter Academy | ** Against | |
| Ednovate | ** Against | |
| Education for Change Public Schools | ** Against | |
| Eel River Charter School | ** Against | |
| El Sol Science and Arts Academy | ** Against | |
| Element Education | ** Against | |
| Elevate School | ** Against | |
| Environmental Charter Schools | ** Against | |
| Epic Charter School | ** Against | |
| Equitas Academy Charter Schools | ** Against | |
| Excel Academy Charter School | ** Against | |
| Extera Public Schools | ** Against | |
| Family Partnership Charter School | ** Against | |
| Feaster Charter School | ** Against | |
| Feaster (Mae L.) Charter School | ** Against | |
| Feather River Charter School | ** Against | |
| Fenton Charter Public Schools | ** Against | |
| Foothill Learning Academy | ** Against | |
| Forest Charter School | ** Against | |
| Forest Ranch Charter | ** Against | |
| Freedom Angels | ** Against | |
| Fresno Innovative Charter Schools | ** Against | |
| Gabriella Charter Schools | ** Against | |
| Gateway College and Career Academy | ** Against | |
| Gateway Community Charters | ** Against | |
| Girls Athletic Leadership School Los Angeles | ** Against | |
| Glacier High School Charter | ** Against | |
| Golden Eagle Charter School | ** Against | |
| Golden Valley Charter School | ** Against | |
| Gorman Learning Charter Network | ** Against | |
| Granada Hills Charter | ** Against | |
| Granite Mountain Charter School | ** Against | |
| Great Valley Academy | ** Against | |
| Green Dot Public Schools | ** Against | |
| Griffin Technology Academies | ** Against | |
| Growth Public Schools | ** Against | |
| Guajome Schools | ** Against | |
| Hawking Steam Charter School | ** Against | |
| Heartwood Charter School | ** Against | |
| Hemet Christian Homeschool Moms | ** Against | |
| High Tech Los Angeles | ** Against | |
| History Rocks! | ** Against | |
| Home Haven Collective | ** Against | |
| Hometech Charter School | ** Against | |
| Howard Gardner Community School | ** Against | |
| ICEF Public Schools | ** Against | |
| iLead | ** Against | |
| iLEAD CA Charters 1 | ** Against | |
| iLEAD California | ** Against | |
| Ingenium Schools | ** Against | |
| Innovations Academy | ** Against | |
| Innovative Education Management | ** Against | |
| Inspire School of Arts and Sciences | ** Against | |
| Intellectual Virtues Academy High | ** Against | |
| Invictus Leadership Academy | ** Against | |
| Irvine International Academy | ** Against | |
| Ivy Academia | ** Against | |
| JCS Family of Charter Schools | ** Against | |
| John Muir Charter Schools | ** Against | |
| Journey School | ** Against | |
| Kairos Public Schools | ** Against | |
| Kavod Charter School | ** Against | |
| Kepler Neighborhood School | ** Against | |
| Kid Street Charter School | ** Against | |
| Kidinnu Academy | ** Against | |
| Kipp Public Schools Northern California | ** Against | |
| La Jolla Band of Luiseno Indians | ** Against | |
| Larchmont Charter School | ** Against | |
| Lashon Academy | ** Against | |
| learn4life | ** Against | |
| Learning for Life Charter School | ** Against | |
| Legislation Take Action | ** Against | |
| Leonardo Da Vinci Health Sciences Charter School | ** Against | |
| Lighthouse Baptist Church | ** Against | |
| Literacy First Charter Schools | ** Against | |
| Little Explorers Homeschool Co-Op | ** Against | |
| Live Online Math | ** Against | |
| Los Angeles Academy of Arts and Enterprise | ** Against | |
| Los Angeles County Democratic Party | ** Support | |
| Magnolia Public Schools | ** Against | |
| Maria Montessori Charter Academy | ** Against | |
| Matrix for Success Academy | ** Against | |
| Mayacamas Countywide Middle School | ** Against | |
| Meadows Arts and Technology Elementary School | ** Against | |
| Megapixels School of the Arts | ** Against | |
| Method Schools | ** Against | |
| Mission Vista Academy | ** Against | |
| Montague Charter Academy | ** Against | |
| Motivated Youth Academy | ** Against | |
| Mountain Home School Charter | ** Against | |
| Multicultural Learning Center | ** Against | |
| Museum School Collaborative | ** Against | |
| Natomas Charter School | ** Against | |
| Natomas Homeschool Alliance | ** Against | |
| Natomas USD for Freedom | ** Against | |
| Navigator Schools | ** Against | |
| New Heights Charter School | ** Against | |
| New West Charter | ** Against | |
| Nord Country School | ** Against | |
| Northern United Charter Schools | ** Against | |
| Northwest Prep Charter School | ** Against | |
| NOVA Academy Early College High School | ** Against | |
| Ocean Charter School | ** Against | |
| Odyssey Charter School | ** Against | |
| Olive Grove Charter School | ** Against | |
| Orange County Academy Of Sciences And Arts | ** Against | |
| Orange County Board Of Education | ** Against | |
| Orange County School of the Arts / California School of the Arts Foundation | ** Against | |
| Pacific Charter Institute | ** Against | |
| pacific justice institute - center for public policy | ** Against | |
| Pacific View Charter School | ** Against | |
| Pacoima Charter School | ** Against | |
| Para Los Ninos | ** Against | |
| Pasadena Rosebud Academy Charter School | ** Against | |
| Pauma Band of Luiseno Indians | ** Against | |
| Pazlo Education Foundation | ** Against | |
| PCA College View | ** Against | |
| Peabody Charter School | ** Against | |
| Peninsula Parents for Personalized Education | ** Against | |
| Plumas Charter School | ** Against | |
| Port of Los Angeles High School | ** Against | |
| Pseudogenius Learning Labs | ** Against | |
| Public Advocates | ** Support | |
| Puente Learning Center | ** Against | |
| Real Impact. | ** Against | |
| Redding School District | ** Against | |
| Redwood Coast Montessori | ** Against | |
| Redwood Collegiate Academy | ** Against | |
| Renaissance Art Academy | ** Against | |
| Revillage Napa Homeschoolers | ** Against | |
| REX AND MARGARET FORTUNE SCHOOL OF EDUCATION | ** Against | |
| Rincon Band Of Luiseno Indians | ** Against | |
| River Montessori Charter School | ** Against | |
| River Oaks Academy Charter School | ** Against | |
| River Springs Charter School | ** Against | |
| Rocklin Academy Family of Schools | ** Against | |
| Sage Oak Charter Schools | ** Against | |
| San Carlos Charter | ** Against | |
| San Diego Virtual School | ** Against | |
| San Jose Conservation Corps & Charter School | ** Against | |
| Santa Rosa Academy Parents | ** Against | |
| Santa Rosa French-American Charter School | ** Against | |
| Save Glendora Schools | ** Against | |
| Save Our Schools Coalition | ** Against | |
| Scale Leadership Academy | ** Against | |
| Scholarship Prep Charter School | ** Against | |
| Sebastopol Independent Charter | ** Against | |
| Sequoia Career Academy | ** Against | |
| Shade Canyon School | ** Against | |
| Shasta Charter Academy | ** Against | |
| Shasta View Academy | ** Against | |
| Sherman Thomas Charter School | ** Against | |
| Sherwood Montessori | ** Against | |
| Small School Districts Association | ** Against | |
| Soar Charter Academy | ** Against | |
| Southwest California Legislative Council | ** Against | |
| Sparrow Academy | ** Against | |
| Stand Up California | ** Against | |
| Stand Up Sacramento County | ** Against | |
| Stellar Charter School | ** Against | |
| Stem Prep Schools | ** Against | |
| Stride | ** Against | |
| Success One! Charter | ** Against | |
| Summit Enrichment Academy | ** Against | |
| Summit Public Schools | ** Against | |
| Suncoast Charter | ** Against | |
| Suncoast Prep Academy | ** Against | |
| Supporting True Options in Public Education Coalition | ** Against | |
| Sycamore Creek Community Charter School | ** Against | |
| Synergy Academies | ** Against | |
| Taylion High Desert Academy | ** Against | |
| Teach Public Schools | ** Against | |
| Tehama eLearning Academy | ** Against | |
| Temecula Valley Charter School | ** Against | |
| The Classical Academies | ** Against | |
| The Cottonwood School | ** Against | |
| The Foundation for Hispanic Education | ** Against | |
| The Grove School | ** Against | |
| The Language Academy of Sacramento | ** Against | |
| The Learning Choice Academy | ** Against | |
| The O’Farrell Charter Schools | ** Against | |
| The Preuss School UCSD | ** Against | |
| Tierra Pacifica Charter | ** Against | |
| Tree Of Life Charter School | ** Against | |
| Trillium Charter School | ** Against | |
| Union Street Charter | ** Against | |
| Urban Charter Schools Collective | ** Against | |
| Valley Charter School | ** Against | |
| VALLEY INDUSTRY AND COMMERCE ASSOCIATION | ** Against | |
| Valley International Preparatory High School | ** Against | |
| Valley Life Charter Schools | ** Against | |
| Valley View Charter Prep | ** Against | |
| Various individuals. | ** Against | |
| Ventura Charter School of Arts and Global Education | ** Against | |
| Vibrant Minds Charter School | ** Against | |
| Virtual Learning Academy, Sage Oak Charter Schools | ** Against | |
| Vista Charter Public Schools | ** Against | |
| Vista Oaks Charter School | ** Against | |
| Voices College-Bound Language Academies | ** Against | |
| Vox Collegiate | ** Against | |
| We Spark Learning | ** Against | |
| Westbrook Academy | ** Against | |
| Western Sierra Charter Schools | ** Against | |
| Westlake Charter School | ** Against | |
| Wildflower Open Classroom | ** Against | |
| William Finch Charter School | ** Against | |
| Write On! | ** Against | |
| Ypi Charter Schools | ** Against | |
| Yuba County Career Preparatory Charter School | ** Against |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 84 |
THIRD READING
Bill No: AB 84
Author: Muratsuchi (D) and Garcia (D), et al.
Amended: 9/9/25 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE: 4-2, 7/16/25
AYES: Pérez, Cortese, Gonzalez, Laird
NOES: Ochoa Bogh, Choi
NO VOTE RECORDED: Cabaldon
SENATE APPROPRIATIONS COMMITTEE: 4-2, 8/29/25
AYES: Caballero, Grayson, Richardson, Wahab
NOES: Seyarto, Dahle
NO VOTE RECORDED: Cabaldon
ASSEMBLY FLOOR: 43-25, 6/5/25 - See last page for vote
SUBJECT: School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, networks, and contracting: data systems: local educational agency contractor background checks and contracting
SOURCE: Author
DIGEST:
This bill makes a series of changes to the oversight and operation of nonclassroom-based (NCB) charter schools. Specifically, it: (1) increases audit requirements and authorizer responsibilities; (2) revises the funding determination process to include additional financial reporting and a review of charter networks; (3) imposes restrictions on certain contracting practices; and (4) places new limits on the ability of small school districts to authorize NCB charter schools that serve student populations larger than their own.
Senate Floor amendments of 9/9/25: (1) expand the annual audit guide to include new schedules on enrollment, funding determinations, contracts, and governance, while adding charter and classified employee advocacy groups to the stakeholder process, (2) allow funding determinations to continue indefinitely if verified annually, (3) require consistency across networks in audits or State Board hearings, (4) restrict certain contracts by banning season passes and attendance incentives, (5) create grant programs for authorizer mentor support, authorizer oversight costs, and charters transitioning to the Standardized Account Code Structure (SACS) accounting system, (6) temporarily bar authorizers under corrective assistance from approving new NCB schools, and (7) direct the Legislative Analyst’s Office (LAO) to study the bill’s new mandates on charters to inform adjustments to the mandate block grant.
ANALYSIS:
Existing law:
Audit & Accounting Standards
- Requires charter schools to submit annual independent financial and compliance audits conducted by certified public accountants.
- Requires that audit reports be submitted to the chartering authority, the county superintendent, the State Controller’s Office (SCO), and the California Department of Education (CDE).
- Requires financial and compliance audits to follow General Accounting Office standards and the audit guide developed by the Education Audits Appeal Panel (EAAP), once adopted.
- Does not require charter schools to use SACS, unlike school districts.
- Authorizes the SCO to conduct quality control reviews of audits, but does not require regular selection of charter school audits for review.
Funding Determination
- Requires charter schools that offer less than 80% of instructional time on school sites to obtain a funding determination from the State Board of Education (SBE) in order to receive apportionment funding.
- Authorizes the SBE to fund NCB instruction at up to 70% of standard funding unless a higher rate is justified.
- Requires the SBE to consider factors such as the charter school’s spending on certificated salaries and benefits, expenditures on schoolsites, and teacher-to-pupil ratios when making a funding determination.
- Does not require charter schools that are part of a network to apply jointly for a funding determination, nor does it require them to submit updated financial documentation between determination years.
School Contractors & Use of Funds
- Grants charter schools greater flexibility than school districts in contracting and generally exempts them from the Public Contract Code (PCC).
- Permits charter school contracts to be structured as a percentage of school revenue and does not prohibit contracts with private or religious organizations.
- Allows charter schools to provide funds or credits to families for educational enrichment activities, even if those activities are not provided by credentialed staff.
- Imposes no statutory restriction on charter school employee compensation based on student attendance or course completion.
Authorizer Oversight & Oversight Fees
- Requires charter authorizers to provide general oversight, including annual site visits, fiscal monitoring, and compliance with required reporting, such as the Local Control and Accountability Plan (LCAP).
- Authorizes authorizers to charge up to 1% of a charter school’s revenue for oversight, or up to 3% if the authorizer provides substantially rent-free facilities.
- Previously supported a Charter School Authorizer Technical Assistance Team at Fiscal Crisis and Management Assistance Team (FCMAT), but that team was defunded in 2020 and no longer operates.
- Results in wide variation in the quality and depth of authorizer oversight, particularly among small school districts with limited capacity.
Student Attendance Data Reform
- Requires California Longitudinal Pupil Achievement Data System (CALPADS) to collect student demographic and achievement data, but this system is not integrated with the state’s attendance-based funding system.
- Requires charter schools to report attendance data separately to CDE, which can allow for duplicative or inflated attendance reporting.
District Authorizers
- Permits any school district, regardless of size or capacity, to authorize charter schools, including NCB charter schools.
- Does not impose a statutory cap on the number of charter school pupils a district may authorize in proportion to its own average daily attendance (ADA).
- Does not authorize or require the reassignment of charter schools to larger or more capable authorizers upon renewal.
Independent Study (IS) & Course-Based Independent Study (CBIS)
- Authorizes local educational agencies (LEAs), including charter schools, to offer IS and CBIS programs under specific requirements related to credentialed supervision, content rigor, and written learning agreements.
- Prohibits pupils with an Individualized Education Plan (IEP) from participating in IS unless their IEP explicitly allows it.
- Imposes a funding penalty for CBIS if more than 10% of an LEA’s total ADA is generated through CBIS, unless the LEA qualifies for an exemption.
NCB Moratorium
- Imposes a moratorium on the authorization of new NCB charter schools until January 1, 2026.
- Allows existing NCB charter schools to seek renewals or material revisions during the moratorium, under specified conditions.
This bill:
Audit and Accounting Standards
- Requires training for LEA auditors.
- Updates the audit compliance procedures and audit guide to include sampling guidance, enrollment and attendance by month, related-party transactions, student–teacher ratios, large transfers, funding determinations, credit card/electronic payments, and charter oversight practices.
- Establishes risk-based quality control reviews by the State Controller.
- Requires schools to correct over-appropriated attendance and post audits on their websites.
- Creates the Office of the Inspector General under the SBE.
- Aligns charter school audit procedures with those of school districts, including use of the SACS, and establishes a grant program to reimburse charter schools for transitional costs.
- Requires the LAO to analyze the new mandates for purposes of adjusting the charter school mandate block grant.
- Requires charter authorizers with audit findings related to charter oversight to receive technical assistance.
Funding Determination
- Authorizes NCB charter schools to retain State Board funding determinations indefinitely if annual audits verify compliance with thresholds.
- Requires schools in an NCB network to either use the same auditor or apply jointly in the same year, with network-wide review of pupil–teacher ratios and spending thresholds.
- Codifies mitigating circumstances, including reserves, one-time funds, and facility expenditures.
School Contractors & Use of Funds
- Prohibits private religious schools from serving as public school contractors.
- Prohibits parents from contracting for services solely for their own child.
- Prohibits schools from purchasing season passes for amusement parks, zoos, or family entertainment venues.
- Prohibits gifts to pupils or prospective pupils.
- Requires contractors to hold a business license and insurance and prohibits them from charging pupil fees.
- Requires charter school contracts over $100,000 to be approved by the governing body.
- Prohibits employee bonuses based on student attendance.
Student Attendance Data Reform
- Requires CDE to study the feasibility of connecting CALPADS with the ADA funding system.
Authorizer Oversight
- Requires authorizers to strengthen oversight in key areas, including audit compliance, credit card/electronic payments, governing board monitoring, site visits, attendance accounting, and student–teacher ratios.
- Establishes a grant program to support authorizers with increased oversight costs.
District Authorizer Capacity
- Caps the authorizing capacity of small districts (<10,000 ADA) to 100% of their own ADA.
- Allows existing NCB charters to remain with a small-district authorizer if the district has at least four executive-level staff.
- Requires the SBE to reassign NCB charters authorized by small districts to a larger district authorizer in the county upon renewal.
Comments
- Need for this bill. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
“One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
“Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
- Background on Charter Schools. Charter schools are public schools that operate under the terms of a charter agreement approved by a school district, county office of education, or the SBE. Established by the Charter Schools Act of 1992, they were intended to increase learning opportunities for all students, especially those who are academically low-achieving, and to promote innovation, site-based decision-making, and performance-based accountability.
Today, charter schools serve over 700,000 students in California. They are publicly funded and tuition-free but operate with greater flexibility in exchange for accountability for results. Charter schools may be operated by nonprofit organizations or, in some cases, by charter management organizations (CMOs) that oversee multiple schools. While most charter schools operate classroom-based programs similar to traditional schools, a significant share operate in a NCB model.
- What Are NCB Charter Schools? A charter school is considered NCB if less than 80% of its instructional time occurs under the immediate supervision of a credentialed teacher in a classroom setting. NCB charter schools may offer instruction through virtual, blended, or home-based learning models. These schools often serve high proportions of students with unique learning needs, such as students who are medically fragile, pursuing athletic or artistic careers, or seeking alternatives to traditional settings.
Because NCB schools are not funded automatically based on attendance like classroom-based schools, they must obtain a funding determination from the SBE. This process is based on an evaluation of audited expenditures and is intended to ensure public funds are being used for instructional purposes. However, the process has been widely criticized for its lack of rigor, real-time accountability, and effectiveness in preventing misuse of funds. The integrity of financial reporting in NCB schools plays a critical role in funding eligibility, and, when abused, can be exploited to inflate apportionments and divert public resources.
- The Moratorium on NCB Charter Schools and Broader 2019 Charter School Reforms. In 2019, the Legislature passed AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) and AB 1507 (Smith, Chapter 487, Statutes of 2019), which significantly restructured charter school law. Among other changes, AB 1505 strengthened the criteria for charter authorization and renewal by:
- Allowing authorizers to consider academic and fiscal impact on the district when reviewing petitions.
- Tying renewal decisions to a school’s performance on the California School Dashboard, streamlining renewal for high performers and requiring greater scrutiny for low performers.
- Expanding credentialing requirements to all charter school teachers and applying conflict-of-interest laws to charter boards.
AB 1507 restricted charter schools from operating sites outside their authorizing district’s boundaries.
Together, these bills also enacted a moratorium on new NCB charter schools through January 1, 2026. The pause was intended to give the state time to re-evaluate oversight, funding, and academic accountability in the NCB sector, following concerns about weak controls and inconsistent performance.
This bill builds on this reformed oversight landscape by proposing additional audit, fiscal, and governance tools specific to charter school accountability.
- The A3 Charter Schools Fraud Case. The most significant charter school fraud case in California’s history, the A3 Education scandal, came to light in 2019. Prosecutors alleged that two individuals created a network of 19 NCB charter schools and enrolled tens of thousands of students, many without their knowledge or participation, to fraudulently claim public funding. The scheme involved:
- Inflated and duplicated enrollment using a manipulated “multi-track” calendar.
- Unauthorized use of public funds through related-party contracts.
- A total fraud estimate of over $400 million in misappropriated state funds.
The case revealed multiple breakdowns in the oversight chain—from charter authorizers to external auditors to state agencies—prompting calls for systemic reform.
- Oversight Reports Prompting Legislative Action. In response to the A3 scandal and other fraud incidents, state and independent agencies released two major reports:
- SCO Charter School Audit Task Force Report (2024): Focused on improving the quality of school audits by increasing auditor training, revising the audit guide, establishing certified public accountant review and rotation policies, and ensuring follow-up on audit findings.
- LAO/FCMAT Joint Report on NCB Charter Schools (2024): Analyzed the NCB funding determination process and recommended major changes to better align funding with instructional delivery. Recommendations included real-time enrollment tracking, clearer definitions of instruction, and changes to charter oversight authority.
- State audit of Highlands underscores need for stronger oversight. A June 2025 report by the State Auditor found that Highlands Community Charter improperly claimed over $180 million in K–12 funding, operated with uncredentialed teachers, and engaged in wasteful spending and conflicts of interest. The audit also faulted Twin Rivers Unified School District and state agencies for lax oversight, despite prior warnings. While not every finding directly maps onto this bill’s provisions, the report highlights systemic weaknesses in oversight, transparency, and governance that this bill seeks to address.
- Balancing accountability with support for student-centered choice. This bill has generated substantial public engagement, especially from families who rely on NCB charter schools for educational flexibility. Many of these messages express concern that increased oversight could restrict school choice or reflect a broader opposition to charter schools. These concerns reflect real experiences and deserve to be taken seriously.
At the same time, this bill emerged in response to longstanding oversight concerns and notable fraud cases—not from an effort to limit educational options. In cases like A3 and Highlands, weaknesses in data systems, fiscal reporting, and oversight structures enabled large-scale misuse of public funds. To address these concerns, state agencies developed recommendations aimed at improving transparency, accountability, and operational safeguards in the NCB space.
This bill is built around those recommendations. Many early provisions have been amended or removed in response to stakeholder concerns. The remaining proposals focus on strengthening financial practices, clarifying oversight roles, and ensuring that public funds are used appropriately.
Support for this bill—or for the concepts it puts forward—does not need to signal a position on the broader debate over charter schools. It may simply reflect a belief that clear accountability standards are essential to preserving the innovation and flexibility that many families value in NCB charter programs.
- Targeted reforms in line with oversight recommendations. This bill reflects a coordinated response to the findings of the 2024 LAO/FCMAT review of the NCB funding determination process and the SCO’s Charter School Audit Task Force. Both reports identified systemic vulnerabilities in the oversight of NCB charter schools, particularly related to fiscal accountability, weak audit standards, and insufficient authorizer capacity. The bill seeks to close these gaps through a range of provisions aimed at standardizing audits, clarifying oversight responsibilities, limiting authorizations by small school districts, and increasing transparency in attendance accounting. Unlike early versions of the bill, these reforms are not intended to reduce funding to charter schools or change the instructional models they may offer. Rather, they are focused on ensuring that public funds are spent appropriately and that oversight mechanisms are robust and equitable.
- Improved audit practices and financial accountability. A major theme of both the LAO/FCMAT report and the SCO’s Charter School Audit Task Force findings was the need to modernize and strengthen charter school audits. The A3 case revealed that NCB charter schools were able to hide fraudulent practices due to insufficient audit procedures, lack of auditor training, and the ability to switch auditors if problems were identified. The bill addresses these concerns by aligning charter school audit procedures with those used for school districts, requiring auditors to receive specialized training, and directing the Education Audit Appeals Panel to revise the audit guide to include new areas of review specific to NCB charter schools, such as teacher-pupil ratios and documentation sampling. These changes are intended to ensure that audits are not only more rigorous but also better able to detect misuse of funds and systemic noncompliance.
- Ensuring authorizer accountability as part of a comprehensive oversight system. The most serious charter school fraud cases in California—A3 and Highlands—were perpetrated by school operators who intentionally misused public funds. However, these cases also revealed weaknesses in the oversight infrastructure that allowed misconduct to persist undetected for years. Charter school authorizers play a critical role in ensuring legal compliance and educational quality, but that role varies considerably depending on the size, capacity, and approach of the authorizing district.
In some instances, authorizers lacked sufficient resources or staff expertise to monitor complex NCB programs, especially those serving students far beyond district boundaries. In others, warning signs were missed or under-addressed, despite red flags in audits or financial reports. This bill does not assign blame to authorizers for every instance of misconduct, but it does reflect a broader consensus that oversight obligations must be taken seriously—and that there should be reasonable consequences when they are not.
To that end, the bill strengthens expectations for authorizer monitoring in key risk areas such as attendance accounting, electronic payments, and student-to-teacher ratios. It also seeks to align authorizing capacity with district size and staff infrastructure. While the bill stops short of imposing direct financial penalties on authorizers, the concept of holding authorizers more accountable—such as through potential reimbursement of oversight fees when duties are neglected—has been raised during policy discussions and may merit future consideration. These reforms are ultimately designed not to penalize oversight agencies, but to ensure that the safeguards intended to protect students and taxpayers function as intended.
- Matching authorizer capacity to oversight responsibility. This bill limits the ability of small school districts to authorize NCB charter schools that serve student populations larger than the district itself. Specifically, districts with fewer than 10,000 ADA may authorize NCB charter schools only up to a combined enrollment equal to 100% of their own ADA. Existing NCB charter schools may remain with their current small district authorizer if that authorizer employs at least four executive-level staff. For NCB charter schools that exceed the cap and are authorized by districts without the required staffing capacity, the bill directs the SBE to reassign the charter to a larger authorizer within the county at the time of the school’s next renewal. These changes are intended to better align authorizer oversight capacity with the scale of the schools they oversee.
- Preventing attendance fraud through data modernization and calendar safeguards. One of the most egregious findings in the A3 fraud case was the manipulation of student enrollment and calendars to double- or triple-count attendance for state funding. This was made possible, in part, because California lacks a real-time, student-level system for tracking ADA. Currently, attendance is reported separately from student demographic data in CALPADS, making it difficult to detect duplicate or sequential enrollments across schools. This bill directs CDE to study the feasibility of integrating attendance data into CALPADS by 2030, laying the groundwork for long-term improvements in fraud detection.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Senate Appropriations Committee:
- The California Department of Education (CDE) estimates General Fund costs of $13.5 million each year to establish and staff the Office of Inspector General. This estimates assumes an office size of 45 staff which includes an Inspector General and a Deputy Inspector General, and that the office would leverage existing HR, IT, and legal services within CDE. The CDE estimates additional General Fund costs of $174,000 each year for one position and $750,000 in one-time General Fund to contract for work associated with the feasibility of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and apportionment data systems.
- The Fiscal Crisis and Management Assistance Team (FCMAT) estimates Proposition 98 General Fund costs ranging from $623,000 to $1.043 million each year and two to three positions to establish and operate the Charter Authorizing Technical Assistance Team. The FCMAT estimates additional, one-time Proposition 98 General Fund costs of $100,000 to comply with the bill’s requirement for the CDE, in consultation with FCMAT, to report on the CALPADS and apportionment data systems alignment.
- This State Controller’s Office (SCO) estimates General Fund costs of $1.6 million each year to hire 7.5 additional staff to implement the bill’s provisions regarding independent auditor quality control reviews. These resources would be used to verify mathematical accuracy of additional schedules, certify additional CPA training hours, perform quality control reviews of CPA firms, and additional administrative tasks such as updating the K-12 audit guide.
- This bill could result in additional, unknown Proposition 98 General Fund costs each year for charter schools to comply with the bill’s new audit requirements. Each local educational agency (LEA) contracts with an independent auditing firm to conduct its annual audit to verify compliance with state law. These auditing firms could charge higher fees to LEAs to account for the additional requirements.
- To the extent that the bill’s increased oversight provisions lead to the closure of some NCB charter schools or there is a reduction in educational options (including vendor-based services) that would be available, the transferring of students to traditional public schools or other charter schools could have a local fiscal impact. The extent of these costs is unknown and would vary depending on the type of LEAs involved, the number of students that transfer, and whether those students qualify for supplemental or concentration grant funding under the Local Control Funding Formula (LCFF). The LCFF entitlements or ADA funding for students that transfer within the public school system would typically follow those students, therefore the overall impact to the state would be cost neutral. However, if the students leave the public school system altogether and choose to attend private schools, there could be reduced ADA and LCFF costs for those students.
- The bill’s oversight provisions along with the establishment of the Office of the Inspector General could potentially result in unknown savings for the state to the extent they prevent or deter future fraud and the misuse of public funds.
SUPPORT: (Verified 9/10/25)
American Federation of State, County and Municipal Employees
California Democratic Party
California Federation of Labor Unions
California School Employees Association
California Teachers Association
CFT- a Union of Educators & Classified Professionals
Consumer Federation of California
Democrats of Rossmoor
Los Angeles County Democratic Party
Public Advocates
Several Individuals
OPPOSITION: (Verified 9/10/25)
21st Century Alliance
Achieve Charter Schools
Advocates for Faith & Freedom
Alder Grove Charter School
Allegiance Steam Academy
Alliance College-Ready Public Schools
Alliance of Independent Learners
Alma Fuerte Public School
Alpha Public Schools
Alta Public Schools
Altus Schools
America’s Finest Charter School
American Heritage Charter Schools
Antelope Valley Economic Development & Growth Enterprise
Antioch Charter Academy
Antioch Charter Academy II
Ararat Charter School
Arts in Action Community Charter Schools
ASA Charter School
Aspen Public Schools
Aspire Public Schools
Association of Personalized Learning Schools & Services
Autism Society Inland Empire
Aveson Schools
Big Picture Educational Academy
Big Sur Charter School
Birmingham Community Charter High School
Bridges Charter School
Bridges Preparatory Academy
Brookfield Engineering Science Technology
Butte County Office of Education
Cabrillo Point Academy
California Homeschool Network
California Association of School Business Officials
California Baptist for Biblical Values
California Catholic Conference
California Charter Schools Association
California County Superintendents
California Creative Learning Academy
California Montessori Project
California Online Public School
California Pacific Charter Schools
California Parents for Public Virtual Education
California Policy Center
California Republic Leadership Academy
California Virtual Academies
Camarillo Academy of Progressive Education
Camino Nuevo Charter Academy
Catalyst Legacy
Champs Charter High School of the Arts
Charter Schools Development Center
Children’s Community Charter School
Chime Institute
Choices Charter School
City of Huntington Beach
City of Porterville
Clarksville Charter School
Coastal Grove Charter School
College Prep Genius
Community Learning Center Schools
CORE a Community Collaboration
CORE Butte Charter School
CORE Charter School
County of Sonoma
Creative Cultivation Studio
Creative Learners of California
Creative Learning Place
Crossroads Charter Academy
CWC Los Angeles
Da Vinci Schools
Decentralize America
Delta Managed Solutions
Desert Trails Preparatory Academy
Discovery Charter Schools
Dixon Montessori Charter School
Dr. Lewis Dolphin Stallworth Charter School
Dual Language Immersion North County
Edison Bethune Charter Academy
Ednovate
Education for Change Public Schools
Eel River Charter School
El Sol Science and Arts Academy
Element Education
Elevate School
Environmental Charter Schools
Epic Charter School
Equitas Academy Charter Schools
Excel Academy Charter School
Extera Public Schools
Family Partnership Charter School
Feaster (Mae L.) Charter School
Feather River Charter School
Fenton Charter Public Schools
Foothill Learning Academy
Forest Charter School
Forest Ranch Charter
Freedom Angels
Fresno Innovative Charter Schools
Gabriella Charter Schools
Gateway College and Career Academy
Gateway Community Charters
Girls Athletic Leadership Schools Los Angeles
Glacier High School Charter
Golden Eagle Charter School
Golden Valley Charter School
Gorman Learning Charter Network
Granada Hills Charter
Granite Mountain Charter School
Great Valley Academy
Green DOT Public Schools
Griffin Technology Academies
Growth Public Schools
Guajome Schools
Hawking Steam Charter School
Heartwood Charter School
Hemet Christian Homeschool Moms
High Tech Los Angeles
History Rocks!
Home Haven Collective
Hometech Charter School
Howard Gardner Community School
ICEF Public Schools
iLEAD
iLEAD CA Charters 1
iLEAD California
Ingenium Schools
Innovations Academy
Innovative Education Management
Inspire School of Arts and Sciences
Intellectual Virtues Academy High
Invictus Leadership Academy
Irvine International Academy
Ivy Academia
JCS Family of Charter Schools
John Muir Charter Schools
Journey School
Kairos Public Schools
Kavod Charter School
Kepler Neighborhood School
Kid Street Charter School
Kidinnu Academy
KIPP Public Schools Northern California
LA Jolla Band of Luiseno Indians
Larchmont Charter School
Lashon Academy
Learn4life
Learning for Life Charter School
Legislation Take Action
Leonardo Da Vinci Health Sciences Charter School
Lighthouse Baptist Church
Literacy First Charter Schools
Little Explorers Homeschool Co-Op
Live Online Math
Los Angeles Academy of Arts and Enterprise
Magnolia Public Schools
Maria Montessori Charter Academy
Matrix for Success Academy
Mayacamas Countywide Middle School
Meadows Arts and Technology Elementary School
Megapixels School of the Arts
Method Schools
Mission Vista Academy
Montague Charter Academy
Motivated Youth Academy
Mountain Home School Charter
Multicultural Learning Center
Museum School Collaborative
Natomas Charter School
Natomas Homeschool Alliance
Natomas USD for Freedom
Navigator Schools
New Heights Charter School
New West Charter
Nord Country School
Northern United Charter Schools
Northwest Prep Charter School
Nova Academy Early College High School
Ocean Charter School
Odyssey Charter Schools
Olive Grove Charter School
Orange County Academy of Sciences and Arts
Orange County Board of Education
Orange County School of the Arts / California School of the Arts Foundation
Pacific Charter Institute
Pacific Justice Institute - Center for Public Policy
Pacific View Charter School
Pacoima Charter School
Para Los Ninos
Pasadena Rosebud Academy Charter School
Pauma Band of Luiseno Indians
Pazlo Education Foundation
PCA College View
Peabody Charter School
Peninsula Parents for Personalized Education
Plumas Charter School
Port of Los Angeles High School
Pseudogenius Learning Labs
Puente Learning Center
Real Impact.
Redding School District
Redwood Coast Montessori
Redwood Collegiate Academy
Renaissance Arts Academy
Revillage Napa Homeschoolers
Rex and Margaret Fortune School of Education
Rincon Band of Luiseno Indians
River Montessori Charter School
River Oaks Academy Charter School
River Springs Charter School
Rocklin Academy Family of Schools
Sage Oak Charter Schools
San Carlos Charter
San Diego Virtual School
San Jose Conservation Corps & Charter School
Santa Rosa Academy Parents
Santa Rosa French-American Charter School
Save Glendora Schools
Save Our Schools Coalition
Scale Leadership Academy
Scholarship Prep Charter School
Sebastopol Independent Charter
Sequoia Career Academy
Shade Canyon School
Shasta Charter Academy
Shasta View Academy
Sherman Thomas Charter School
Sherwood Montessori
Small School Districts Association
Soar Charter Academy
Southwest California Legislative Council
Sparrow Academy
Stand Up California
Stand Up Sacramento County
Stellar Charter School
Stem Prep Schools
Stride
Success One! Charter
Summit Enrichment Academy
Summit Public Schools
Suncoast Charter
Suncoast Prep Academy
Supporting True Options in Public Education Coalition
Sycamore Creek Community Charter School
Synergy Academies
Taylion High Desert Academy
Teach Public Schools
Tehama eLearning Academy
Temecula Valley Charter School
The Classical Academies
The Cottonwood School
The Foundation for Hispanic Education
The Grove School
The Language Academy of Sacramento
The Learning Choice Academy
The O’Farrell Charter Schools
The Preuss School UCSD
Tierra Pacifica Charter
Tree of Life Charter School
Trillium Charter School
Union Street Charter
Urban Charter Schools Collective
Valley Charter School
Valley Industry and Commerce Association
Valley International Preparatory High School
Valley Life Charter Schools
Valley View Charter Prep
Ventura Charter School of Arts and Global Education
Vibrant Minds Charter School
Virtual Learning Academy, Sage Oak Charter Schools
Vista Charter Public Schools
Vista Oaks Charter School
Voices College Bound Language Academies
Vox Collegiate
We Spark Learning
Westbrook Academy
Western Sierra Charter Schools
Westlake Charter School
Wildflower Open Classroom
William Finch Charter School
Write On!
YPI Charter Schools
Yuba County Career Preparatory Charter School
Numerous Individuals
ARGUMENTS IN SUPPORT: The California School Employees Association (CSEA), sponsor of AB 84, supports the bill as a necessary set of reforms aligned with recommendations from the LAO, FCMAT, the SCO’s Charter Audit Task Force, and the California Charter Authorizing Professionals. CSEA argues that California’s existing oversight framework for NCB charter schools has proven inadequate, allowing significant misuse of public funds and governance breakdowns.
CSEA highlights the 2019 A3 Education scandal, in which $400 million in state funds were misappropriated through fraudulent student enrollment schemes and self-dealing contracts. A3 targeted small school districts with limited capacity to serve as authorizers and operated a network of schools under centralized control, using their authority to contract with related entities. CSEA contends that this case illustrates how existing safeguards—audits, authorizer oversight, and the funding determination process—failed to prevent large-scale fraud.
With the NCB charter moratorium set to expire in January 2026, CSEA believes AB 84 is a timely and measured response. The bill reflects the work of nonpartisan agencies tasked with identifying structural gaps and proposing improvements. In CSEA’s view, the Legislature must act now to close loopholes and ensure that public funding for NCB charter schools is subject to stronger accountability moving forward.
ARGUMENTS IN OPPOSITION: A coalition representing nearly all California charter schools—including APLUS+, the California Charter Schools Association, and the Charter Schools Development Center—opposes AB 84. While the coalition supports efforts to prevent fraud, it argues that the bill takes a heavy-handed approach that would impose excessive administrative requirements, divert funds from classrooms, and establish two new state bureaucracies. The coalition instead supports SB 414 (Ashby, 2025), which they view as a more balanced and targeted reform effort aligned with the recommendations of recent oversight reports and better suited to support high-performing charter schools.
Opponents contend that AB 84 goes well beyond what recent oversight reports recommend and reopens long-settled policy issues without clear justification. They argue that the bill expands audit and authorizer oversight duties without ensuring accountability for authorizers themselves, caps authorizing authority based on district size without supporting data, and imposes costly mandates on schools and state agencies without providing funding. They also raise concerns about provisions such as limits on teacher compensation for meetings, new reporting obligations, and the creation of new oversight agencies, asserting these are not grounded in evidence and would harm effective educational programs.
While acknowledging that discussions with the author’s office and committee staff are ongoing, the coalition believes that AB 84 is not the right vehicle for reform in its current form. They describe the bill as punitive, costly, and unlikely to achieve its intended outcomes. The coalition reaffirms its support for responsible charter school oversight and expresses appreciation for the committee’s earlier support of SB 414 as a more appropriate path forward.
ASSEMBLY FLOOR: 43-25, 6/5/25
AYES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bains, Bennett, Boerner, Bonta, Bryan, Calderon, Caloza, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Hart, Kalra, Lee, Lowenthal, Muratsuchi, Nguyen, Papan, Patel, Pellerin, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Zbur, Rivas
NOES: Alanis, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Flora, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Irwin, Lackey, Macedo, Pacheco, Patterson, Petrie-Norris, Ramos, Michelle Rodriguez, Blanca Rubio, Sanchez, Ta, Tangipa, Wallis
NO VOTE RECORDED: Bauer-Kahan, Berman, Carrillo, Harabedian, Jackson, Krell, McKinnor, Ortega, Quirk-Silva, Ransom, Wilson
Prepared by: Ian Johnson / ED. / (916) 651-4105
9/12/25 13:56:54
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 84 |
THIRD READING
Bill No: AB 84
Author: Muratsuchi (D) and Garcia (D), et al.
Amended: 9/9/25 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE: 4-2, 7/16/25
AYES: Pérez, Cortese, Gonzalez, Laird
NOES: Ochoa Bogh, Choi
NO VOTE RECORDED: Cabaldon
SENATE APPROPRIATIONS COMMITTEE: 4-2, 8/29/25
AYES: Caballero, Grayson, Richardson, Wahab
NOES: Seyarto, Dahle
NO VOTE RECORDED: Cabaldon
ASSEMBLY FLOOR: 43-25, 6/5/25 - See last page for vote
SUBJECT: School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, networks, and contracting: data systems: local educational agency contractor background checks and contracting
SOURCE: Author
DIGEST:
This bill makes a series of changes to the oversight and operation of nonclassroom-based (NCB) charter schools. Specifically, it: (1) increases audit requirements and authorizer responsibilities; (2) revises the funding determination process to include additional financial reporting and a review of charter networks; (3) imposes restrictions on certain contracting practices; and (4) places new limits on the ability of small school districts to authorize NCB charter schools that serve student populations larger than their own.
Senate Floor amendments of 9/9/25: (1) expand the annual audit guide to include new schedules on enrollment, funding determinations, contracts, and governance, while adding charter and classified employee advocacy groups to the stakeholder process, (2) allow funding determinations to continue indefinitely if verified annually, (3) require consistency across networks in audits or State Board hearings, (4) restrict certain contracts by banning season passes and attendance incentives, (5) create grant programs for authorizer mentor support, authorizer oversight costs, and charters transitioning to the Standardized Account Code Structure (SACS) accounting system, (6) temporarily bar authorizers under corrective assistance from approving new NCB schools, and (7) direct the Legislative Analyst’s Office (LAO) to study the bill’s new mandates on charters to inform adjustments to the mandate block grant.
ANALYSIS:
Existing law:
- Requires charter schools to submit annual independent financial and compliance audits conducted by certified public accountants.
- Requires that audit reports be submitted to the chartering authority, the county superintendent, the State Controller’s Office (SCO), and the California Department of Education (CDE).
- Requires financial and compliance audits to follow General Accounting Office standards and the audit guide developed by the Education Audits Appeal Panel (EAAP), once adopted.
- Does not require charter schools to use SACS, unlike school districts.
- Authorizes the SCO to conduct quality control reviews of audits, but does not require regular selection of charter school audits for review.
- Requires charter schools that offer less than 80% of instructional time on school sites to obtain a funding determination from the State Board of Education (SBE) in order to receive apportionment funding.
- Authorizes the SBE to fund NCB instruction at up to 70% of standard funding unless a higher rate is justified.
- Requires the SBE to consider factors such as the charter school’s spending on certificated salaries and benefits, expenditures on schoolsites, and teacher-to-pupil ratios when making a funding determination.
- Does not require charter schools that are part of a network to apply jointly for a funding determination, nor does it require them to submit updated financial documentation between determination years.
- Grants charter schools greater flexibility than school districts in contracting and generally exempts them from the Public Contract Code (PCC).
- Permits charter school contracts to be structured as a percentage of school revenue and does not prohibit contracts with private or religious organizations.
- Allows charter schools to provide funds or credits to families for educational enrichment activities, even if those activities are not provided by credentialed staff.
- Imposes no statutory restriction on charter school employee compensation based on student attendance or course completion.
- Requires charter authorizers to provide general oversight, including annual site visits, fiscal monitoring, and compliance with required reporting, such as the Local Control and Accountability Plan (LCAP).
- Authorizes authorizers to charge up to 1% of a charter school’s revenue for oversight, or up to 3% if the authorizer provides substantially rent-free facilities.
- Previously supported a Charter School Authorizer Technical Assistance Team at Fiscal Crisis and Management Assistance Team (FCMAT), but that team was defunded in 2020 and no longer operates.
- Results in wide variation in the quality and depth of authorizer oversight, particularly among small school districts with limited capacity.
- Requires California Longitudinal Pupil Achievement Data System (CALPADS) to collect student demographic and achievement data, but this system is not integrated with the state’s attendance-based funding system.
- Requires charter schools to report attendance data separately to CDE, which can allow for duplicative or inflated attendance reporting.
- Permits any school district, regardless of size or capacity, to authorize charter schools, including NCB charter schools.
- Does not impose a statutory cap on the number of charter school pupils a district may authorize in proportion to its own average daily attendance (ADA).
- Does not authorize or require the reassignment of charter schools to larger or more capable authorizers upon renewal.
- Authorizes local educational agencies (LEAs), including charter schools, to offer IS and CBIS programs under specific requirements related to credentialed supervision, content rigor, and written learning agreements.
- Prohibits pupils with an Individualized Education Plan (IEP) from participating in IS unless their IEP explicitly allows it.
- Imposes a funding penalty for CBIS if more than 10% of an LEA’s total ADA is generated through CBIS, unless the LEA qualifies for an exemption.
- Imposes a moratorium on the authorization of new NCB charter schools until January 1, 2026.
- Allows existing NCB charter schools to seek renewals or material revisions during the moratorium, under specified conditions.
This bill:
- Requires training for LEA auditors.
- Updates the audit compliance procedures and audit guide to include sampling guidance, enrollment and attendance by month, related-party transactions, student–teacher ratios, large transfers, funding determinations, credit card/electronic payments, and charter oversight practices.
- Establishes risk-based quality control reviews by the State Controller.
- Requires schools to correct over-appropriated attendance and post audits on their websites.
- Creates the Office of the Inspector General under the SBE.
- Aligns charter school audit procedures with those of school districts, including use of the SACS, and establishes a grant program to reimburse charter schools for transitional costs.
- Requires the LAO to analyze the new mandates for purposes of adjusting the charter school mandate block grant.
- Requires charter authorizers with audit findings related to charter oversight to receive technical assistance.
- Authorizes NCB charter schools to retain State Board funding determinations indefinitely if annual audits verify compliance with thresholds.
- Requires schools in an NCB network to either use the same auditor or apply jointly in the same year, with network-wide review of pupil–teacher ratios and spending thresholds.
- Codifies mitigating circumstances, including reserves, one-time funds, and facility expenditures.
- Prohibits private religious schools from serving as public school contractors.
- Prohibits parents from contracting for services solely for their own child.
- Prohibits schools from purchasing season passes for amusement parks, zoos, or family entertainment venues.
- Prohibits gifts to pupils or prospective pupils.
- Requires contractors to hold a business license and insurance and prohibits them from charging pupil fees.
- Requires charter school contracts over $100,000 to be approved by the governing body.
- Prohibits employee bonuses based on student attendance.
- Requires CDE to study the feasibility of connecting CALPADS with the ADA funding system.
- Requires authorizers to strengthen oversight in key areas, including audit compliance, credit card/electronic payments, governing board monitoring, site visits, attendance accounting, and student–teacher ratios.
- Establishes a grant program to support authorizers with increased oversight costs.
- Caps the authorizing capacity of small districts (<10,000 ADA) to 100% of their own ADA.
- Allows existing NCB charters to remain with a small-district authorizer if the district has at least four executive-level staff.
- Requires the SBE to reassign NCB charters authorized by small districts to a larger district authorizer in the county upon renewal.
Comments
- Need for this bill. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
“One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
“Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
- Background on Charter Schools. Charter schools are public schools that operate under the terms of a charter agreement approved by a school district, county office of education, or the SBE. Established by the Charter Schools Act of 1992, they were intended to increase learning opportunities for all students, especially those who are academically low-achieving, and to promote innovation, site-based decision-making, and performance-based accountability.
Today, charter schools serve over 700,000 students in California. They are publicly funded and tuition-free but operate with greater flexibility in exchange for accountability for results. Charter schools may be operated by nonprofit organizations or, in some cases, by charter management organizations (CMOs) that oversee multiple schools. While most charter schools operate classroom-based programs similar to traditional schools, a significant share operate in a NCB model.
- What Are NCB Charter Schools? A charter school is considered NCB if less than 80% of its instructional time occurs under the immediate supervision of a credentialed teacher in a classroom setting. NCB charter schools may offer instruction through virtual, blended, or home-based learning models. These schools often serve high proportions of students with unique learning needs, such as students who are medically fragile, pursuing athletic or artistic careers, or seeking alternatives to traditional settings.
Because NCB schools are not funded automatically based on attendance like classroom-based schools, they must obtain a funding determination from the SBE. This process is based on an evaluation of audited expenditures and is intended to ensure public funds are being used for instructional purposes. However, the process has been widely criticized for its lack of rigor, real-time accountability, and effectiveness in preventing misuse of funds. The integrity of financial reporting in NCB schools plays a critical role in funding eligibility, and, when abused, can be exploited to inflate apportionments and divert public resources.
- The Moratorium on NCB Charter Schools and Broader 2019 Charter School Reforms. In 2019, the Legislature passed AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) and AB 1507 (Smith, Chapter 487, Statutes of 2019), which significantly restructured charter school law. Among other changes, AB 1505 strengthened the criteria for charter authorization and renewal by:
- Allowing authorizers to consider academic and fiscal impact on the district when reviewing petitions.
- Tying renewal decisions to a school’s performance on the California School Dashboard, streamlining renewal for high performers and requiring greater scrutiny for low performers.
- Expanding credentialing requirements to all charter school teachers and applying conflict-of-interest laws to charter boards.
AB 1507 restricted charter schools from operating sites outside their authorizing district’s boundaries.
Together, these bills also enacted a moratorium on new NCB charter schools through January 1, 2026. The pause was intended to give the state time to re-evaluate oversight, funding, and academic accountability in the NCB sector, following concerns about weak controls and inconsistent performance.
This bill builds on this reformed oversight landscape by proposing additional audit, fiscal, and governance tools specific to charter school accountability.
- The A3 Charter Schools Fraud Case. The most significant charter school fraud case in California’s history, the A3 Education scandal, came to light in 2019. Prosecutors alleged that two individuals created a network of 19 NCB charter schools and enrolled tens of thousands of students, many without their knowledge or participation, to fraudulently claim public funding. The scheme involved:
- Inflated and duplicated enrollment using a manipulated “multi-track” calendar.
- Unauthorized use of public funds through related-party contracts.
- A total fraud estimate of over $400 million in misappropriated state funds.
The case revealed multiple breakdowns in the oversight chain—from charter authorizers to external auditors to state agencies—prompting calls for systemic reform.
- Oversight Reports Prompting Legislative Action. In response to the A3 scandal and other fraud incidents, state and independent agencies released two major reports:
- SCO Charter School Audit Task Force Report (2024): Focused on improving the quality of school audits by increasing auditor training, revising the audit guide, establishing certified public accountant review and rotation policies, and ensuring follow-up on audit findings.
- LAO/FCMAT Joint Report on NCB Charter Schools (2024): Analyzed the NCB funding determination process and recommended major changes to better align funding with instructional delivery. Recommendations included real-time enrollment tracking, clearer definitions of instruction, and changes to charter oversight authority.
- State audit of Highlands underscores need for stronger oversight. A June 2025 report by the State Auditor found that Highlands Community Charter improperly claimed over $180 million in K–12 funding, operated with uncredentialed teachers, and engaged in wasteful spending and conflicts of interest. The audit also faulted Twin Rivers Unified School District and state agencies for lax oversight, despite prior warnings. While not every finding directly maps onto this bill’s provisions, the report highlights systemic weaknesses in oversight, transparency, and governance that this bill seeks to address.
- Balancing accountability with support for student-centered choice. This bill has generated substantial public engagement, especially from families who rely on NCB charter schools for educational flexibility. Many of these messages express concern that increased oversight could restrict school choice or reflect a broader opposition to charter schools. These concerns reflect real experiences and deserve to be taken seriously.
At the same time, this bill emerged in response to longstanding oversight concerns and notable fraud cases—not from an effort to limit educational options. In cases like A3 and Highlands, weaknesses in data systems, fiscal reporting, and oversight structures enabled large-scale misuse of public funds. To address these concerns, state agencies developed recommendations aimed at improving transparency, accountability, and operational safeguards in the NCB space.
This bill is built around those recommendations. Many early provisions have been amended or removed in response to stakeholder concerns. The remaining proposals focus on strengthening financial practices, clarifying oversight roles, and ensuring that public funds are used appropriately.
Support for this bill—or for the concepts it puts forward—does not need to signal a position on the broader debate over charter schools. It may simply reflect a belief that clear accountability standards are essential to preserving the innovation and flexibility that many families value in NCB charter programs.
- Targeted reforms in line with oversight recommendations. This bill reflects a coordinated response to the findings of the 2024 LAO/FCMAT review of the NCB funding determination process and the SCO’s Charter School Audit Task Force. Both reports identified systemic vulnerabilities in the oversight of NCB charter schools, particularly related to fiscal accountability, weak audit standards, and insufficient authorizer capacity. The bill seeks to close these gaps through a range of provisions aimed at standardizing audits, clarifying oversight responsibilities, limiting authorizations by small school districts, and increasing transparency in attendance accounting. Unlike early versions of the bill, these reforms are not intended to reduce funding to charter schools or change the instructional models they may offer. Rather, they are focused on ensuring that public funds are spent appropriately and that oversight mechanisms are robust and equitable.
- Improved audit practices and financial accountability. A major theme of both the LAO/FCMAT report and the SCO’s Charter School Audit Task Force findings was the need to modernize and strengthen charter school audits. The A3 case revealed that NCB charter schools were able to hide fraudulent practices due to insufficient audit procedures, lack of auditor training, and the ability to switch auditors if problems were identified. The bill addresses these concerns by aligning charter school audit procedures with those used for school districts, requiring auditors to receive specialized training, and directing the Education Audit Appeals Panel to revise the audit guide to include new areas of review specific to NCB charter schools, such as teacher-pupil ratios and documentation sampling. These changes are intended to ensure that audits are not only more rigorous but also better able to detect misuse of funds and systemic noncompliance.
- Ensuring authorizer accountability as part of a comprehensive oversight system. The most serious charter school fraud cases in California—A3 and Highlands—were perpetrated by school operators who intentionally misused public funds. However, these cases also revealed weaknesses in the oversight infrastructure that allowed misconduct to persist undetected for years. Charter school authorizers play a critical role in ensuring legal compliance and educational quality, but that role varies considerably depending on the size, capacity, and approach of the authorizing district.
In some instances, authorizers lacked sufficient resources or staff expertise to monitor complex NCB programs, especially those serving students far beyond district boundaries. In others, warning signs were missed or under-addressed, despite red flags in audits or financial reports. This bill does not assign blame to authorizers for every instance of misconduct, but it does reflect a broader consensus that oversight obligations must be taken seriously—and that there should be reasonable consequences when they are not.
To that end, the bill strengthens expectations for authorizer monitoring in key risk areas such as attendance accounting, electronic payments, and student-to-teacher ratios. It also seeks to align authorizing capacity with district size and staff infrastructure. While the bill stops short of imposing direct financial penalties on authorizers, the concept of holding authorizers more accountable—such as through potential reimbursement of oversight fees when duties are neglected—has been raised during policy discussions and may merit future consideration. These reforms are ultimately designed not to penalize oversight agencies, but to ensure that the safeguards intended to protect students and taxpayers function as intended.
- Matching authorizer capacity to oversight responsibility. This bill limits the ability of small school districts to authorize NCB charter schools that serve student populations larger than the district itself. Specifically, districts with fewer than 10,000 ADA may authorize NCB charter schools only up to a combined enrollment equal to 100% of their own ADA. Existing NCB charter schools may remain with their current small district authorizer if that authorizer employs at least four executive-level staff. For NCB charter schools that exceed the cap and are authorized by districts without the required staffing capacity, the bill directs the SBE to reassign the charter to a larger authorizer within the county at the time of the school’s next renewal. These changes are intended to better align authorizer oversight capacity with the scale of the schools they oversee.
- Preventing attendance fraud through data modernization and calendar safeguards. One of the most egregious findings in the A3 fraud case was the manipulation of student enrollment and calendars to double- or triple-count attendance for state funding. This was made possible, in part, because California lacks a real-time, student-level system for tracking ADA. Currently, attendance is reported separately from student demographic data in CALPADS, making it difficult to detect duplicate or sequential enrollments across schools. This bill directs CDE to study the feasibility of integrating attendance data into CALPADS by 2030, laying the groundwork for long-term improvements in fraud detection.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Senate Appropriations Committee:
- The California Department of Education (CDE) estimates General Fund costs of $13.5 million each year to establish and staff the Office of Inspector General. This estimates assumes an office size of 45 staff which includes an Inspector General and a Deputy Inspector General, and that the office would leverage existing HR, IT, and legal services within CDE. The CDE estimates additional General Fund costs of $174,000 each year for one position and $750,000 in one-time General Fund to contract for work associated with the feasibility of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and apportionment data systems.
- The Fiscal Crisis and Management Assistance Team (FCMAT) estimates Proposition 98 General Fund costs ranging from $623,000 to $1.043 million each year and two to three positions to establish and operate the Charter Authorizing Technical Assistance Team. The FCMAT estimates additional, one-time Proposition 98 General Fund costs of $100,000 to comply with the bill’s requirement for the CDE, in consultation with FCMAT, to report on the CALPADS and apportionment data systems alignment.
- This State Controller’s Office (SCO) estimates General Fund costs of $1.6 million each year to hire 7.5 additional staff to implement the bill’s provisions regarding independent auditor quality control reviews. These resources would be used to verify mathematical accuracy of additional schedules, certify additional CPA training hours, perform quality control reviews of CPA firms, and additional administrative tasks such as updating the K-12 audit guide.
- This bill could result in additional, unknown Proposition 98 General Fund costs each year for charter schools to comply with the bill’s new audit requirements. Each local educational agency (LEA) contracts with an independent auditing firm to conduct its annual audit to verify compliance with state law. These auditing firms could charge higher fees to LEAs to account for the additional requirements.
- To the extent that the bill’s increased oversight provisions lead to the closure of some NCB charter schools or there is a reduction in educational options (including vendor-based services) that would be available, the transferring of students to traditional public schools or other charter schools could have a local fiscal impact. The extent of these costs is unknown and would vary depending on the type of LEAs involved, the number of students that transfer, and whether those students qualify for supplemental or concentration grant funding under the Local Control Funding Formula (LCFF). The LCFF entitlements or ADA funding for students that transfer within the public school system would typically follow those students, therefore the overall impact to the state would be cost neutral. However, if the students leave the public school system altogether and choose to attend private schools, there could be reduced ADA and LCFF costs for those students.
- The bill’s oversight provisions along with the establishment of the Office of the Inspector General could potentially result in unknown savings for the state to the extent they prevent or deter future fraud and the misuse of public funds.
SUPPORT: (Verified 9/10/25)
American Federation of State, County and Municipal Employees
California Democratic Party
California Federation of Labor Unions
California School Employees Association
California Teachers Association
CFT- a Union of Educators & Classified Professionals
Consumer Federation of California
Democrats of Rossmoor
Los Angeles County Democratic Party
Public Advocates
Several Individuals
OPPOSITION: (Verified 9/10/25)
21st Century Alliance
Achieve Charter Schools
Advocates for Faith & Freedom
Alder Grove Charter School
Allegiance Steam Academy
Alliance College-Ready Public Schools
Alliance of Independent Learners
Alma Fuerte Public School
Alpha Public Schools
Alta Public Schools
Altus Schools
America’s Finest Charter School
American Heritage Charter Schools
Antelope Valley Economic Development & Growth Enterprise
Antioch Charter Academy
Antioch Charter Academy II
Ararat Charter School
Arts in Action Community Charter Schools
ASA Charter School
Aspen Public Schools
Aspire Public Schools
Association of Personalized Learning Schools & Services
Autism Society Inland Empire
Aveson Schools
Big Picture Educational Academy
Big Sur Charter School
Birmingham Community Charter High School
Bridges Charter School
Bridges Preparatory Academy
Brookfield Engineering Science Technology
Butte County Office of Education
Cabrillo Point Academy
California Homeschool Network
California Association of School Business Officials
California Baptist for Biblical Values
California Catholic Conference
California Charter Schools Association
California County Superintendents
California Creative Learning Academy
California Montessori Project
California Online Public School
California Pacific Charter Schools
California Parents for Public Virtual Education
California Policy Center
California Republic Leadership Academy
California Virtual Academies
Camarillo Academy of Progressive Education
Camino Nuevo Charter Academy
Catalyst Legacy
Champs Charter High School of the Arts
Charter Schools Development Center
Children’s Community Charter School
Chime Institute
Choices Charter School
City of Huntington Beach
City of Porterville
Clarksville Charter School
Coastal Grove Charter School
College Prep Genius
Community Learning Center Schools
CORE a Community Collaboration
CORE Butte Charter School
CORE Charter School
County of Sonoma
Creative Cultivation Studio
Creative Learners of California
Creative Learning Place
Crossroads Charter Academy
CWC Los Angeles
Da Vinci Schools
Decentralize America
Delta Managed Solutions
Desert Trails Preparatory Academy
Discovery Charter Schools
Dixon Montessori Charter School
Dr. Lewis Dolphin Stallworth Charter School
Dual Language Immersion North County
Edison Bethune Charter Academy
Ednovate
Education for Change Public Schools
Eel River Charter School
El Sol Science and Arts Academy
Element Education
Elevate School
Environmental Charter Schools
Epic Charter School
Equitas Academy Charter Schools
Excel Academy Charter School
Extera Public Schools
Family Partnership Charter School
Feaster (Mae L.) Charter School
Feather River Charter School
Fenton Charter Public Schools
Foothill Learning Academy
Forest Charter School
Forest Ranch Charter
Freedom Angels
Fresno Innovative Charter Schools
Gabriella Charter Schools
Gateway College and Career Academy
Gateway Community Charters
Girls Athletic Leadership Schools Los Angeles
Glacier High School Charter
Golden Eagle Charter School
Golden Valley Charter School
Gorman Learning Charter Network
Granada Hills Charter
Granite Mountain Charter School
Great Valley Academy
Green DOT Public Schools
Griffin Technology Academies
Growth Public Schools
Guajome Schools
Hawking Steam Charter School
Heartwood Charter School
Hemet Christian Homeschool Moms
High Tech Los Angeles
History Rocks!
Home Haven Collective
Hometech Charter School
Howard Gardner Community School
ICEF Public Schools
iLEAD
iLEAD CA Charters 1
iLEAD California
Ingenium Schools
Innovations Academy
Innovative Education Management
Inspire School of Arts and Sciences
Intellectual Virtues Academy High
Invictus Leadership Academy
Irvine International Academy
Ivy Academia
JCS Family of Charter Schools
John Muir Charter Schools
Journey School
Kairos Public Schools
Kavod Charter School
Kepler Neighborhood School
Kid Street Charter School
Kidinnu Academy
KIPP Public Schools Northern California
LA Jolla Band of Luiseno Indians
Larchmont Charter School
Lashon Academy
Learn4life
Learning for Life Charter School
Legislation Take Action
Leonardo Da Vinci Health Sciences Charter School
Lighthouse Baptist Church
Literacy First Charter Schools
Little Explorers Homeschool Co-Op
Live Online Math
Los Angeles Academy of Arts and Enterprise
Magnolia Public Schools
Maria Montessori Charter Academy
Matrix for Success Academy
Mayacamas Countywide Middle School
Meadows Arts and Technology Elementary School
Megapixels School of the Arts
Method Schools
Mission Vista Academy
Montague Charter Academy
Motivated Youth Academy
Mountain Home School Charter
Multicultural Learning Center
Museum School Collaborative
Natomas Charter School
Natomas Homeschool Alliance
Natomas USD for Freedom
Navigator Schools
New Heights Charter School
New West Charter
Nord Country School
Northern United Charter Schools
Northwest Prep Charter School
Nova Academy Early College High School
Ocean Charter School
Odyssey Charter Schools
Olive Grove Charter School
Orange County Academy of Sciences and Arts
Orange County Board of Education
Orange County School of the Arts / California School of the Arts Foundation
Pacific Charter Institute
Pacific Justice Institute - Center for Public Policy
Pacific View Charter School
Pacoima Charter School
Para Los Ninos
Pasadena Rosebud Academy Charter School
Pauma Band of Luiseno Indians
Pazlo Education Foundation
PCA College View
Peabody Charter School
Peninsula Parents for Personalized Education
Plumas Charter School
Port of Los Angeles High School
Pseudogenius Learning Labs
Puente Learning Center
Real Impact.
Redding School District
Redwood Coast Montessori
Redwood Collegiate Academy
Renaissance Arts Academy
Revillage Napa Homeschoolers
Rex and Margaret Fortune School of Education
Rincon Band of Luiseno Indians
River Montessori Charter School
River Oaks Academy Charter School
River Springs Charter School
Rocklin Academy Family of Schools
Sage Oak Charter Schools
San Carlos Charter
San Diego Virtual School
San Jose Conservation Corps & Charter School
Santa Rosa Academy Parents
Santa Rosa French-American Charter School
Save Glendora Schools
Save Our Schools Coalition
Scale Leadership Academy
Scholarship Prep Charter School
Sebastopol Independent Charter
Sequoia Career Academy
Shade Canyon School
Shasta Charter Academy
Shasta View Academy
Sherman Thomas Charter School
Sherwood Montessori
Small School Districts Association
Soar Charter Academy
Southwest California Legislative Council
Sparrow Academy
Stand Up California
Stand Up Sacramento County
Stellar Charter School
Stem Prep Schools
Stride
Success One! Charter
Summit Enrichment Academy
Summit Public Schools
Suncoast Charter
Suncoast Prep Academy
Supporting True Options in Public Education Coalition
Sycamore Creek Community Charter School
Synergy Academies
Taylion High Desert Academy
Teach Public Schools
Tehama eLearning Academy
Temecula Valley Charter School
The Classical Academies
The Cottonwood School
The Foundation for Hispanic Education
The Grove School
The Language Academy of Sacramento
The Learning Choice Academy
The O’Farrell Charter Schools
The Preuss School UCSD
Tierra Pacifica Charter
Tree of Life Charter School
Trillium Charter School
Union Street Charter
Urban Charter Schools Collective
Valley Charter School
Valley Industry and Commerce Association
Valley International Preparatory High School
Valley Life Charter Schools
Valley View Charter Prep
Ventura Charter School of Arts and Global Education
Vibrant Minds Charter School
Virtual Learning Academy, Sage Oak Charter Schools
Vista Charter Public Schools
Vista Oaks Charter School
Voices College Bound Language Academies
Vox Collegiate
We Spark Learning
Westbrook Academy
Western Sierra Charter Schools
Westlake Charter School
Wildflower Open Classroom
William Finch Charter School
Write On!
YPI Charter Schools
Yuba County Career Preparatory Charter School
Numerous Individuals
ARGUMENTS IN SUPPORT: The California School Employees Association (CSEA), sponsor of AB 84, supports the bill as a necessary set of reforms aligned with recommendations from the LAO, FCMAT, the SCO’s Charter Audit Task Force, and the California Charter Authorizing Professionals. CSEA argues that California’s existing oversight framework for NCB charter schools has proven inadequate, allowing significant misuse of public funds and governance breakdowns.
CSEA highlights the 2019 A3 Education scandal, in which $400 million in state funds were misappropriated through fraudulent student enrollment schemes and self-dealing contracts. A3 targeted small school districts with limited capacity to serve as authorizers and operated a network of schools under centralized control, using their authority to contract with related entities. CSEA contends that this case illustrates how existing safeguards—audits, authorizer oversight, and the funding determination process—failed to prevent large-scale fraud.
With the NCB charter moratorium set to expire in January 2026, CSEA believes AB 84 is a timely and measured response. The bill reflects the work of nonpartisan agencies tasked with identifying structural gaps and proposing improvements. In CSEA’s view, the Legislature must act now to close loopholes and ensure that public funding for NCB charter schools is subject to stronger accountability moving forward.
ARGUMENTS IN OPPOSITION: A coalition representing nearly all California charter schools—including APLUS+, the California Charter Schools Association, and the Charter Schools Development Center—opposes AB 84. While the coalition supports efforts to prevent fraud, it argues that the bill takes a heavy-handed approach that would impose excessive administrative requirements, divert funds from classrooms, and establish two new state bureaucracies. The coalition instead supports SB 414 (Ashby, 2025), which they view as a more balanced and targeted reform effort aligned with the recommendations of recent oversight reports and better suited to support high-performing charter schools.
Opponents contend that AB 84 goes well beyond what recent oversight reports recommend and reopens long-settled policy issues without clear justification. They argue that the bill expands audit and authorizer oversight duties without ensuring accountability for authorizers themselves, caps authorizing authority based on district size without supporting data, and imposes costly mandates on schools and state agencies without providing funding. They also raise concerns about provisions such as limits on teacher compensation for meetings, new reporting obligations, and the creation of new oversight agencies, asserting these are not grounded in evidence and would harm effective educational programs.
While acknowledging that discussions with the author’s office and committee staff are ongoing, the coalition believes that AB 84 is not the right vehicle for reform in its current form. They describe the bill as punitive, costly, and unlikely to achieve its intended outcomes. The coalition reaffirms its support for responsible charter school oversight and expresses appreciation for the committee’s earlier support of SB 414 as a more appropriate path forward.
ASSEMBLY FLOOR: 43-25, 6/5/25
AYES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bains, Bennett, Boerner, Bonta, Bryan, Calderon, Caloza, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Hart, Kalra, Lee, Lowenthal, Muratsuchi, Nguyen, Papan, Patel, Pellerin, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Zbur, Rivas
NOES: Alanis, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Flora, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Irwin, Lackey, Macedo, Pacheco, Patterson, Petrie-Norris, Ramos, Michelle Rodriguez, Blanca Rubio, Sanchez, Ta, Tangipa, Wallis
NO VOTE RECORDED: Bauer-Kahan, Berman, Carrillo, Harabedian, Jackson, Krell, McKinnor, Ortega, Quirk-Silva, Ransom, Wilson
Prepared by: Ian Johnson / ED. / (916) 651-4105
9/11/25 13:12:199/11/25 13:12:19
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 84 |
THIRD READING
Bill No: AB 84
Author: Muratsuchi (D) and Garcia (D), et al.
Amended: 8/29/25 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE: 4-2, 7/16/25
AYES: Pérez, Cortese, Gonzalez, Laird
NOES: Ochoa Bogh, Choi
NO VOTE RECORDED: Cabaldon
SENATE APPROPRIATIONS COMMITTEE: 4-2, 8/29/25
AYES: Caballero, Grayson, Richardson, Wahab
NOES: Seyarto, Dahle
NO VOTE RECORDED: Cabaldon
ASSEMBLY FLOOR: 43-25, 6/5/25 - See last page for vote
SUBJECT: School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, networks, and contracting: data systems: local educational agency contractor background checks
SOURCE: California School Employees Association
DIGEST:
This bill makes a series of changes to the oversight and operation of nonclassroom-based (NCB) charter schools. This bill (1) increases audit requirements and authorizer responsibilities; (2) revises the funding determination process to include additional financial reporting and a review of charter networks; (3) imposes restrictions on certain contracting practices and the use of academic enrichment funds; and (4) places new limits on the ability of small school districts to authorize NCB charter schools that serve student populations larger than their own.
ANALYSIS:
Existing law:
- Requires charter schools to submit annual independent financial and compliance audits conducted by certified public accountants.
- Requires that audit reports be submitted to the chartering authority, the county superintendent, the State Controller’s Office (SCO), and the California Department of Education (CDE).
- Requires financial and compliance audits to follow General Accounting Office standards and the audit guide developed by the Education Audits Appeal Panel (EAAP), once adopted.
- Does not require charter schools to use the Standardized Account Code Structure (SACS), unlike school districts.
- Authorizes the SCO to conduct quality control reviews of audits, but does not require regular selection of charter school audits for review.
- Requires charter schools that offer less than 80% of instructional time on school sites to obtain a funding determination from the State Board of Education (SBE) in order to receive apportionment funding.
- Authorizes the SBE to fund NCB instruction at up to 70% of standard funding unless a higher rate is justified.
- Requires the SBE to consider factors such as the charter school’s spending on certificated salaries and benefits, expenditures on schoolsites, and teacher-to-pupil ratios when making a funding determination.
- Does not require charter schools that are part of a network to apply jointly for a funding determination, nor does it require them to submit updated financial documentation between determination years.
- Grants charter schools greater flexibility than school districts in contracting and generally exempts them from the Public Contract Code.
- Permits charter school contracts to be structured as a percentage of school revenue and does not prohibit contracts with private or religious organizations.
- Allows charter schools to provide funds or credits to families for educational enrichment activities, even if those activities are not provided by credentialed staff.
- Imposes no statutory restriction on charter school employee compensation based on student attendance or course completion.
- Requires charter authorizers to provide general oversight, including annual site visits, fiscal monitoring, and compliance with required reporting, such as the Local Control and Accountability Plan.
- Authorizes authorizers to charge up to 1% of a charter school’s revenue for oversight, or up to 3% if the authorizer provides substantially rent-free facilities.
- Previously supported a Charter School Authorizer Technical Assistance Team at Fiscal Crisis and Management Assistance Team (FCMAT), but that team was defunded in 2020 and no longer operates.
- Results in wide variation in the quality and depth of authorizer oversight, particularly among small school districts with limited capacity.
- Requires California Longitudinal Pupil Achievement Data System (CALPADS) to collect student demographic and achievement data, but this system is not integrated with the state’s attendance-based funding system.
- Requires charter schools to report attendance data separately to CDE, which can allow for duplicative or inflated attendance reporting.
- Permits any school district, regardless of size or capacity, to authorize charter schools, including NCB charter schools.
- Does not impose a statutory cap on the number of charter school pupils a district may authorize in proportion to its own average daily attendance (ADA).
- Does not authorize or require the reassignment of charter schools to larger or more capable authorizers upon renewal.
- Authorizes local educational agencies (LEAs), including charter schools, to offer IS and CBIS programs under specific requirements related to credentialed supervision, content rigor, and written learning agreements.
- Prohibits pupils with an Individualized Education Plan (IEP) from participating in IS unless their IEP explicitly allows it.
- Imposes a funding penalty for CBIS if more than 10% of an LEA’s total ADA is generated through CBIS, unless the LEA qualifies for an exemption.
- Imposes a moratorium on the authorization of new NCB charter schools until January 1, 2026.
- Allows existing NCB charter schools to seek renewals or material revisions during the moratorium, under specified conditions.
This bill:
- Aligns charter school audits with those of school districts, including audit timelines, procedures, and use of the SACS.
- Requires school auditors to complete targeted training.
- Directs updates to the audit guide and compliance procedures to include charter-specific content, including sampling methodology, attendance by track and month, material related-party transactions, classroom-based instructional minutes, student-teacher ratios, funding determination, large monetary transfers, electronic payments, and charter oversight practices.
- Requires the SCO to conduct more frequent quality control reviews of auditors.
- Establishes an Office of the Inspector General under the SBE to investigate charter-related financial misconduct.
- Retains the existing SBE funding determination process for NCB charter schools, but adds new transparency requirements, including:
- Requiring charter schools within the same network to apply jointly.
- Requiring submission of financial documents to CDE in non-determination years.
- Including the current expense of education in the funding determination review.
- Codifying mitigating factors such as reserves, one-time funds, and facilities spending.
- Prohibits charter schools from contracting with private religious organizations or schools.
- Prohibits schools from providing funding for season passes to amusement parks, zoos, family entertainment centers and theme parks.
- Prohibits gifts for pupils or prospective pupils.
- Requires contractors to have a business license and appropriate insurance.
- Requires charter school contracts over $100,000 to be approved by the governing body.
- Prohibits employee bonuses or compensation tied to student attendance or course completion.
- Reestablishes a statewide Charter Authorizer Technical Assistance team at FCMAT.
- Requires authorizers to provide enhanced oversight in key compliance areas, including:
- Attendance accounting and enrollment.
- Student-teacher ratios.
- Classroom-based instructional minutes.
- Audit compliance monitoring.
- Credit card and electronic expenditures.
- Requires CDE to study the feasibility of integrating CALPADS with the state’s ADA funding system to detect duplicate or excessive attendance claims.
- Caps authorizing capacity for districts with fewer than 10,000 ADA to no more than 100% of their own ADA in authorized NCB charter enrollment.
- Allows existing NCB charters to remain with a small-district authorizer if the district has at least four full-time executive-level staff.
- Requires the SBE to reassign NCB charters that exceed this threshold to a larger authorizer within the county upon renewal.
Comments
- Need for this bill. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
“One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
“Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
- Background on Charter Schools. Charter schools are public schools that operate under the terms of a charter agreement approved by a school district, county office of education, or the SBE. Established by the Charter Schools Act of 1992, they were intended to increase learning opportunities for all students, especially those who are academically low-achieving, and to promote innovation, site-based decision-making, and performance-based accountability.
Today, charter schools serve over 700,000 students in California. They are publicly funded and tuition-free but operate with greater flexibility in exchange for accountability for results. Charter schools may be operated by nonprofit organizations or, in some cases, by charter management organizations (CMOs) that oversee multiple schools. While most charter schools operate classroom-based programs similar to traditional schools, a significant share operate in a NCB model.
- What Are NCB Charter Schools? A charter school is considered NCB if less than 80% of its instructional time occurs under the immediate supervision of a credentialed teacher in a classroom setting. NCB charter schools may offer instruction through virtual, blended, or home-based learning models. These schools often serve high proportions of students with unique learning needs, such as students who are medically fragile, pursuing athletic or artistic careers, or seeking alternatives to traditional settings.
Because NCB schools are not funded automatically based on attendance like classroom-based schools, they must obtain a funding determination from the SBE. This process is based on an evaluation of audited expenditures and is intended to ensure public funds are being used for instructional purposes. However, the process has been widely criticized for its lack of rigor, real-time accountability, and effectiveness in preventing misuse of funds. The integrity of financial reporting in NCB schools plays a critical role in funding eligibility, and, when abused, can be exploited to inflate apportionments and divert public resources.
- The Moratorium on NCB Charter Schools and Broader 2019 Charter School Reforms. In 2019, the Legislature passed AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) and AB 1507 (Smith, Chapter 487, Statutes of 2019), which significantly restructured charter school law. Among other changes, AB 1505 strengthened the criteria for charter authorization and renewal by:
- Allowing authorizers to consider academic and fiscal impact on the district when reviewing petitions.
- Tying renewal decisions to a school’s performance on the California School Dashboard, streamlining renewal for high performers and requiring greater scrutiny for low performers.
- Expanding credentialing requirements to all charter school teachers and applying conflict-of-interest laws to charter boards.
AB 1507 restricted charter schools from operating sites outside their authorizing district’s boundaries.
Together, these bills also enacted a moratorium on new NCB charter schools through January 1, 2026. The pause was intended to give the state time to re-evaluate oversight, funding, and academic accountability in the NCB sector, following concerns about weak controls and inconsistent performance.
This bill builds on this reformed oversight landscape by proposing additional audit, fiscal, and governance tools specific to charter school accountability.
- The A3 Charter Schools Fraud Case. The most significant charter school fraud case in California’s history, the A3 Education scandal, came to light in 2019. Prosecutors alleged that two individuals created a network of 19 NCB charter schools and enrolled tens of thousands of students, many without their knowledge or participation, to fraudulently claim public funding. The scheme involved:
- Inflated and duplicated enrollment using a manipulated “multi-track” calendar.
- Unauthorized use of public funds through related-party contracts.
- A total fraud estimate of over $400 million in misappropriated state funds.
The case revealed multiple breakdowns in the oversight chain—from charter authorizers to external auditors to state agencies—prompting calls for systemic reform.
- Oversight Reports Prompting Legislative Action. In response to the A3 scandal and other fraud incidents, state and independent agencies released two major reports:
- SCO Charter School Audit Task Force Report (2024): Focused on improving the quality of school audits by increasing auditor training, revising the audit guide, establishing certified public accountant review and rotation policies, and ensuring follow-up on audit findings.
- LAO/FCMAT Joint Report on NCB Charter Schools (2024): Analyzed the NCB funding determination process and recommended major changes to better align funding with instructional delivery. Recommendations included real-time enrollment tracking, clearer definitions of instruction, and changes to charter oversight authority.
- State audit of Highlands underscores need for stronger oversight. A June 2025 report by the State Auditor found that Highlands Community Charter improperly claimed over $180 million in K–12 funding, operated with uncredentialed teachers, and engaged in wasteful spending and conflicts of interest. The audit also faulted Twin Rivers Unified School District and state agencies for lax oversight, despite prior warnings. While not every finding directly maps onto this bill’s provisions, the report highlights systemic weaknesses in oversight, transparency, and governance that this bill seeks to address.
- Balancing accountability with support for student-centered choice. This bill has generated substantial public engagement, especially from families who rely on NCB charter schools for educational flexibility. Many of these messages express concern that increased oversight could restrict school choice or reflect a broader opposition to charter schools. These concerns reflect real experiences and deserve to be taken seriously.
At the same time, this bill emerged in response to longstanding oversight concerns and notable fraud cases—not from an effort to limit educational options. In cases like A3 and Highlands, weaknesses in data systems, fiscal reporting, and oversight structures enabled large-scale misuse of public funds. To address these concerns, state agencies developed recommendations aimed at improving transparency, accountability, and operational safeguards in the NCB space.
This bill is built around those recommendations. Many early provisions have been amended or removed in response to stakeholder concerns. The remaining proposals focus on strengthening financial practices, clarifying oversight roles, and ensuring that public funds are used appropriately.
Support for this bill—or for the concepts it puts forward—does not need to signal a position on the broader debate over charter schools. It may simply reflect a belief that clear accountability standards are essential to preserving the innovation and flexibility that many families value in NCB charter programs.
- Targeted reforms in line with oversight recommendations. This bill reflects a coordinated response to the findings of the 2024 LAO/FCMAT review of the NCB funding determination process and the SCO’s Charter School Audit Task Force. Both reports identified systemic vulnerabilities in the oversight of NCB charter schools, particularly related to fiscal accountability, weak audit standards, and insufficient authorizer capacity. This bill seeks to close these gaps through a range of provisions aimed at standardizing audits, clarifying oversight responsibilities, limiting authorizations by small school districts, and increasing transparency in attendance accounting. Unlike early versions of this bill, these reforms are not intended to reduce funding to charter schools or change the instructional models they may offer. Rather, they are focused on ensuring that public funds are spent appropriately and that oversight mechanisms are robust and equitable.
- Improved audit practices and financial accountability. A major theme of both the LAO/FCMAT report and the SCO’s Charter School Audit Task Force findings was the need to modernize and strengthen charter school audits. The A3 case revealed that NCB charter schools were able to hide fraudulent practices due to insufficient audit procedures, lack of auditor training, and the ability to switch auditors if problems were identified. This bill addresses these concerns by aligning charter school audit procedures with those used for school districts, requiring auditors to receive specialized training, and directing the Education Audit Appeals Panel to revise the audit guide to include new areas of review specific to NCB charter schools, such as teacher-pupil ratios and documentation sampling. These changes are intended to ensure that audits are not only more rigorous but also better able to detect misuse of funds and systemic noncompliance.
- Ensuring authorizer accountability as part of a comprehensive oversight system. The most serious charter school fraud cases in California—A3 and Highlands—were perpetrated by school operators who intentionally misused public funds. However, these cases also revealed weaknesses in the oversight infrastructure that allowed misconduct to persist undetected for years. Charter school authorizers play a critical role in ensuring legal compliance and educational quality, but that role varies considerably depending on the size, capacity, and approach of the authorizing district.
In some instances, authorizers lacked sufficient resources or staff expertise to monitor complex NCB programs, especially those serving students far beyond district boundaries. In others, warning signs were missed or under-addressed, despite red flags in audits or financial reports. This bill does not assign blame to authorizers for every instance of misconduct, but it does reflect a broader consensus that oversight obligations must be taken seriously—and that there should be reasonable consequences when they are not.
To that end, this bill strengthens expectations for authorizer monitoring in key risk areas such as attendance accounting, electronic payments, and student-to-teacher ratios. It also seeks to align authorizing capacity with district size and staff infrastructure. While this bill stops short of imposing direct financial penalties on authorizers, the concept of holding authorizers more accountable—such as through potential reimbursement of oversight fees when duties are neglected—has been raised during policy discussions and may merit future consideration. These reforms are ultimately designed not to penalize oversight agencies, but to ensure that the safeguards intended to protect students and taxpayers function as intended.
- Matching authorizer capacity to oversight responsibility. This bill limits the ability of small school districts to authorize NCB charter schools that serve student populations larger than the district itself. Specifically, districts with fewer than 10,000 ADA may authorize NCB charter schools only up to a combined enrollment equal to 100% of their own ADA. Existing NCB charter schools may remain with their current small district authorizer if that authorizer employs at least four executive-level staff. For NCB charter schools that exceed the cap and are authorized by districts without the required staffing capacity, this bill directs the SBE to reassign the charter to a larger authorizer within the county at the time of the school’s next renewal. These changes are intended to better align authorizer oversight capacity with the scale of the schools they oversee.
- Preventing attendance fraud through data modernization and calendar safeguards. One of the most egregious findings in the A3 fraud case was the manipulation of student enrollment and calendars to double- or triple-count attendance for state funding. This was made possible, in part, because California lacks a real-time, student-level system for tracking ADA. Currently, attendance is reported separately from student demographic data in CALPADS, making it difficult to detect duplicate or sequential enrollments across schools. This bill directs CDE to study the feasibility of integrating attendance data into CALPADS by 2030, laying the groundwork for long-term improvements in fraud detection.
- Charter authorizer support and training. In addition to addressing oversight limits, this bill proposes reestablishing a statewide support structure for charter school authorizers, modeled after the now-defunct Charter Authorizers Regional Support Network (CARSNet). The new Charter Authorizer Support Team (CAST), to be administered by FCMAT, would provide training, technical assistance, and tools for small and mid-size districts tasked with overseeing charter schools. The goal is to build authorizer capacity not by defaulting to state-level control but by investing in local expertise. This proposal aligns with SCO’s Charter School Audit Task Force recommendations and has been retained in this bill with support from charter oversight organizations.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Senate Appropriations Committee:
- The California Department of Education (CDE) estimates General Fund costs of $13.5 million each year to establish and staff the Office of Inspector General. This estimates assumes an office size of 45 staff which includes an Inspector General and a Deputy Inspector General, and that the office would leverage existing HR, IT, and legal services within CDE. The CDE estimates additional General Fund costs of $174,000 each year for one position and $750,000 in one-time General Fund to contract for work associated with the feasibility of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and apportionment data systems.
- The Fiscal Crisis and Management Assistance Team (FCMAT) estimates Proposition 98 General Fund costs ranging from $623,000 to $1.043 million each year and two to three positions to establish and operate the Charter Authorizing Technical Assistance Team. The FCMAT estimates additional, one-time Proposition 98 General Fund costs of $100,000 to comply with the bill’s requirement for the CDE, in consultation with FCMAT, to report on the CALPADS and apportionment data systems alignment.
- This State Controller’s Office (SCO) estimates General Fund costs of $1.6 million each year to hire 7.5 additional staff to implement the bill’s provisions regarding independent auditor quality control reviews. These resources would be used to verify mathematical accuracy of additional schedules, certify additional CPA training hours, perform quality control reviews of CPA firms, and additional administrative tasks such as updating the K-12 audit guide.
- This bill could result in additional, unknown Proposition 98 General Fund costs each year for charter schools to comply with the bill’s new audit requirements. Each local educational agency (LEA) contracts with an independent auditing firm to conduct its annual audit to verify compliance with state law. These auditing firms could charge higher fees to LEAs to account for the additional requirements.
- To the extent that the bill’s increased oversight provisions lead to the closure of some NCB charter schools or there is a reduction in educational options (including vendor-based services) that would be available, the transferring of students to traditional public schools or other charter schools could have a local fiscal impact. The extent of these costs is unknown and would vary depending on the type of LEAs involved, the number of students that transfer, and whether those students qualify for supplemental or concentration grant funding under the Local Control Funding Formula (LCFF). The LCFF entitlements or ADA funding for students that transfer within the public school system would typically follow those students, therefore the overall impact to the state would be cost neutral. However, if the students leave the public school system altogether and choose to attend private schools, there could be reduced ADA and LCFF costs for those students.
- The bill’s oversight provisions along with the establishment of the Office of the Inspector General could potentially result in unknown savings for the state to the extent they prevent or deter future fraud and the misuse of public funds.
SUPPORT: (Verified 8/30/25)
California School Employees Association (source)
American Federation of State, County and Municipal Employees
California Democratic Party
California Federation of Labor Unions
California Teachers Association
CFT- a Union of Educators & Classified Professionals
Consumer Federation of California
Democrats of Rossmoor
Los Angeles County Democratic Party
Public Advocates
OPPOSITION: (Verified 8/30/25)
21st Century Alliance
Achieve Charter Schools
Advocates for Faith & Freedom
Alder Grove Charter School
Allegiance Steam Academy
Alliance College-Ready Public Schools
Alliance of Independent Learners
Alma Fuerte Public School
Alpha Public Schools
Alta Public Schools
Altus Schools
America's Finest Charter School
American Heritage Charter Schools
Antelope Valley Economic Development & Growth Enterprise
Antioch Charter Academy
Antioch Charter Academy II
Ararat Charter School
Arts in Action Community Charter Schools
ASA Charter School
Aspen Public Schools
Aspire Public Schools
Association of Personalized Learning Schools & Services
Autism Society Inland Empire
Aveson Schools
Big Picture Educational Academy
Big Sur Charter School
Birmingham Community Charter High School
Bridges Charter School
Bridges Preparatory Academy
Brookfield Engineering Science Technology
Butte County Office of Education
Cabrillo Point Academy
California Homeschool Network
California Association of School Business Officials
California Baptist for Biblical Values
California Catholic Conference
California Charter Schools Association
California County Superintendents
California Creative Learning Academy
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Legislation Take Action
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ARGUMENTS IN SUPPORT: The California School Employees Association (CSEA), sponsor of this bill, supports the bill as a necessary set of reforms aligned with recommendations from the LAO, FCMAT, the SCO’s Charter Audit Task Force, and the California Charter Authorizing Professionals. CSEA argues that California’s existing oversight framework for NCB charter schools has proven inadequate, allowing significant misuse of public funds and governance breakdowns.
CSEA highlights the 2019 A3 Education scandal, in which $400 million in state funds were misappropriated through fraudulent student enrollment schemes and self-dealing contracts. A3 targeted small school districts with limited capacity to serve as authorizers and operated a network of schools under centralized control, using their authority to contract with related entities. CSEA contends that this case illustrates how existing safeguards—audits, authorizer oversight, and the funding determination process—failed to prevent large-scale fraud.
With the NCB charter moratorium set to expire in January 2026, CSEA believes this bill is a timely and measured response. The bill reflects the work of nonpartisan agencies tasked with identifying structural gaps and proposing improvements. In CSEA’s view, the Legislature must act now to close loopholes and ensure that public funding for NCB charter schools is subject to stronger accountability moving forward.
ARGUMENTS IN OPPOSITION: A coalition representing nearly all California charter schools—including APLUS+, the California Charter Schools Association, and the Charter Schools Development Center—opposes this bill. While the coalition supports efforts to prevent fraud, it argues that the bill takes a heavy-handed approach that would impose excessive administrative requirements, divert funds from classrooms, and establish two new state bureaucracies. The coalition instead supports SB 414 (Ashby, 2025), which they view as a more balanced and targeted reform effort aligned with the recommendations of recent oversight reports and better suited to support high-performing charter schools.
Opponents contend that this bill goes well beyond what recent oversight reports recommend and reopens long-settled policy issues without clear justification. They argue that the bill expands audit and authorizer oversight duties without ensuring accountability for authorizers themselves, caps authorizing authority based on district size without supporting data, and imposes costly mandates on schools and state agencies without providing funding. They also raise concerns about provisions such as limits on teacher compensation for meetings, new reporting obligations, and the creation of new oversight agencies, asserting these are not grounded in evidence and would harm effective educational programs.
While acknowledging that discussions with the author’s office and committee staff are ongoing, the coalition believes that this bill is not the right vehicle for reform in its current form. They describe the bill as punitive, costly, and unlikely to achieve its intended outcomes. The coalition reaffirms its support for responsible charter school oversight and expresses appreciation for the committee’s earlier support of SB 414 as a more appropriate path forward.
ASSEMBLY FLOOR: 43-25, 6/5/25
AYES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bains, Bennett, Boerner, Bonta, Bryan, Calderon, Caloza, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Hart, Kalra, Lee, Lowenthal, Muratsuchi, Nguyen, Papan, Patel, Pellerin, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Zbur, Rivas
NOES: Alanis, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Flora, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Irwin, Lackey, Macedo, Pacheco, Patterson, Petrie-Norris, Ramos, Michelle Rodriguez, Blanca Rubio, Sanchez, Ta, Tangipa, Wallis
NO VOTE RECORDED: Bauer-Kahan, Berman, Carrillo, Harabedian, Jackson, Krell, McKinnor, Ortega, Quirk-Silva, Ransom, Wilson
Prepared by: Ian Johnson / ED. / (916) 651-4105
9/2/25 17:49:58
**** END ****
SENATE COMMITTEE ON
Senator Anna Caballero, Chair
2025 - 2026 Regular Session
AB 84 (Muratsuchi) - School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, networks, and contracting: data systems: local educational agency contractor background checks
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
This bill establishes various requirements regarding the oversight and operation of nonclassroom based (NCB) charter schools, including changes to their audit and accounting standards, authorizer responsibilities, the funding determination process, and contracting processes.
*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on August 29, 2025
Fiscal Impact:
- The California Department of Education (CDE) estimates General Fund costs of $13.5 million each year to establish and staff the Office of Inspector General. This estimates assumes an office size of 45 staff which includes an Inspector General and a Deputy Inspector General, and that the office would leverage existing HR, IT, and legal services within CDE. The CDE estimates additional General Fund costs of $174,000 each year for one position and $750,000 in one-time General Fund to contract for work associated with the feasibility of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and apportionment data systems.
- The Fiscal Crisis and Management Assistance Team (FCMAT) estimates Proposition 98 General Fund costs ranging from $623,000 to $1.043 million each year and two to three positions to establish and operate the Charter Authorizing Technical Assistance Team. The FCMAT estimates additional, one-time Proposition 98 General Fund costs of $100,000 to comply with the bill’s requirement for the CDE, in consultation with FCMAT, to report on the CALPADS and apportionment data systems alignment.
- This State Controller’s Office (SCO) estimates General Fund costs of $1.6 million each year to hire 7.5 additional staff to implement the bill’s provisions regarding independent auditor quality control reviews. These resources would be used to verify mathematical accuracy of additional schedules, certify additional CPA training hours, perform quality control reviews of CPA firms, and additional administrative tasks such as updating the K-12 audit guide.
- This bill could result in additional, unknown Proposition 98 General Fund costs each year for charter schools to comply with the bill’s new audit requirements. Each local educational agency (LEA) contracts with an independent auditing firm to conduct its annual audit to verify compliance with state law. These auditing firms could charge higher fees to LEAs to account for the additional requirements.
- To the extent that the bill’s increased oversight provisions lead to the closure of some NCB charter schools or there is a reduction in educational options (including vendor-based services) that would be available, the transferring of students to traditional public schools or other charter schools could have a local fiscal impact. The extent of these costs is unknown and would vary depending on the type of LEAs involved, the number of students that transfer, and whether those students qualify for supplemental or concentration grant funding under the Local Control Funding Formula (LCFF). The LCFF entitlements or ADA funding for students that transfer within the public school system would typically follow those students, therefore the overall impact to the state would be cost neutral. However, if the students leave the public school system altogether and choose to attend private schools, there could be reduced ADA and LCFF costs for those students.
- The bill’s oversight provisions along with the establishment of the Office of the Inspector General could potentially result in unknown savings for the state to the extent they prevent or deter future fraud and the misuse of public funds.
Author Amendments:
Remove the prohibition on enrichment activities, implement numerous contracting provisions, modify auditing provisions, delete liability requirement for financial malfeasance and moratorium on NCB charters, and make other changes, as specified.
-- END --
SENATE COMMITTEE ON
Senator Anna Caballero, Chair
2025 - 2026 Regular Session
AB 84 (Muratsuchi) - School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, networks, and contracting: data systems: local educational agency contractor background checks
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
This bill establishes various requirements regarding the oversight and operation of nonclassroom based (NCB) charter schools, including changes to their audit and accounting standards, authorizer responsibilities, the funding determination process, and contracting processes.
Fiscal Impact:
- The California Department of Education (CDE) estimates General Fund costs of $13.5 million each year to establish and staff the Office of Inspector General. This estimates assumes an office size of 45 staff which includes an Inspector General and a Deputy Inspector General, and that the office would leverage existing HR, IT, and legal services within CDE. The CDE estimates additional General Fund costs of $174,000 each year for one position and $750,000 in one-time General Fund to contract for work associated with the feasibility of integrating the California Longitudinal Pupil Achievement Data System (CALPADS) and apportionment data systems.
- The Fiscal Crisis and Management Assistance Team (FCMAT) estimates Proposition 98 General Fund costs ranging from $623,000 to $1.043 million each year and two to three positions to establish and operate the Charter Authorizing Technical Assistance Team. The FCMAT estimates additional, one-time Proposition 98 General Fund costs of $100,000 to comply with the bill’s requirement for the CDE, in consultation with FCMAT, to report on the CALPADS and apportionment data systems alignment.
- This State Controller’s Office (SCO) estimates General Fund costs of $1.6 million each year to hire 7.5 additional staff to implement the bill’s provisions regarding independent auditor quality control reviews. These resources would be used to verify mathematical accuracy of additional schedules, certify additional CPA training hours, perform quality control reviews of CPA firms, and additional administrative tasks such as updating the K-12 audit guide.
- This bill could result in additional, unknown Proposition 98 General Fund costs each year for charter schools to comply with the bill’s new audit requirements. Each local educational agency (LEA) contracts with an independent auditing firm to conduct its annual audit to verify compliance with state law. These auditing firms could charge higher fees to LEAs to account for the additional requirements.
- To the extent that the bill’s increased oversight provisions lead to the closure of some NCB charter schools or there is a reduction in educational options (including vendor-based services) that would be available, the transferring of students to traditional public schools or other charter schools could have a local fiscal impact. The extent of these costs is unknown and would vary depending on the type of LEAs involved, the number of students that transfer, and whether those students qualify for supplemental or concentration grant funding under the Local Control Funding Formula (LCFF). The LCFF entitlements or ADA funding for students that transfer within the public school system would typically follow those students, therefore the overall impact to the state would be cost neutral. However, if the students leave the public school system altogether and choose to attend private schools, there could be reduced ADA and LCFF costs for those students.
- The bill’s oversight provisions along with the establishment of the Office of the Inspector General could potentially result in unknown savings for the state to the extent they prevent or deter future fraud and the misuse of public funds.
Background:
Existing law establishes the Charter Schools Act of 1992, providing for the establishment of charter schools in California for the purpose, among other things, of improving student learning and expanding learning experiences for pupils who are identified as academically low achieving. The law authorizes anyone to develop, circulate, and submit a petition to establish a charter school, and requires charter developers to collect certain signatures in support of the petition, as specified.
Existing law requires charter schools to submit annual independent financial and compliance audits conducted by certified public accountants. The audit reports shall be submitted to the chartering authority, the county superintendent, the State Controller’s Office (SCO), and the California Department of Education (CDE). Existing law requires financial and compliance audits to follow General Accounting Office standards and the audit guide developed by the Education Audits Appeal Panel (EAAP). The law does not require charter schools to use the Standardized Account Code Structure (SACS), unlike school districts. The SCO is authorized to conduct quality control reviews of audits, but does not require the regular selection of charter school audits for review.
Existing law requires charter schools that offer less than 80% of instructional time on school sites to obtain a funding determination from the State Board of Education (SBE) in order to receive apportionment funding. The SBE is authorized to fund NCB instruction at up to 70% of standard funding unless a higher rate is justified. The law requires the SBE to consider factors such as the charter school’s spending on certificated salaries and benefits, expenditures on schoolsites, and teacher-to-pupil ratios when making a funding determination.
Existing law provides charter schools with greater flexibility than school districts in contracting and generally exempts them from the Public Contract Code (PCC). The law permits charter school contracts to be structured as a percentage of school revenue and does not prohibit contracts with private or religious organizations. It allows charter schools to provide funds or credits to families for educational enrichment activities, even if those activities are not provided by credentialed staff.
Existing law requires charter authorizers to provide general oversight, including annual site visits, fiscal monitoring, and compliance with required reporting, such as the Local Control and Accountability Plan (LCAP). Authorizers may charge up to 1% of a charter school’s revenue for oversight, or up to 3% if the authorizer provides substantially rent-free facilities.
Existing law permits any school district, regardless of size or capacity, to authorize charter schools, including NCB charter schools. It does not impose a statutory cap on the number of charter school pupils a district may authorize in proportion to its own average daily attendance (ADA).
Existing law imposes a moratorium on the authorization of new NCB charter schools until January 1, 2026. However, the law allows existing NCB charter schools to seek renewals or material revisions during the moratorium, under specified conditions.
Proposed Law:
This bill establishes various requirements regarding the oversight and operation of nonclassroom based (NCB) charter schools. Notable provisions of the bill include:
- The alignment of charter school audits with those of school districts, including audit timelines, procedures, and the use of SACS. Requires school auditors to complete targeted training. Delays implementation of these requirements to 2027-28.
- Directs updates to the audit guide and compliance procedures to include charter-specific content, as specified, and requires the SCO to conduct more frequent quality control reviews of auditors.
- Establishes an Office of the Inspector General under the SBE to investigate charter-related financial misconduct.
- Retains the existing SBE funding determination process for NCB charter schools, but adds new transparency requirements, as specified. Clarifies that NCB charter schools within the same network must apply for funding determinations in the same year. Delays the implementation of the codified funding determination process until 2027–28.
- Provide the SBE discretionary authority to consider mitigating circumstances when a charter school does not otherwise qualify for 100% funding.
- Prohibits charter schools from contracting with private religious organizations or schools.
- Prohibits contracts structured as a percentage of school revenue.
- Prohibits charter schools from offering funds or credits for enrichment activities not provided by credentialed employees.
- Prohibits employee bonuses or compensation tied to student attendance or course completion.
- Reestablishes a statewide Charter Authorizer Technical Assistance team at FCMAT.
- Requires authorizers to provide enhanced oversight in key compliance areas, as specified, including attendance accounting and enrollment, student-teacher ratios, and classroom-based instructional minutes.
- Requires CDE to study the feasibility of integrating CALPADS with the state’s ADA funding system to detect duplicate or excessive attendance claims.
- Caps authorizing capacity for districts with fewer than 10,000 ADA to no more than 100% of their own ADA in authorized NCB charter enrollment.
- Allows existing NCB charters to remain with a small-district authorizer if the district has at least four full-time executive-level staff. Requires the SBE to reassign NCB charters that exceed this threshold to a larger authorizer within the county upon renewal.
- Lifts the statutory moratorium on the approval of new NCB charter schools as of December 31, 2025.
Related Legislation:
SB 414 (Ashby, 2025) would make a broad set of changes to charter school law related to audit procedures, financial oversight, governance, and funding determinations. The bill is currently pending in the Assembly Appropriations Committee.
SB 1477 (Ashby, 2024) would have required the governing board of a charter school to review the annual audit of the charter school for the prior fiscal year; require auditors of NCB charter schools to perform specified activities; and require all LEAs to only enter into an agreement for educational enrichment activities with a vendor that is vetted and approved. This bill was held in the Assembly Education Committee.
AB 1316 (O’Donnell, 2021) would have established new requirements for NCB charter schools, including provisions regarding auditing and accounting standards, the funding determination process, and the contracting process. This bill was held on the Assembly Floor.
AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) makes various changes to the criteria for charter school authorization and renewal and also established a two-year moratorium on the establishment of NCB charter schools until January 1, 2022.
AB 1507 (Smith, Chapter 487, Statutes of 2019) prohibits charter schools from being located outside the boundaries of their authorizers.
Staff Comments:
In 2019, the Legislature passed AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) which among other things, enacted a moratorium on new NCB charter schools through January 1, 2026. The pause was intended to give the state time to re-evaluate oversight, funding, and academic accountability in the NCB sector, following concerns about weak controls and inconsistent performance. This bill proposes additional oversight reforms for NCB charter schools, mainly due to longstanding oversight concerns that were highlighted in recent cases of fraud and the misuse of public funds involving charter schools. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
“One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
“Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
-- END --
SENATE COMMITTEE ON EDUCATION
Senator Sasha Renée Pérez, Chair
2025 - 2026 Regular
Bill No: AB 84 Hearing Date: July 16, 2025
Author: | Muratsuchi | ||
Version: | July 8, 2025 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Ian Johnson | ||
Subject: School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, networks, and contracting: data systems: local educational agency contractor background checks.
SUMMARY
This bill makes a series of changes to the oversight and operation of nonclassroom-based (NCB) charter schools. Specifically, it: (1) increases audit requirements and authorizer responsibilities; (2) revises the funding determination process to include additional financial reporting and a review of charter networks; (3) imposes restrictions on certain contracting practices and the use of academic enrichment funds; and (4) places new limits on the ability of small school districts to authorize NCB charter schools that serve student populations larger than their own.
BACKGROUND
Existing law:
Audit & Accounting Standards
- Requires charter schools to submit annual independent financial and compliance audits conducted by certified public accountants.
- Requires that audit reports be submitted to the chartering authority, the county superintendent, the State Controller’s Office (SCO), and the California Department of Education (CDE).
- Requires financial and compliance audits to follow General Accounting Office standards and the audit guide developed by the Education Audits Appeal Panel (EAAP), once adopted.
- Does not require charter schools to use the Standardized Account Code Structure (SACS), unlike school districts.
- Authorizes the SCO to conduct quality control reviews of audits, but does not require regular selection of charter school audits for review.
Funding Determination
- Requires charter schools that offer less than 80% of instructional time on school sites to obtain a funding determination from the State Board of Education (SBE) in order to receive apportionment funding.
- Authorizes the SBE to fund NCB instruction at up to 70% of standard funding unless a higher rate is justified.
- Requires the SBE to consider factors such as the charter school’s spending on certificated salaries and benefits, expenditures on schoolsites, and teacher-to-pupil ratios when making a funding determination.
- Does not require charter schools that are part of a network to apply jointly for a funding determination, nor does it require them to submit updated financial documentation between determination years.
School Contractors & Use of Funds
- Grants charter schools greater flexibility than school districts in contracting and generally exempts them from the Public Contract Code (PCC).
- Permits charter school contracts to be structured as a percentage of school revenue and does not prohibit contracts with private or religious organizations.
- Allows charter schools to provide funds or credits to families for educational enrichment activities, even if those activities are not provided by credentialed staff.
- Imposes no statutory restriction on charter school employee compensation based on student attendance or course completion.
Authorizer Oversight & Oversight Fees
- Requires charter authorizers to provide general oversight, including annual site visits, fiscal monitoring, and compliance with required reporting, such as the Local Control and Accountability Plan (LCAP).
- Authorizes authorizers to charge up to 1% of a charter school’s revenue for oversight, or up to 3% if the authorizer provides substantially rent-free facilities.
- Previously supported a Charter School Authorizer Technical Assistance Team at Fiscal Crisis and Management Assistance Team (FCMAT), but that team was defunded in 2020 and no longer operates.
- Results in wide variation in the quality and depth of authorizer oversight, particularly among small school districts with limited capacity.
Student Attendance Data Reform
- Requires California Longitudinal Pupil Achievement Data System (CALPADS) to collect student demographic and achievement data, but this system is not integrated with the state’s attendance-based funding system.
- Requires charter schools to report attendance data separately to CDE, which can allow for duplicative or inflated attendance reporting.
District Authorizers
- Permits any school district, regardless of size or capacity, to authorize charter schools, including NCB charter schools.
- Does not impose a statutory cap on the number of charter school pupils a district may authorize in proportion to its own average daily attendance (ADA).
- Does not authorize or require the reassignment of charter schools to larger or more capable authorizers upon renewal.
Independent Study (IS) & Course-Based Independent Study (CBIS)
- Authorizes local educational agencies (LEAs), including charter schools, to offer IS and CBIS programs under specific requirements related to credentialed supervision, content rigor, and written learning agreements.
- Prohibits pupils with an Individualized Education Plan (IEP) from participating in IS unless their IEP explicitly allows it.
- Imposes a funding penalty for CBIS if more than 10% of an LEA’s total ADA is generated through CBIS, unless the LEA qualifies for an exemption.
NCB Moratorium
- Imposes a moratorium on the authorization of new NCB charter schools until January 1, 2026.
- Allows existing NCB charter schools to seek renewals or material revisions during the moratorium, under specified conditions.
ANALYSIS
This bill:
Audit and Accounting Standards
- Aligns charter school audits with those of school districts, including audit timelines, procedures, and use of the SACS.
- Requires school auditors to complete targeted training.
- Directs updates to the audit guide and compliance procedures to include charter-specific content, including sampling methodology, attendance by track and month, material related-party transactions, classroom-based instructional minutes, student-teacher ratios, funding determination, large monetary transfers, electronic payments, and charter oversight practices.
- Requires the SCO to conduct more frequent quality control reviews of auditors.
- Establishes an Office of the Inspector General under the SBE to investigate charter-related financial misconduct.
Funding Determination
- Retains the existing SBE funding determination process for NCB charter schools, but adds new transparency requirements, including:
- Requiring charter schools within the same network to apply jointly.
- Requiring submission of financial documents to CDE in non-determination years.
- Including the current expense of education in the funding determination review.
- Codifying mitigating factors such as reserves, one-time funds, and facilities spending.
School Contractors & Use of Funds
- Prohibits charter schools from contracting with private religious organizations or schools.
- Prohibits contracts structured as a percentage of school revenue.
- Prohibits charter schools from offering funds or credits for enrichment activities not provided by credentialed employees.
- Prohibits employee bonuses or compensation tied to student attendance or course completion.
Authorizer Oversight and Technical Assistance
- Reestablishes a statewide Charter Authorizer Technical Assistance team at FCMAT.
- Requires authorizers to provide enhanced oversight in key compliance areas, including:
- Attendance accounting and enrollment.
- Student-teacher ratios.
- Classroom-based instructional minutes.
- Audit compliance monitoring.
- Credit card and electronic expenditures.
Student Attendance Data Reform
- Requires CDE to study the feasibility of integrating CALPADS with the state’s ADA funding system to detect duplicate or excessive attendance claims.
District Authorizer Capacity
- Caps authorizing capacity for districts with fewer than 10,000 ADA to no more than 100% of their own ADA in authorized NCB charter enrollment.
- Allows existing NCB charters to remain with a small-district authorizer if the district has at least four full-time executive-level staff.
- Requires the SBE to reassign NCB charters that exceed this threshold to a larger authorizer within the county upon renewal.
NCB Moratorium
- Lifts the statutory moratorium on the approval of new NCB charter schools as of December 31, 2025.
STAFF COMMENTS
- Need for the bill. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
“One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
“Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
- Background on Charter Schools. Charter schools are public schools that operate under the terms of a charter agreement approved by a school district, county office of education, or the SBE. Established by the Charter Schools Act of 1992, they were intended to increase learning opportunities for all students, especially those who are academically low-achieving, and to promote innovation, site-based decision-making, and performance-based accountability.
Today, charter schools serve over 700,000 students in California. They are publicly funded and tuition-free but operate with greater flexibility in exchange for accountability for results. Charter schools may be operated by nonprofit organizations or, in some cases, by charter management organizations (CMOs) that oversee multiple schools. While most charter schools operate classroom-based programs similar to traditional schools, a significant share operate in a NCB model.
- What Are NCB Charter Schools? A charter school is considered NCB if less than 80% of its instructional time occurs under the immediate supervision of a credentialed teacher in a classroom setting. NCB charter schools may offer instruction through virtual, blended, or home-based learning models. These schools often serve high proportions of students with unique learning needs, such as students who are medically fragile, pursuing athletic or artistic careers, or seeking alternatives to traditional settings.
Because NCB schools are not funded automatically based on attendance like classroom-based schools, they must obtain a funding determination from the SBE. This process is based on an evaluation of audited expenditures and is intended to ensure public funds are being used for instructional purposes. However, the process has been widely criticized for its lack of rigor, real-time accountability, and effectiveness in preventing misuse of funds. The integrity of financial reporting in NCB schools plays a critical role in funding eligibility, and, when abused, can be exploited to inflate apportionments and divert public resources.
- The Moratorium on NCB Charter Schools and Broader 2019 Charter School Reforms. In 2019, the Legislature passed AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) and AB 1507 (Smith, Chapter 487, Statutes of 2019), which significantly restructured charter school law. Among other changes, AB 1505 strengthened the criteria for charter authorization and renewal by:
- Allowing authorizers to consider academic and fiscal impact on the district when reviewing petitions.
- Tying renewal decisions to a school’s performance on the California School Dashboard, streamlining renewal for high performers and requiring greater scrutiny for low performers.
- Expanding credentialing requirements to all charter school teachers and applying conflict-of-interest laws to charter boards.
AB 1507 restricted charter schools from operating sites outside their authorizing district’s boundaries.
Together, these bills also enacted a moratorium on new NCB charter schools through January 1, 2026. The pause was intended to give the state time to re-evaluate oversight, funding, and academic accountability in the NCB sector, following concerns about weak controls and inconsistent performance.
This bill builds on this reformed oversight landscape by proposing additional audit, fiscal, and governance tools specific to charter school accountability.
- The A3 Charter Schools Fraud Case. The most significant charter school fraud case in California’s history, the A3 Education scandal, came to light in 2019. Prosecutors alleged that two individuals created a network of 19 NCB charter schools and enrolled tens of thousands of students, many without their knowledge or participation, to fraudulently claim public funding. The scheme involved:
- Inflated and duplicated enrollment using a manipulated “multi-track” calendar.
- Unauthorized use of public funds through related-party contracts.
- A total fraud estimate of over $400 million in misappropriated state funds.
The case revealed multiple breakdowns in the oversight chain—from charter authorizers to external auditors to state agencies—prompting calls for systemic reform.
- Oversight Reports Prompting Legislative Action. In response to the A3 scandal and other fraud incidents, state and independent agencies released two major reports:
- SCO Charter School Audit Task Force Report (2024): Focused on improving the quality of school audits by increasing auditor training, revising the audit guide, establishing certified public accountant review and rotation policies, and ensuring follow-up on audit findings.
- LAO/FCMAT Joint Report on NCB Charter Schools (2024): Analyzed the NCB funding determination process and recommended major changes to better align funding with instructional delivery. Recommendations included real-time enrollment tracking, clearer definitions of instruction, and changes to charter oversight authority.
- State audit of Highlands underscores need for stronger oversight. A June 2025 report by the State Auditor found that Highlands Community Charter improperly claimed over $180 million in K–12 funding, operated with uncredentialed teachers, and engaged in wasteful spending and conflicts of interest. The audit also faulted Twin Rivers Unified School District and state agencies for lax oversight, despite prior warnings. While not every finding directly maps onto this bill’s provisions, the report highlights systemic weaknesses in oversight, transparency, and governance that this bill seeks to address.
- Response to stakeholder concerns. Since its introduction, this bill has been substantially amended to address concerns raised by charter school advocates regarding the scope and impact of certain provisions. In particular, earlier versions of the bill proposed significant changes to the funding determination process that would have reduced apportionments for charter schools offering limited in-person instruction. Opponents argued these changes could have resulted in funding reductions of up to 30% for some schools. Those provisions have been removed. The bill now retains the existing structure for funding determinations, while adding new financial documentation requirements and clarifying certain criteria to improve transparency.
The bill also previously included a proposal to increase the maximum oversight fee from 1% to 3% of a charter school’s revenue. That provision has been removed, and the bill does not modify existing oversight fee limits.
In addition, several other provisions that generated concern have been removed from the bill, including:
- A prohibition on employees entering into service contracts that exceed PCC limits.
- A requirement for charter schools to be monitored under the Williams textbook sufficiency process.
- A proposal to subject charter school contracting to public bidding requirements under the PCC.
- Language allowing school districts emerging from state receivership to deny charter petitions based on fiscal impact.
- A requirement for governing boards to approve all contracts, now narrowed to those totaling more than $100,000.
- New credentialing requirements for certain charter school employees.
These amendments reflect ongoing negotiations between the author’s office, the bill’s sponsors, and representatives of the charter school community. While not all stakeholders are participating in these discussions, and many continue to oppose the bill, the author has worked to narrow the bill’s scope and revise provisions to minimize operational disruption while advancing goals related to fiscal accountability, oversight capacity, and transparency.
- Balancing accountability with support for student-centered choice. This bill has generated substantial public engagement, especially from families who rely on NCB charter schools for educational flexibility. Many of these messages express concern that increased oversight could restrict school choice or reflect a broader opposition to charter schools. These concerns reflect real experiences and deserve to be taken seriously.
At the same time, this bill emerged in response to longstanding oversight concerns and notable fraud cases—not from an effort to limit educational options. In cases like A3 and Highlands, weaknesses in data systems, fiscal reporting, and oversight structures enabled large-scale misuse of public funds. To address these concerns, state agencies developed recommendations aimed at improving transparency, accountability, and operational safeguards in the NCB space.
This bill is built around those recommendations. Many early provisions have been amended or removed in response to stakeholder concerns. The remaining proposals focus on strengthening financial practices, clarifying oversight roles, and ensuring that public funds are used appropriately.
Support for this bill—or for the concepts it puts forward—does not need to signal a position on the broader debate over charter schools. It may simply reflect a belief that clear accountability standards are essential to preserving the innovation and flexibility that many families value in NCB charter programs.
- Targeted reforms in line with oversight recommendations. This bill reflects a coordinated response to the findings of the 2024 LAO/FCMAT review of the NCB funding determination process and the SCO’s Charter School Audit Task Force. Both reports identified systemic vulnerabilities in the oversight of NCB charter schools, particularly related to fiscal accountability, weak audit standards, and insufficient authorizer capacity. The bill seeks to close these gaps through a range of provisions aimed at standardizing audits, clarifying oversight responsibilities, limiting authorizations by small school districts, and increasing transparency in attendance accounting. Unlike early versions of the bill, these reforms are not intended to reduce funding to charter schools or change the instructional models they may offer. Rather, they are focused on ensuring that public funds are spent appropriately and that oversight mechanisms are robust and equitable.
- Improved audit practices and financial accountability. A major theme of both the LAO/FCMAT report and the SCO’s Charter School Audit Task Force findings was the need to modernize and strengthen charter school audits. The A3 case revealed that NCB charter schools were able to hide fraudulent practices due to insufficient audit procedures, lack of auditor training, and the ability to switch auditors if problems were identified. The bill addresses these concerns by aligning charter school audit procedures with those used for school districts, requiring auditors to receive specialized training, and directing the Education Audit Appeals Panel to revise the audit guide to include new areas of review specific to NCB charter schools, such as teacher-pupil ratios and documentation sampling. These changes are intended to ensure that audits are not only more rigorous but also better able to detect misuse of funds and systemic noncompliance.
- Ensuring authorizer accountability as part of a comprehensive oversight system. The most serious charter school fraud cases in California—A3 and Highlands—were perpetrated by school operators who intentionally misused public funds. However, these cases also revealed weaknesses in the oversight infrastructure that allowed misconduct to persist undetected for years. Charter school authorizers play a critical role in ensuring legal compliance and educational quality, but that role varies considerably depending on the size, capacity, and approach of the authorizing district.
In some instances, authorizers lacked sufficient resources or staff expertise to monitor complex NCB programs, especially those serving students far beyond district boundaries. In others, warning signs were missed or under-addressed, despite red flags in audits or financial reports. This bill does not assign blame to authorizers for every instance of misconduct, but it does reflect a broader consensus that oversight obligations must be taken seriously—and that there should be reasonable consequences when they are not.
To that end, the bill strengthens expectations for authorizer monitoring in key risk areas such as attendance accounting, electronic payments, and student-to-teacher ratios. It also seeks to align authorizing capacity with district size and staff infrastructure. While the bill stops short of imposing direct financial penalties on authorizers, the concept of holding authorizers more accountable—such as through potential reimbursement of oversight fees when duties are neglected—has been raised during policy discussions and may merit future consideration. These reforms are ultimately designed not to penalize oversight agencies, but to ensure that the safeguards intended to protect students and taxpayers function as intended.
- Matching authorizer capacity to oversight responsibility. This bill limits the ability of small school districts to authorize NCB charter schools that serve student populations larger than the district itself. Specifically, districts with fewer than 10,000 ADA may authorize NCB charter schools only up to a combined enrollment equal to 100% of their own ADA. Existing NCB charter schools may remain with their current small district authorizer if that authorizer employs at least four executive-level staff. For NCB charter schools that exceed the cap and are authorized by districts without the required staffing capacity, the bill directs the SBE to reassign the charter to a larger authorizer within the county at the time of the school’s next renewal. These changes are intended to better align authorizer oversight capacity with the scale of the schools they oversee.
- Preventing attendance fraud through data modernization and calendar safeguards. One of the most egregious findings in the A3 fraud case was the manipulation of student enrollment and calendars to double- or triple-count attendance for state funding. This was made possible, in part, because California lacks a real-time, student-level system for tracking ADA. Currently, attendance is reported separately from student demographic data in CALPADS, making it difficult to detect duplicate or sequential enrollments across schools. This bill directs CDE to study the feasibility of integrating attendance data into CALPADS by 2030, laying the groundwork for long-term improvements in fraud detection.
- Charter authorizer support and training. In addition to addressing oversight limits, the bill proposes reestablishing a statewide support structure for charter school authorizers, modeled after the now-defunct Charter Authorizers Regional Support Network (CARSNet). The new Charter Authorizer Support Team (CAST), to be administered by FCMAT, would provide training, technical assistance, and tools for small and mid-size districts tasked with overseeing charter schools. The goal is to build authorizer capacity not by defaulting to state-level control but by investing in local expertise. This proposal aligns with SCO’s Charter School Audit Task Force recommendations and has been retained in the bill with support from charter oversight organizations.
- Use of instructional funds for vendor-based enrichment. This bill prohibits all LEAs, including NCB charter schools, from allocating or advertising the availability of funds or credits to be spent at the discretion of a pupil’s parent, guardian, or education rights holder on educational enrichment activities that are not provided by a credentialed employee of the agency and that are paid for by the agency. This provision is not based on any specific recommendation from the LAO/FCMAT or SCO reports. However, it appears to reflect broader concerns that emerged during investigations into misuse of public funds in the NCB sector—particularly the blurred lines between instructional expenditures and private consumer choices.
Supporters of this provision argue that public school dollars should not be used as flexible spending accounts for parents, especially when those dollars are sometimes paying for extracurriculars like martial arts, horseback riding, or sewing that—while enriching—are not typically part of a standards-aligned instructional program. They also point to the rise of marketing materials prominently advertising academic funds as a recruitment tool, raising concerns about whether such practices incentivize privatization of public education and encourage families to pressure schools to fund activities that may be peripheral to academic progress. In this view, the provision helps ensure that credentialed educators—not parents or vendors—retain responsibility for shaping students’ educational experiences and aligning expenditures with state goals.
Critics of this provision counter that many vendor-based services are educationally meaningful and fill real access gaps—particularly in rural areas or for students with unique needs. They note that in many NCB programs, credentialed teachers already work closely with families to ensure that all instructional spending is aligned to a student’s learning plan, subject to multiple layers of school oversight. From this perspective, the bill’s language could eliminate not just outlier abuses but also thoughtful, compliant practices that have helped students thrive in alternative learning environments.
This provision raises a fundamental policy tension between preserving educational flexibility and ensuring public accountability. Whether it strikes the right balance between the two remains a point of active debate.
- Arguments in support. The California School Employees Association (CSEA), sponsor of AB 84, supports the bill as a necessary set of reforms aligned with recommendations from the LAO, FCMAT, the SCO’s Charter Audit Task Force, and the California Charter Authorizing Professionals. CSEA argues that California’s existing oversight framework for NCB charter schools has proven inadequate, allowing significant misuse of public funds and governance breakdowns.
CSEA highlights the 2019 A3 Education scandal, in which $400 million in state funds were misappropriated through fraudulent student enrollment schemes and self-dealing contracts. A3 targeted small school districts with limited capacity to serve as authorizers and operated a network of schools under centralized control, using their authority to contract with related entities. CSEA contends that this case illustrates how existing safeguards—audits, authorizer oversight, and the funding determination process—failed to prevent large-scale fraud.
With the NCB charter moratorium set to expire in January 2026, CSEA believes AB 84 is a timely and measured response. The bill reflects the work of nonpartisan agencies tasked with identifying structural gaps and proposing improvements. In CSEA’s view, the Legislature must act now to close loopholes and ensure that public funding for NCB charter schools is subject to stronger accountability moving forward.
- Arguments in opposition. A coalition representing nearly all California charter schools—including APLUS+, the California Charter Schools Association, and the Charter Schools Development Center—opposes AB 84. While the coalition supports efforts to prevent fraud, it argues that the bill takes a heavy-handed approach that would impose excessive administrative requirements, divert funds from classrooms, and establish two new state bureaucracies. The coalition instead supports SB 414 (Ashby, 2025), which they view as a more balanced and targeted reform effort aligned with the recommendations of recent oversight reports and better suited to support high-performing charter schools.
Opponents contend that AB 84 goes well beyond what recent oversight reports recommend and reopens long-settled policy issues without clear justification. They argue that the bill expands audit and authorizer oversight duties without ensuring accountability for authorizers themselves, caps authorizing authority based on district size without supporting data, and imposes costly mandates on schools and state agencies without providing funding. They also raise concerns about provisions such as limits on teacher compensation for meetings, new reporting obligations, and the creation of new oversight agencies, asserting these are not grounded in evidence and would harm effective educational programs.
While acknowledging that discussions with the author’s office and committee staff are ongoing, the coalition believes that AB 84 is not the right vehicle for reform in its current form. They describe the bill as punitive, costly, and unlikely to achieve its intended outcomes. The coalition reaffirms its support for responsible charter school oversight and expresses appreciation for the committee’s earlier support of SB 414 as a more appropriate path forward.
- Committee amendments and ongoing negotiations. In preparation for this hearing, committee staff has engaged extensively in negotiations with the author’s office, the bill’s sponsors, and charter school representatives, including opponents of the bill. These discussions have resulted in a set of committee amendments that reflect meaningful compromises across several policy areas. These include:
Funding Determination Process
- Clarify that NCB charter schools within the same network must apply for funding determinations in the same year; in turn, strike the requirement that data from schools within the same network be aggregated as part of the funding determination process.
- Clarify that the definition of “virtual charter school” is for purposes of data collection in CALPADS.
- Strike the provision lowering the in-person instruction threshold from 80% to 75% for purposes of defining an NCB charter school and triggering the funding determination requirement.
- Delay the implementation of the codified funding determination process from 2026-27 to 2027–28.
- Clarify the specific financial documentation (e.g., pupil-to-teacher ratio, certificated salaries and benefits) that NCB charter schools must annually provide to CDE in connection with their funding determination.
- Establish a three-year funding determination period for NCB charter schools that are part of a network instead of an annual funding determination.
- Provide the SBE discretionary authority to consider mitigating circumstances when a charter school does not otherwise qualify for 100% funding.
- Exclude from revenue, for funding determination purposes, reserve transfers of up to 5% of a charter school’s total revenue or the amount needed to bring reserves to 10% of total annual expenditures, whichever is smaller.
- Refine the definition of a “network of NCB charter schools” to emphasize shared governance and common corporate control, while removing criteria based on shared teachers or large common vendor contracts.
Audit and Oversight
- Delay the implementation of new audit guide requirements from 2026-27 to 2027-28.
- Delay the implementation of the auditor training requirement from 2026–27 to 2027-28.
- Eliminate the requirement to include specific audit schedules on pupil-to-teacher ratio, certificated staff salaries and benefits, and instruction/services expenditures.
Technical and Clarifying Changes
- Include numerous other minor edits for clarity and implementation without changing substantive policy.
These committee amendments are not intended to reflect a final agreement between all parties, and several provisions remain the subject of disagreement. However, they represent a meaningful step forward in the negotiation process and are being requested by the Committee as a demonstration of good faith and continued progress.
Discussions will continue beyond this hearing, not only to refine the provisions addressed in these amendments but also to work through the many other policy areas this bill touches related to the oversight, operation, and funding of NCB charter schools. The Committee’s engagement at this stage plays an important role in shaping a more balanced and enforceable framework—one that strengthens accountability while preserving access to high-quality NCB programs.
- Related legislation.
SB 719 (Cabaldon, 2025) would enact a series of audit reform measures for school districts, county offices of education, and charter schools. This bill is currently pending in the Senate Business, Professions and Economic Development Committee.
SB 414 (Ashby, 2025) would make a broad set of changes to charter school law related to audit procedures, financial oversight, governance, and funding determinations. The bill is currently pending in the Assembly Education Committee.
SB 1477 (Ashby, 2024) would have required the governing board of a charter school to review, at a public meeting, the annual audit of the charter school for the prior fiscal year; require auditors of NCB charter schools to perform specified activities; and require all LEAs to only enter into an agreement for educational enrichment activities with a vendor that is vetted and approved pursuant to specified criteria. This bill was held in the Assembly Education Committee.
AB 1316 (O’Donnell, 2021) would have established new requirements for NCB charter schools in the areas of auditing and accounting standards, the funding determination process, adding requirements to the contracting process, IS program requirements, required teacher to pupil ratios, limiting authorization of NCB charters by small districts, and the authorizer oversight process. This bill was held on the Assembly Floor.
SB 593 (Glazer, 2021) would have required FCMAT to offer auditors of NCB charter schools training on the review of charter school financial documents, require the governing board of a charter school to annually review the audit of the charter school, and create new IS study requirements. This bill was held in the Assembly Education Committee.
AB 2990 (C. Garcia, 2020) would have placed several new restrictions on educational enrichment activities at NCB charter schools. This bill was held on the Assembly Floor.
AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) established a two year moratorium on the establishment of NCB charter schools until January 1, 2022.
AB 1507 (Smith, Chapter 487, Statutes of 2019) prohibits charter schools from being located outside the boundaries of their authorizer and, authorizes NCB charter schools to establish one resource center within the jurisdiction of the school district where the charter school is located.
SUPPORT
American Federation of State, County and Municipal Employees
California Federation of Labor Unions
California School Employees Association
California Teachers Association
Los Angeles County Democratic Party
Public Advocates
OPPOSITION
21st Century Alliance
Achieve Charter Schools
Alder Grove Charter School
Allegiance Steam Academy
Alliance College-Ready Public Schools
Alliance of Independent Learners
Alma Fuerte Public School
Alpha Public Schools
Alta Public Schools
Altus Schools
America’s Finest Charter School
American Heritage Charter Schools
Antioch Charter Academy
Antioch Charter Academy II
Ararat Charter School
Arts in Action Community Charter Schools
ASA Charter School
Aspen Public Schools
Aspire Public Schools
Association of Personalized Learning Schools & Services
Aveson Schools
Big Picture Educational Academy
Big Sur Charter School
Birmingham Community Charter High School
Bridges Charter School
Bridges Preparatory Academy
Brookfield Engineering Science Technology
Butte County Office of Education
Cabrillo Point Academy
California Homeschool Network
California Association of School Business Officials
California Baptist for Biblical Values
California Catholic Conference
California Charter Schools Association
California County Superintendents
California Creative Learning Academy
California Montessori Project
California Online Public School
California Pacific Charter Schools
California Parents for Public Virtual Education
California Policy Center
California Republic Leadership Academy
California Virtual Academies
Camarillo Academy of Progressive Education
Camino Nuevo Charter Academy
Champs Charter High School of the Arts
Charter Schools Development Center
Children’s Community Charter School
Chime Institute
Choices Charter School
City of Huntington Beach
Clarksville Charter School
Coastal Grove Charter School
College Prep Genius
Community Learning Center Schools
CORE a Community Collaboration
CORE Butte Charter School
CORE Charter School
County of Sonoma
Creative Cultivation Studio
Creative Learners of California
Creative Learning Place
Crossroads Charter Academy
CWC Los Angeles
Da Vinci Schools
Delta Managed Solutions
Desert Trails Preparatory Academy
Discovery Charter Schools
Dixon Montessori Charter School
Dr. Lewis Dolphin Stallworth Charter School
Dual Language Immersion North County
Edison Bethune Charter Academy
Ednovate
Education for Change Public Schools
Eel River Charter School
El Sol Science and Arts Academy
Element Education
Elevate School
Environmental Charter Schools
Epic Charter School
Equitas Academy Charter Schools
Excel Academy Charter School
Extera Public Schools
Family Partnership Charter School
Feaster (Mae L.) Charter School
Feather River Charter School
Fenton Charter Public Schools
Foothill Learning Academy
Forest Charter School
Forest Ranch Charter
Freedom Angels
Fresno Innovative Charter Schools
Gabriella Charter Schools
Gateway College and Career Academy
Gateway Community Charters
Girls Athletic Leadership Schools Los Angeles
Glacier High School Charter
Golden Eagle Charter School
Golden Valley Charter School
Gorman Learning Charter Network
Granada Hills Charter
Granite Mountain Charter School
Great Valley Academy
Green DOT Public Schools
Griffin Technology Academies
Growth Public Schools
Guajome Schools
Hawking Steam Charter School
Heartwood Charter School
Hemet Christian Homeschool Moms
High Tech Los Angeles
History Rocks!
Home Haven Collective
Hometech Charter School
Howard Gardner Community School
ICEF Public Schools
iLEAD
iLEAD CA Charters 1
iLEAD California
Ingenium Schools
Innovations Academy
Innovative Education Management
Inspire School of Arts and Sciences
Intellectual Virtues Academy High
Invictus Leadership Academy
Irvine International Academy
Ivy Academia
JCS Family of Charter Schools
John Muir Charter Schools
Journey School
Kairos Public Schools
Kavod Charter School
Kepler Neighborhood School
Kid Street Charter School
Kidinnu Academy
KIPP Public Schools Northern California
Larchmont Charter School
Lashon Academy
Learn4life
Learning for Life Charter School
Legislation Take Action
Leonardo Da Vinci Health Sciences Charter School
Lighthouse Baptist Church
Literacy First Charter Schools
Little Explorers Homeschool Co-Op
Live Online Math
Los Angeles Academy of Arts and Enterprise
Magnolia Public Schools
Maria Montessori Charter Academy
Matrix for Success Academy
Mayacamas Countywide Middle School
Meadows Arts and Technology Elementary School
Method Schools
Mission Vista Academy
Montague Charter Academy
Motivated Youth Academy
Mountain Home School Charter
Multicultural Learning Center
Museum School Collaborative
Natomas Charter School
Natomas Homeschool Alliance
Natomas USD for Freedom
Navigator Schools
New Heights Charter School
New West Charter
Nord Country School
Northern United Charter Schools
Northwest Prep Charter School
Nova Academy Early College High School
Ocean Charter School
Odyssey Charter Schools
Olive Grove Charter School
Orange County Academy of Sciences and Arts
Orange County School of the Arts / California School of the Arts Foundation
Pacific Charter Institute
Pacific View Charter School
Pacoima Charter School
Para Los Ninos
Pasadena Rosebud Academy Charter School
Pazlo Education Foundation
PCA College View
Peabody Charter School
Peninsula Parents for Personalized Education
Plumas Charter School
Port of Los Angeles High School
Pseudogenius Learning Labs
Puente Learning Center
Real Impact.
Redwood Coast Montessori
Redwood Collegiate Academy
Renaissance Arts Academy
Revillage Napa Homeschoolers
Rex and Margaret Fortune School of Education
River Montessori Charter School
River Oaks Academy Charter School
River Springs Charter School
Rocklin Academy Family of Schools
Sage Oak Charter Schools
San Carlos Charter
San Diego Virtual School
San Jose Conservation Corps & Charter School
Santa Rosa Academy Parents
Santa Rosa French-American Charter School
Save Glendora Schools
Save Our Schools Coalition
Scale Leadership Academy
Scholarship Prep Charter School
Sebastopol Independent Charter
Sequoia Career Academy
Shade Canyon School
Shasta Charter Academy
Shasta View Academy
Sherman Thomas Charter School
Sherwood Montessori
Small School Districts Association
Soar Charter Academy
Southwest California Legislative Council
Sparrow Academy
Stand Up Sacramento County
Stellar Charter School
Stem Prep Schools
Stride
Success One! Charter
Summit Enrichment Academy
Summit Public Schools
Suncoast Charter
Suncoast Prep Academy
Supporting True Options in Public Education Coalition
Sycamore Creek Community Charter School
Synergy Academies
Taylion High Desert Academy
Teach Public Schools
Tehama Elearning Academy
Temecula Valley Charter School
The Classical Academies
The Cottonwood School
The Foundation for Hispanic Education
The Grove School
The Language Academy of Sacramento
The Learning Choice Academy
The O’Farrell Charter Schools
The Preuss School UCSD
Tierra Pacifica Charter
Tree of Life Charter School
Trillium Charter School
Union Street Charter
Urban Charter Schools Collective
Valley Charter School
Valley International Preparatory High School
Valley Life Charter Schools
Valley View Charter Prep
Ventura Charter School of Arts and Global Education
Vibrant Minds Charter School
Virtual Learning Academy, Sage Oak Charter Schools
Vista Charter Public Schools
Vista Oaks Charter School
Voices College Bound Language Academies
Vox Collegiate
We Spark Learning
Westbrook Academy
Western Sierra Charter Schools
Westlake Charter School
Wildflower Open Classroom
William Finch Charter School
Write On!
YPI Charter Schools
Yuba County Career Preparatory Charter School
Various individuals
-- END --
SENATE COMMITTEE ON EDUCATION
Senator Sasha Renée Pérez, Chair
2025 - 2026 Regular
Bill No: Hearing Date: July 16, 2025
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Urgency: | Fiscal: | ||
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Subject: .
SUMMARY
This bill makes a series of changes to the oversight and operation of nonclassroom-based (NCB) charter schools. Specifically, it: (1) increases audit requirements and authorizer responsibilities; (2) revises the funding determination process to include additional financial reporting and a review of charter networks; (3) imposes restrictions on certain contracting practices and the use of academic enrichment funds; and (4) places new limits on the ability of small school districts to authorize NCB charter schools that serve student populations larger than their own.
BACKGROUND
Existing law:
Audit & Accounting Standards
- Requires charter schools to submit annual independent financial and compliance audits conducted by certified public accountants.
- Requires that audit reports be submitted to the chartering authority, the county superintendent, the State Controller’s Office (SCO), and the California Department of Education (CDE).
- Requires financial and compliance audits to follow General Accounting Office standards and the audit guide developed by the Education Audits Appeal Panel (EAAP), once adopted.
- Does not require charter schools to use the Standardized Account Code Structure (SACS), unlike school districts.
- Authorizes the SCO to conduct quality control reviews of audits, but does not require regular selection of charter school audits for review.
Funding Determination
- Requires charter schools that offer less than 80% of instructional time on school sites to obtain a funding determination from the State Board of Education (SBE) in order to receive apportionment funding.
- Authorizes the SBE to fund NCB instruction at up to 70% of standard funding unless a higher rate is justified.
- Requires the SBE to consider factors such as the charter school’s spending on certificated salaries and benefits, expenditures on schoolsites, and teacher-to-pupil ratios when making a funding determination.
- Does not require charter schools that are part of a network to apply jointly for a funding determination, nor does it require them to submit updated financial documentation between determination years.
School Contractors & Use of Funds
- Grants charter schools greater flexibility than school districts in contracting and generally exempts them from the Public Contract Code (PCC).
- Permits charter school contracts to be structured as a percentage of school revenue and does not prohibit contracts with private or religious organizations.
- Allows charter schools to provide funds or credits to families for educational enrichment activities, even if those activities are not provided by credentialed staff.
- Imposes no statutory restriction on charter school employee compensation based on student attendance or course completion.
Authorizer Oversight & Oversight Fees
- Requires charter authorizers to provide general oversight, including annual site visits, fiscal monitoring, and compliance with required reporting, such as the Local Control and Accountability Plan (LCAP).
- Authorizes authorizers to charge up to 1% of a charter school’s revenue for oversight, or up to 3% if the authorizer provides substantially rent-free facilities.
- Previously supported a Charter School Authorizer Technical Assistance Team at Fiscal Crisis and Management Assistance Team (FCMAT), but that team was defunded in 2020 and no longer operates.
- Results in wide variation in the quality and depth of authorizer oversight, particularly among small school districts with limited capacity.
Student Attendance Data Reform
- Requires California Longitudinal Pupil Achievement Data System (CALPADS) to collect student demographic and achievement data, but this system is not integrated with the state’s attendance-based funding system.
- Requires charter schools to report attendance data separately to CDE, which can allow for duplicative or inflated attendance reporting.
District Authorizers
- Permits any school district, regardless of size or capacity, to authorize charter schools, including NCB charter schools.
- Does not impose a statutory cap on the number of charter school pupils a district may authorize in proportion to its own average daily attendance (ADA).
- Does not authorize or require the reassignment of charter schools to larger or more capable authorizers upon renewal.
Independent Study (IS) & Course-Based Independent Study (CBIS)
- Authorizes local educational agencies (LEAs), including charter schools, to offer IS and CBIS programs under specific requirements related to credentialed supervision, content rigor, and written learning agreements.
- Prohibits pupils with an Individualized Education Plan (IEP) from participating in IS unless their IEP explicitly allows it.
- Imposes a funding penalty for CBIS if more than 10% of an LEA’s total ADA is generated through CBIS, unless the LEA qualifies for an exemption.
NCB Moratorium
- Imposes a moratorium on the authorization of new NCB charter schools until January 1, 2026.
- Allows existing NCB charter schools to seek renewals or material revisions during the moratorium, under specified conditions.
ANALYSIS
This bill:
Audit and Accounting Standards
- Aligns charter school audits with those of school districts, including audit timelines, procedures, and use of the SACS.
- Requires school auditors to complete targeted training.
- Directs updates to the audit guide and compliance procedures to include charter-specific content, including sampling methodology, attendance by track and month, material related-party transactions, classroom-based instructional minutes, student-teacher ratios, funding determination, large monetary transfers, electronic payments, and charter oversight practices.
- Requires the SCO to conduct more frequent quality control reviews of auditors.
- Establishes an Office of the Inspector General under the SBE to investigate charter-related financial misconduct.
Funding Determination
- Retains the existing SBE funding determination process for NCB charter schools, but adds new transparency requirements, including:
- Requiring charter schools within the same network to apply jointly.
- Requiring submission of financial documents to CDE in non-determination years.
- Including the current expense of education in the funding determination review.
- Codifying mitigating factors such as reserves, one-time funds, and facilities spending.
School Contractors & Use of Funds
- Prohibits charter schools from contracting with private religious organizations or schools.
- Prohibits contracts structured as a percentage of school revenue.
- Prohibits charter schools from offering funds or credits for enrichment activities not provided by credentialed employees.
- Prohibits employee bonuses or compensation tied to student attendance or course completion.
Authorizer Oversight and Technical Assistance
- Reestablishes a statewide Charter Authorizer Technical Assistance team at FCMAT.
- Requires authorizers to provide enhanced oversight in key compliance areas, including:
- Attendance accounting and enrollment.
- Student-teacher ratios.
- Classroom-based instructional minutes.
- Audit compliance monitoring.
- Credit card and electronic expenditures.
Student Attendance Data Reform
- Requires CDE to study the feasibility of integrating CALPADS with the state’s ADA funding system to detect duplicate or excessive attendance claims.
District Authorizer Capacity
- Caps authorizing capacity for districts with fewer than 10,000 ADA to no more than 100% of their own ADA in authorized NCB charter enrollment.
- Allows existing NCB charters to remain with a small-district authorizer if the district has at least four full-time executive-level staff.
- Requires the SBE to reassign NCB charters that exceed this threshold to a larger authorizer within the county upon renewal.
NCB Moratorium
- Lifts the statutory moratorium on the approval of new NCB charter schools as of December 31, 2025.
STAFF COMMENTS
- Need for the bill. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
“One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
“Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
- Background on Charter Schools. Charter schools are public schools that operate under the terms of a charter agreement approved by a school district, county office of education, or the SBE. Established by the Charter Schools Act of 1992, they were intended to increase learning opportunities for all students, especially those who are academically low-achieving, and to promote innovation, site-based decision-making, and performance-based accountability.
Today, charter schools serve over 700,000 students in California. They are publicly funded and tuition-free but operate with greater flexibility in exchange for accountability for results. Charter schools may be operated by nonprofit organizations or, in some cases, by charter management organizations (CMOs) that oversee multiple schools. While most charter schools operate classroom-based programs similar to traditional schools, a significant share operate in a NCB model.
- What Are NCB Charter Schools? A charter school is considered NCB if less than 80% of its instructional time occurs under the immediate supervision of a credentialed teacher in a classroom setting. NCB charter schools may offer instruction through virtual, blended, or home-based learning models. These schools often serve high proportions of students with unique learning needs, such as students who are medically fragile, pursuing athletic or artistic careers, or seeking alternatives to traditional settings.
Because NCB schools are not funded automatically based on attendance like classroom-based schools, they must obtain a funding determination from the SBE. This process is based on an evaluation of audited expenditures and is intended to ensure public funds are being used for instructional purposes. However, the process has been widely criticized for its lack of rigor, real-time accountability, and effectiveness in preventing misuse of funds. The integrity of financial reporting in NCB schools plays a critical role in funding eligibility, and, when abused, can be exploited to inflate apportionments and divert public resources.
- The Moratorium on NCB Charter Schools and Broader 2019 Charter School Reforms. In 2019, the Legislature passed AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) and AB 1507 (Smith, Chapter 487, Statutes of 2019), which significantly restructured charter school law. Among other changes, AB 1505 strengthened the criteria for charter authorization and renewal by:
- Allowing authorizers to consider academic and fiscal impact on the district when reviewing petitions.
- Tying renewal decisions to a school’s performance on the California School Dashboard, streamlining renewal for high performers and requiring greater scrutiny for low performers.
- Expanding credentialing requirements to all charter school teachers and applying conflict-of-interest laws to charter boards.
AB 1507 restricted charter schools from operating sites outside their authorizing district’s boundaries.
Together, these bills also enacted a moratorium on new NCB charter schools through January 1, 2026. The pause was intended to give the state time to re-evaluate oversight, funding, and academic accountability in the NCB sector, following concerns about weak controls and inconsistent performance.
This bill builds on this reformed oversight landscape by proposing additional audit, fiscal, and governance tools specific to charter school accountability.
- The A3 Charter Schools Fraud Case. The most significant charter school fraud case in California’s history, the A3 Education scandal, came to light in 2019. Prosecutors alleged that two individuals created a network of 19 NCB charter schools and enrolled tens of thousands of students, many without their knowledge or participation, to fraudulently claim public funding. The scheme involved:
- Inflated and duplicated enrollment using a manipulated “multi-track” calendar.
- Unauthorized use of public funds through related-party contracts.
- A total fraud estimate of over $400 million in misappropriated state funds.
The case revealed multiple breakdowns in the oversight chain—from charter authorizers to external auditors to state agencies—prompting calls for systemic reform.
- Oversight Reports Prompting Legislative Action. In response to the A3 scandal and other fraud incidents, state and independent agencies released two major reports:
- SCO Charter School Audit Task Force Report (2024): Focused on improving the quality of school audits by increasing auditor training, revising the audit guide, establishing certified public accountant review and rotation policies, and ensuring follow-up on audit findings.
- LAO/FCMAT Joint Report on NCB Charter Schools (2024): Analyzed the NCB funding determination process and recommended major changes to better align funding with instructional delivery. Recommendations included real-time enrollment tracking, clearer definitions of instruction, and changes to charter oversight authority.
- Recent Highlands audit highlights gaps in oversight and transparency. A June 2024 audit by the SCO of Highlands Community Charter School illustrates how weak governance structures and oversight processes can enable significant financial mismanagement, even within existing legal frameworks. The audit found that Highlands, one of the state’s largest NCB charter schools, had overpaid more than $52 million to an adult education vendor run by the school’s own executive director and board president—both of whom held leadership roles in both organizations. More than $61 million in questionable expenditures were identified, including improper reimbursements, personal salary allocations, and contracts that lacked competitive bidding or board approval. The audit also noted a failure to follow transparency laws, with the school not properly notifying the public of board meetings or actions. These findings underscore the urgency of this bill’s provisions aimed at improving oversight, audit standards, and transparency.
This example demonstrates that even well-established NCB charter schools can operate with insufficient checks and balances. It also shows that current accountability structures—particularly for contracting practices and board governance—can allow substantial misuse of public funds. The Highlands case reinforces the need for clearer rules, stronger financial controls, and more consistent oversight to protect students and taxpayers.
- Response to stakeholder concerns. Since its introduction, this bill has been substantially amended to address concerns raised by charter school advocates regarding the scope and impact of certain provisions. In particular, earlier versions of the bill proposed significant changes to the funding determination process that would have reduced apportionments for charter schools offering limited in-person instruction. Opponents argued these changes could have resulted in funding reductions of up to 30% for some schools. Those provisions have been removed. The bill now retains the existing structure for funding determinations, while adding new financial documentation requirements and clarifying certain criteria to improve transparency.
The bill also previously included a proposal to increase the maximum oversight fee from 1% to 3% of a charter school’s revenue. That provision has been removed, and the bill does not modify existing oversight fee limits.
In addition, several other provisions that generated concern have been removed from the bill, including:
- A prohibition on employees entering into service contracts that exceed PCC limits.
- A requirement for charter schools to be monitored under the Williams textbook sufficiency process.
- A proposal to subject charter school contracting to public bidding requirements under the PCC.
- Language allowing school districts emerging from state receivership to deny charter petitions based on fiscal impact.
- A requirement for governing boards to approve all contracts, now narrowed to those totaling more than $100,000.
- New credentialing requirements for certain charter school employees.
These amendments reflect ongoing negotiations between the author’s office, the bill’s sponsors, and representatives of the charter school community. While not all stakeholders are participating in these discussions, and many continue to oppose the bill, the author has worked to narrow the bill’s scope and revise provisions to minimize operational disruption while advancing goals related to fiscal accountability, oversight capacity, and transparency.
- Balancing accountability with support for student-centered choice. This bill has generated substantial public engagement, especially from families who rely on NCB charter schools for educational flexibility. Many of these messages express concern that increased oversight could restrict school choice or reflect a broader opposition to charter schools. These concerns reflect real experiences and deserve to be taken seriously.
At the same time, this bill emerged in response to longstanding oversight concerns and notable fraud cases—not from an effort to limit educational options. In cases like A3 and Highlands, weaknesses in data systems, fiscal reporting, and oversight structures enabled large-scale misuse of public funds. To address these concerns, state agencies developed recommendations aimed at improving transparency, accountability, and operational safeguards in the NCB space.
This bill is built around those recommendations. Many early provisions have been amended or removed in response to stakeholder concerns. The remaining proposals focus on strengthening financial practices, clarifying oversight roles, and ensuring that public funds are used appropriately.
Support for this bill—or for the concepts it puts forward—does not need to signal a position on the broader debate over charter schools. It may simply reflect a belief that clear accountability standards are essential to preserving the innovation and flexibility that many families value in NCB charter programs.
- Targeted reforms in line with oversight recommendations. This bill reflects a coordinated response to the findings of the 2024 LAO/FCMAT review of the NCB funding determination process and the SCO’s Charter School Audit Task Force. Both reports identified systemic vulnerabilities in the oversight of NCB charter schools, particularly related to fiscal accountability, weak audit standards, and insufficient authorizer capacity. The bill seeks to close these gaps through a range of provisions aimed at standardizing audits, clarifying oversight responsibilities, limiting authorizations by small school districts, and increasing transparency in attendance accounting. Unlike early versions of the bill, these reforms are not intended to reduce funding to charter schools or change the instructional models they may offer. Rather, they are focused on ensuring that public funds are spent appropriately and that oversight mechanisms are robust and equitable.
- Improved audit practices and financial accountability. A major theme of both the LAO/FCMAT report and the SCO’s Charter School Audit Task Force findings was the need to modernize and strengthen charter school audits. The A3 case revealed that NCB charter schools were able to hide fraudulent practices due to insufficient audit procedures, lack of auditor training, and the ability to switch auditors if problems were identified. The bill addresses these concerns by aligning charter school audit procedures with those used for school districts, requiring auditors to receive specialized training, and directing the Education Audit Appeals Panel to revise the audit guide to include new areas of review specific to NCB charter schools, such as teacher-pupil ratios and documentation sampling. These changes are intended to ensure that audits are not only more rigorous but also better able to detect misuse of funds and systemic noncompliance.
- Ensuring authorizer accountability as part of a comprehensive oversight system. The most serious charter school fraud cases in California—A3 and Highlands—were perpetrated by school operators who intentionally misused public funds. However, these cases also revealed weaknesses in the oversight infrastructure that allowed misconduct to persist undetected for years. Charter school authorizers play a critical role in ensuring legal compliance and educational quality, but that role varies considerably depending on the size, capacity, and approach of the authorizing district.
In some instances, authorizers lacked sufficient resources or staff expertise to monitor complex NCB programs, especially those serving students far beyond district boundaries. In others, warning signs were missed or under-addressed, despite red flags in audits or financial reports. This bill does not assign blame to authorizers for every instance of misconduct, but it does reflect a broader consensus that oversight obligations must be taken seriously—and that there should be reasonable consequences when they are not.
To that end, the bill strengthens expectations for authorizer monitoring in key risk areas such as attendance accounting, electronic payments, and student-to-teacher ratios. It also seeks to align authorizing capacity with district size and staff infrastructure. While the bill stops short of imposing direct financial penalties on authorizers, the concept of holding authorizers more accountable—such as through potential reimbursement of oversight fees when duties are neglected—has been raised during policy discussions and may merit future consideration. These reforms are ultimately designed not to penalize oversight agencies, but to ensure that the safeguards intended to protect students and taxpayers function as intended.
- Matching authorizer capacity to oversight responsibility. This bill limits the ability of small school districts to authorize NCB charter schools that serve student populations larger than the district itself. Specifically, districts with fewer than 10,000 ADA may authorize NCB charter schools only up to a combined enrollment equal to 100% of their own ADA. Existing NCB charter schools may remain with their current small district authorizer if that authorizer employs at least four executive-level staff. For NCB charter schools that exceed the cap and are authorized by districts without the required staffing capacity, the bill directs the SBE to reassign the charter to a larger authorizer within the county at the time of the school’s next renewal. These changes are intended to better align authorizer oversight capacity with the scale of the schools they oversee.
- Preventing attendance fraud through data modernization and calendar safeguards. One of the most egregious findings in the A3 fraud case was the manipulation of student enrollment and calendars to double- or triple-count attendance for state funding. This was made possible, in part, because California lacks a real-time, student-level system for tracking ADA. Currently, attendance is reported separately from student demographic data in CALPADS, making it difficult to detect duplicate or sequential enrollments across schools. This bill directs CDE to study the feasibility of integrating attendance data into CALPADS by 2030, laying the groundwork for long-term improvements in fraud detection.
- Charter authorizer support and training. In addition to addressing oversight limits, the bill proposes reestablishing a statewide support structure for charter school authorizers, modeled after the now-defunct Charter Authorizers Regional Support Network (CARSNet). The new Charter Authorizer Support Team (CAST), to be administered by FCMAT, would provide training, technical assistance, and tools for small and mid-size districts tasked with overseeing charter schools. The goal is to build authorizer capacity not by defaulting to state-level control but by investing in local expertise. This proposal aligns with SCO’s Charter School Audit Task Force recommendations and has been retained in the bill with support from charter oversight organizations.
- Use of instructional funds for vendor-based enrichment. This bill prohibits all LEAs, including NCB charter schools, from allocating or advertising the availability of funds or credits to be spent at the discretion of a pupil’s parent, guardian, or education rights holder on educational enrichment activities that are not provided by a credentialed employee of the agency and that are paid for by the agency. This provision is not based on any specific recommendation from the LAO/FCMAT or SCO reports. However, it appears to reflect broader concerns that emerged during investigations into misuse of public funds in the NCB sector—particularly the blurred lines between instructional expenditures and private consumer choices.
Supporters of this provision argue that public school dollars should not be used as flexible spending accounts for parents, especially when those dollars are sometimes paying for extracurriculars like martial arts, horseback riding, or sewing that—while enriching—are not typically part of a standards-aligned instructional program. They also point to the rise of marketing materials prominently advertising academic funds as a recruitment tool, raising concerns about whether such practices incentivize privatization of public education and encourage families to pressure schools to fund activities that may be peripheral to academic progress. In this view, the provision helps ensure that credentialed educators—not parents or vendors—retain responsibility for shaping students’ educational experiences and aligning expenditures with state goals.
Critics of this provision counter that many vendor-based services are educationally meaningful and fill real access gaps—particularly in rural areas or for students with unique needs. They note that in many NCB programs, credentialed teachers already work closely with families to ensure that all instructional spending is aligned to a student’s learning plan, subject to multiple layers of school oversight. From this perspective, the bill’s language could eliminate not just outlier abuses but also thoughtful, compliant practices that have helped students thrive in alternative learning environments.
This provision raises a fundamental policy tension between preserving educational flexibility and ensuring public accountability. Whether it strikes the right balance between the two remains a point of active debate.
- Arguments in support. The California School Employees Association (CSEA), sponsor of AB 84, supports the bill as a necessary set of reforms aligned with recommendations from the LAO, FCMAT, the SCO’s Charter Audit Task Force, and the California Charter Authorizing Professionals. CSEA argues that California’s existing oversight framework for NCB charter schools has proven inadequate, allowing significant misuse of public funds and governance breakdowns.
CSEA highlights the 2019 A3 Education scandal, in which $400 million in state funds were misappropriated through fraudulent student enrollment schemes and self-dealing contracts. A3 targeted small school districts with limited capacity to serve as authorizers and operated a network of schools under centralized control, using their authority to contract with related entities. CSEA contends that this case illustrates how existing safeguards—audits, authorizer oversight, and the funding determination process—failed to prevent large-scale fraud.
With the NCB charter moratorium set to expire in January 2026, CSEA believes AB 84 is a timely and measured response. The bill reflects the work of nonpartisan agencies tasked with identifying structural gaps and proposing improvements. In CSEA’s view, the Legislature must act now to close loopholes and ensure that public funding for NCB charter schools is subject to stronger accountability moving forward.
- Arguments in opposition. A coalition representing nearly all California charter schools—including APLUS+, the California Charter Schools Association, and the Charter Schools Development Center—opposes AB 84. While the coalition supports efforts to prevent fraud, it argues that the bill takes a heavy-handed approach that would impose excessive administrative requirements, divert funds from classrooms, and establish two new state bureaucracies. The coalition instead supports SB 414 (Ashby, 2025), which they view as a more balanced and targeted reform effort aligned with the recommendations of recent oversight reports and better suited to support high-performing charter schools.
Opponents contend that AB 84 goes well beyond what recent oversight reports recommend and reopens long-settled policy issues without clear justification. They argue that the bill expands audit and authorizer oversight duties without ensuring accountability for authorizers themselves, caps authorizing authority based on district size without supporting data, and imposes costly mandates on schools and state agencies without providing funding. They also raise concerns about provisions such as limits on teacher compensation for meetings, new reporting obligations, and the creation of new oversight agencies, asserting these are not grounded in evidence and would harm effective educational programs.
While acknowledging that discussions with the author’s office and committee staff are ongoing, the coalition believes that AB 84 is not the right vehicle for reform in its current form. They describe the bill as punitive, costly, and unlikely to achieve its intended outcomes. The coalition reaffirms its support for responsible charter school oversight and expresses appreciation for the committee’s earlier support of SB 414 as a more appropriate path forward.
- Committee amendments and ongoing negotiations. In preparation for this hearing, committee staff has engaged extensively in negotiations with the author’s office, the bill’s sponsors, and charter school representatives, including opponents of the bill. These discussions have resulted in a set of committee amendments that reflect meaningful compromises across several policy areas. These include:
Funding Determination Process
- Clarify that NCB charter schools within the same network must apply for funding determinations in the same year; in turn, strike the requirement that data from schools within the same network be aggregated as part of the funding determination process.
- Clarify that the definition of “virtual charter school” is for purposes of data collection in CALPADS.
- Strike the provision lowering the in-person instruction threshold from 80% to 75% for purposes of defining an NCB charter school and triggering the funding determination requirement.
- Delay the implementation of the codified funding determination process from 2026-27 to 2027–28.
- Clarify the specific financial documentation (e.g., pupil-to-teacher ratio, certificated salaries and benefits) that NCB charter schools must annually provide to CDE in connection with their funding determination.
- Establish a three-year funding determination period for NCB charter schools that are part of a network instead of an annual funding determination.
- Provide the SBE discretionary authority to consider mitigating circumstances when a charter school does not otherwise qualify for 100% funding.
- Exclude from revenue, for funding determination purposes, reserve transfers of up to 5% of a charter school’s total revenue or the amount needed to bring reserves to 10% of total annual expenditures, whichever is smaller.
- Refine the definition of a “network of NCB charter schools” to emphasize shared governance and common corporate control, while removing criteria based on shared teachers or large common vendor contracts.
Audit and Oversight
- Delay the implementation of new audit guide requirements from 2026-27 to 2027-28.
- Delay the implementation of the auditor training requirement from 2026–27 to 2027-28.
- Eliminate the requirement to include specific audit schedules on pupil-to-teacher ratio, certificated staff salaries and benefits, and instruction/services expenditures.
Technical and Clarifying Changes
- Include numerous other minor edits for clarity and implementation without changing substantive policy.
These committee amendments are not intended to reflect a final agreement between all parties, and several provisions remain the subject of disagreement. However, they represent a meaningful step forward in the negotiation process and are being requested by the Committee as a demonstration of good faith and continued progress.
Discussions will continue beyond this hearing, not only to refine the provisions addressed in these amendments but also to work through the many other policy areas this bill touches related to the oversight, operation, and funding of NCB charter schools. The Committee’s engagement at this stage plays an important role in shaping a more balanced and enforceable framework—one that strengthens accountability while preserving access to high-quality NCB programs.
- Related legislation.
SB 719 (Cabaldon, 2025) would enact a series of audit reform measures for school districts, county offices of education, and charter schools. This bill is currently pending in the Senate Business, Professions and Economic Development Committee.
SB 414 (Ashby, 2025) would make a broad set of changes to charter school law related to audit procedures, financial oversight, governance, and funding determinations. The bill is currently pending in the Assembly Education Committee.
SB 1477 (Ashby, 2024) would have required the governing board of a charter school to review, at a public meeting, the annual audit of the charter school for the prior fiscal year; require auditors of NCB charter schools to perform specified activities; and require all LEAs to only enter into an agreement for educational enrichment activities with a vendor that is vetted and approved pursuant to specified criteria. This bill was held in the Assembly Education Committee.
AB 1316 (O’Donnell, 2021) would have established new requirements for NCB charter schools in the areas of auditing and accounting standards, the funding determination process, adding requirements to the contracting process, IS program requirements, required teacher to pupil ratios, limiting authorization of NCB charters by small districts, and the authorizer oversight process. This bill was held on the Assembly Floor.
SB 593 (Glazer, 2021) would have required FCMAT to offer auditors of NCB charter schools training on the review of charter school financial documents, require the governing board of a charter school to annually review the audit of the charter school, and create new IS study requirements. This bill was held in the Assembly Education Committee.
AB 2990 (C. Garcia, 2020) would have placed several new restrictions on educational enrichment activities at NCB charter schools. This bill was held on the Assembly Floor.
AB 1505 (O’Donnell, Chapter 486, Statutes of 2019) established a two year moratorium on the establishment of NCB charter schools until January 1, 2022.
AB 1507 (Smith, Chapter 487, Statutes of 2019) prohibits charter schools from being located outside the boundaries of their authorizer and, authorizes NCB charter schools to establish one resource center within the jurisdiction of the school district where the charter school is located.
SUPPORT
American Federation of State, County and Municipal Employees
California Federation of Labor Unions
California School Employees Association
California Teachers Association
Los Angeles County Democratic Party
Public Advocates
OPPOSITION
21st Century Alliance
Achieve Charter Schools
Alder Grove Charter School
Allegiance Steam Academy
Alliance College-Ready Public Schools
Alliance of Independent Learners
Alma Fuerte Public School
Alpha Public Schools
Alta Public Schools
Altus Schools
America’s Finest Charter School
American Heritage Charter Schools
Antioch Charter Academy
Antioch Charter Academy II
Ararat Charter School
Arts in Action Community Charter Schools
ASA Charter School
Aspen Public Schools
Aspire Public Schools
Association of Personalized Learning Schools & Services
Aveson Schools
Big Picture Educational Academy
Big Sur Charter School
Birmingham Community Charter High School
Bridges Charter School
Bridges Preparatory Academy
Brookfield Engineering Science Technology
Butte County Office of Education
Cabrillo Point Academy
California Homeschool Network
California Association of School Business Officials
California Baptist for Biblical Values
California Catholic Conference
California Charter Schools Association
California County Superintendents
California Creative Learning Academy
California Montessori Project
California Online Public School
California Pacific Charter Schools
California Parents for Public Virtual Education
California Policy Center
California Republic Leadership Academy
California Virtual Academies
Camarillo Academy of Progressive Education
Camino Nuevo Charter Academy
Champs Charter High School of the Arts
Charter Schools Development Center
Children’s Community Charter School
Chime Institute
Choices Charter School
City of Huntington Beach
Clarksville Charter School
Coastal Grove Charter School
College Prep Genius
Community Learning Center Schools
CORE a Community Collaboration
CORE Butte Charter School
CORE Charter School
County of Sonoma
Creative Cultivation Studio
Creative Learners of California
Creative Learning Place
Crossroads Charter Academy
CWC Los Angeles
Da Vinci Schools
Delta Managed Solutions
Desert Trails Preparatory Academy
Discovery Charter Schools
Dixon Montessori Charter School
Dr. Lewis Dolphin Stallworth Charter School
Dual Language Immersion North County
Edison Bethune Charter Academy
Ednovate
Education for Change Public Schools
Eel River Charter School
El Sol Science and Arts Academy
Element Education
Elevate School
Environmental Charter Schools
Epic Charter School
Equitas Academy Charter Schools
Excel Academy Charter School
Extera Public Schools
Family Partnership Charter School
Feaster (Mae L.) Charter School
Feather River Charter School
Fenton Charter Public Schools
Foothill Learning Academy
Forest Charter School
Forest Ranch Charter
Freedom Angels
Fresno Innovative Charter Schools
Gabriella Charter Schools
Gateway College and Career Academy
Gateway Community Charters
Girls Athletic Leadership Schools Los Angeles
Glacier High School Charter
Golden Eagle Charter School
Golden Valley Charter School
Gorman Learning Charter Network
Granada Hills Charter
Granite Mountain Charter School
Great Valley Academy
Green DOT Public Schools
Griffin Technology Academies
Growth Public Schools
Guajome Schools
Hawking Steam Charter School
Heartwood Charter School
Hemet Christian Homeschool Moms
High Tech Los Angeles
History Rocks!
Home Haven Collective
Hometech Charter School
Howard Gardner Community School
ICEF Public Schools
iLEAD
iLEAD CA Charters 1
iLEAD California
Ingenium Schools
Innovations Academy
Innovative Education Management
Inspire School of Arts and Sciences
Intellectual Virtues Academy High
Invictus Leadership Academy
Irvine International Academy
Ivy Academia
JCS Family of Charter Schools
John Muir Charter Schools
Journey School
Kairos Public Schools
Kavod Charter School
Kepler Neighborhood School
Kid Street Charter School
Kidinnu Academy
KIPP Public Schools Northern California
Larchmont Charter School
Lashon Academy
Learn4life
Learning for Life Charter School
Legislation Take Action
Leonardo Da Vinci Health Sciences Charter School
Lighthouse Baptist Church
Literacy First Charter Schools
Little Explorers Homeschool Co-Op
Live Online Math
Los Angeles Academy of Arts and Enterprise
Magnolia Public Schools
Maria Montessori Charter Academy
Matrix for Success Academy
Mayacamas Countywide Middle School
Meadows Arts and Technology Elementary School
Method Schools
Mission Vista Academy
Montague Charter Academy
Motivated Youth Academy
Mountain Home School Charter
Multicultural Learning Center
Museum School Collaborative
Natomas Charter School
Natomas Homeschool Alliance
Natomas USD for Freedom
Navigator Schools
New Heights Charter School
New West Charter
Nord Country School
Northern United Charter Schools
Northwest Prep Charter School
Nova Academy Early College High School
Ocean Charter School
Odyssey Charter Schools
Olive Grove Charter School
Orange County Academy of Sciences and Arts
Orange County School of the Arts / California School of the Arts Foundation
Pacific Charter Institute
Pacific View Charter School
Pacoima Charter School
Para Los Ninos
Pasadena Rosebud Academy Charter School
Pazlo Education Foundation
PCA College View
Peabody Charter School
Peninsula Parents for Personalized Education
Plumas Charter School
Port of Los Angeles High School
Pseudogenius Learning Labs
Puente Learning Center
Real Impact.
Redwood Coast Montessori
Redwood Collegiate Academy
Renaissance Arts Academy
Revillage Napa Homeschoolers
Rex and Margaret Fortune School of Education
River Montessori Charter School
River Oaks Academy Charter School
River Springs Charter School
Rocklin Academy Family of Schools
Sage Oak Charter Schools
San Carlos Charter
San Diego Virtual School
San Jose Conservation Corps & Charter School
Santa Rosa Academy Parents
Santa Rosa French-American Charter School
Save Glendora Schools
Save Our Schools Coalition
Scale Leadership Academy
Scholarship Prep Charter School
Sebastopol Independent Charter
Sequoia Career Academy
Shade Canyon School
Shasta Charter Academy
Shasta View Academy
Sherman Thomas Charter School
Sherwood Montessori
Small School Districts Association
Soar Charter Academy
Southwest California Legislative Council
Sparrow Academy
Stand Up Sacramento County
Stellar Charter School
Stem Prep Schools
Stride
Success One! Charter
Summit Enrichment Academy
Summit Public Schools
Suncoast Charter
Suncoast Prep Academy
Supporting True Options in Public Education Coalition
Sycamore Creek Community Charter School
Synergy Academies
Taylion High Desert Academy
Teach Public Schools
Tehama Elearning Academy
Temecula Valley Charter School
The Classical Academies
The Cottonwood School
The Foundation for Hispanic Education
The Grove School
The Language Academy of Sacramento
The Learning Choice Academy
The O’Farrell Charter Schools
The Preuss School UCSD
Tierra Pacifica Charter
Tree of Life Charter School
Trillium Charter School
Union Street Charter
Urban Charter Schools Collective
Valley Charter School
Valley International Preparatory High School
Valley Life Charter Schools
Valley View Charter Prep
Ventura Charter School of Arts and Global Education
Vibrant Minds Charter School
Virtual Learning Academy, Sage Oak Charter Schools
Vista Charter Public Schools
Vista Oaks Charter School
Voices College Bound Language Academies
Vox Collegiate
We Spark Learning
Westbrook Academy
Western Sierra Charter Schools
Westlake Charter School
Wildflower Open Classroom
William Finch Charter School
Write On!
YPI Charter Schools
Yuba County Career Preparatory Charter School
Various individuals
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 84
Author:(Muratsuchi and Garcia)
As Amended Ver:June 3, 2025
Majority vote
SUMMARY
Establishes new requirements for charter schools in the areas of auditing and accounting standards, the funding determination process, contracting process, authorization of NCB charters by small districts, and the authorizer oversight responsibilities.
Major Provisions
Audit and Accounting Standards
- Requires training for local educational agency (LEA) auditors, requires LEA audits to be peer reviewed, and requires the State Controller's Office (SCO) to perform quality control reviews, as specified.
- Requires the K-12 audit guide to include schedules on pupil enrollment, pupil attendance, the 25 largest monetary transfers, pupil-to-teacher ratios, related loans, the expense of education, charter oversight expenses; and include audit instructions on sample section, materiality, enrollment, charter authority input, related parties, and classroom-based instruction verification.
NCB Charter School Funding Determination
- Maintains the existing funding determination process through the State Board of Education (SBE) and implements transparency measures including but not limited to requiring networks of nonclassroom based charters to apply for their funding determination at the same time.
Charter School Contracts
- Prohibits private religious organizations or schools from serving as contractors.
- Requires charter schools to participate in competitive bidding of contracts in the same manner as school districts.
- Prohibits Local Control Funding Formula (LCFF) funding from paying for educational enrichment programs not provided by a credentialed teacher.
School District Authorizers
- Permits school districts with less than 10,000 in Average Daily Attendance (ADA) to authorize NCB charters up to 100% of district ADA. Authorizes a school district with at least four executive level staff, to authorize NCB charter schools above 100% of the district ADA.
Authorizer Oversight for Charter Schools
- Increases the oversight responsibilities for charter school authorizers and establishes the Charter Authorizing Support Team at the Fiscal Crisis and Management Assistance Team (FCMAT).
NCB charter school Moratorium
- Sunsets the moratorium on NCB charter schools as of December 31, 2025.
COMMENTS
What is nonclassroom-based instruction? Nonclassroom-based instruction includes computer-based instruction using software modules, teacher-directed independent study, and traditional homeschool parents who enroll their children in independent study charter school programs.
A nonclassroom-based charter school is defined as a school with less than 80% of its total ADA that is classroom based, in which instruction takes place in a classroom setting. As of April 2021, there were 304 charter schools considered to be NCB. Of that number, 105 charter schools self-identified as providing exclusively virtual or primarily virtual instruction.
Existing law defines charter school nonclassroom-based instruction as instruction that does not meet the requirements of classroom-based instruction:
- Charter school pupils are engaged in required educational activities and are under the immediate supervision and control of a certificated teacher;
- At least 80% of the instructional time offered by the charter school is at the schoolsite (defined as a facility that is used primarily for classroom instruction); and
- Pupil attendance at the schoolsite is required for at least 80% of the minimum instructional time.
Recent A3 Charter Schools fraud case reveals significant weaknesses in nonclassroom-based charter school law. Numerous charter school fraud cases have been documented in recent years including, but not limited to: A3 Charter Schools, Magnolia Charter School, Tri-Valley Learning Corporation, among others.
In People v. McManus the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen charter schools (A3 Charter Schools). The case revealed many weaknesses in state public charter school law in the areas of pupil data tracking, auditing, school finance, and oversight, which resulted in A3 schools surrendering more than $210 million, 13 houses, and numerous shares in third-party companies. These weaknesses include:
- Lack of pupil data tracking. Currently, charter schools submit aggregate attendance data for each school without any information about individual pupils. Oversight agencies do not maintain individual pupil data about enrollments in charter schools they oversee for state funding purposes. One A3 charter school was found to be paying a private company to recruit and collect personal information from pupil athletes. The school then enrolled the athletes in the charter school without their knowledge—thereby fraudulently generating ADA—and paid the recruiting company a portion of the public funds generated as a finder's fee.
- Multi-track calendar abuses. The A3 schools were found to have deceived the state into paying them significantly more funds by manipulating the "multi-track year round calendar," which charter schools are currently authorized to use. The A3 schools would (1) run a fake summer school to collect funding for pupils that never knowingly enrolled, (2) inflate their fraudulent summer school attendance numbers—to the tune of about 60%—by offering fewer days of fake summer school instruction, and (3) transfer pupils between different A3 schools, increasing attendance fraudulently by another roughly 40%.
- Lack of meaningful audit requirements. The annual audits required by law found little to no malpractice by A3 schools, for several reasons. First, auditors are not required to complete any specialized up-front or ongoing training in school finance or law to audit a charter school. Second, charter schools can choose their auditors—A3 schools were shown to have fired their auditing firms and hired less experienced firms in the rare event that audit findings were made. Third, NCB charter schools are allowed to pick their own samples of pupil documentation showing compliance with independent study laws—enabling A3 to hide the fraudulent aspects of their operation from auditors. Fourth, auditors are not required to audit the education program received by pupils, only compliance with documentation. In the A3 schools, many children were enrolled from sports teams, believing they were participating in a fundraiser and had no knowledge they were enrolled in a charter school at all.
- Flawed funding determination process. While existing law requires that NCB charter schools only receive full funding in exceptional circumstances—when at least 80% of funding is spent directly serving pupils—the current funding determination process essentially funds all NCB schools at 100%. This is because existing regulations define "instructional and related services" very broadly, and charter schools can meet these spending benchmarks without necessarily spending money on pupils. Further, NCB charter schools are only required to request a funding determination and provide compliance documentation to the SBE every five years.
- Perverse financial incentives for charter school authorizers. Existing law allows charter authorizers to collect oversight fees from charter schools under their authority but does not require authorizers to demonstrate that the fees are spent on meaningful school oversight. Small school districts that approve NCB charter schools serving pupils not located in the district can earn significant oversight fees—creating a built-in incentive to overlook poor charter school practices. For example, Dehesa Elementary School District approved over ten charter schools all providing NCB programs. The district's oversight fees for the 2017-2018 school year were more than its entire expenditures for all employees hired by the district. When the district learned of improprieties from their charter schools it took no meaningful action. Ultimately, the district collected the oversight fees and only acted to revoke the A3 Charter Schools under its authority once law enforcement was involved.
Some charter schools allow parents to direct LCFF dollars. Some NCB charter schools cater to families that have the parent serve as the primary person delivering instruction and these schools allow parents to direct how their children's LCFF dollars are spent.
As of April 2025, the South Sutter Charter School's website states, "For the 2024/25 school year, family accounts are funded up to the following amounts:
- $4,150 – High School;
- $3,650 – 1st-8th Grade; and
- $2,650 – TK-K Grade."
Arete Charter Academy's list of vendors includes, but is not limited to:
- Horsemanship;
- Swim Lessons;
- CrossFit training;
- Golf Pro Lessons;
- Music Lessons;
- Tutoring Services;
- Dance Lessons; and
- Cooking Lessons.
Funding determination. As noted earlier in this analysis, NCB charter schools are required to obtain a funding determination that is approved by the SBE. This funding determination establishes the percentage of funding the NCB charter school will receive compared to all other traditional classroom based schools. Most charter schools apply for a 100% NCB funding determination. To do so, they must meet the following criteria:
- Spend at least 40% of total public revenue on instructional certificated salary and benefits;
- Spend at least 80% of total public revenue on instruction related services; and,
- Not exceed a 25:1 pupil to teacher ratio.
LAO/FCMAT Review of NCB Charter Funding Determination Process. In their 2024 report to the Legislature, the Legislative Analyst Office (LAO) and FCMAT made the following recommendations:
Recommend Several Changes to Improve Funding Determination Process. We provide several specific recommendations the Legislature could enact to improve the funding determination process. Our recommendations are intended to narrow the process to a smaller subset of schools, improve the comprehensiveness and quality of data submitted to CDE, and streamline some aspects of the process. Most significantly, we recommend the Legislature:
- Narrow the Definition of a Nonclassroom-Based Charter School. We recommend narrowing the definition of a nonclassroom-based charter school so that the designation excludes those schools that provide the majority of their instruction in person. This would exclude charter schools whose programs have cost structures that are similar to traditional classroom-based programs.
- Improve Quality of Data Submitted to the CDE. To assist the CDE in efficiently reviewing and processing funding determination forms, we recommend requiring data submitted by charter schools be consistent with their annual audits. We also recommend several changes that would require information submitted to the CDE be subject to annual audits.
- Use Multiple Years of Data for Funding Determinations. We recommend the funding determinations take into consideration a school’s aggregate spending for all years since the previous funding determination. This would ensure school expenditures are aligned with the funding determination thresholds consistently over time.
Consider Changes to Charter School Oversight. We also provide several recommendations for the Legislature to consider regarding broader oversight of charter schools. These issues generally apply to all charter schools, though in a few cases we highlight specific issues related to nonclassroom-based charter schools and virtual charter schools. Most significantly, we recommend the Legislature consider the following:
- Improvements to Oversight by Charter School Authorizers. We recommend the Legislature consider several changes to improve the quality of authorizer oversight. Specifically, we recommend the Legislature set limits on district authorizers by district size and grade, increase minimum requirements for authorizers, and consider an alternative authorizing structure for virtual schools.
- Enhancements to Charter School Audits. Current audit requirements often do not address the complexities and unique flexibilities of charter school finances. We recommend the Legislature align the audit process for charter schools to that of school districts and add audit requirements that would address issues specific to charter schools.
State Controller's Charter School Audits Task Force. In response to the A3 Charter School fraud case, a San Diego Superior Court Judge signed a court order to approve the formation of a multi-agency task force, known as the Multi-Agency Charter School Audits Task Force lead by the SCO to combat charter school fraud. The 2024 Task Force extensively discussed the current state of California charter schools and developed recommendations based on the combined expertise, experience, and knowledge of multi-disciplinary Task Force members. These recommendations are intended to foster a culture of transparency and accountability by further strengthening charter school audit function components. The recommendations are organized into the following sections of this report:
- Certified Public Accountant Firm Authorization, Qualifications, Training, Evaluation, and Compliance with K-12 Audit Guide;
- Certified Public Accountant Firm Selection, Rotation, and Late Audit Report Notifications:
- K-12 Audit Guide Procedures; and
- Financial Statement Audit Report Disclosures.
The Task Force determined that most of the recommendations should be applied to all LEAs including school districts, county offices of education (COEs), and charter schools, providing opportunities to strengthen the audit functions across the entire local education agency system. To combat fraud in charter schools, it is important that oversight agencies, in addition to those performing charter school audit functions, implement strong internal and monitoring controls to timely identify and mitigate potential fraud. The control and monitoring functions include the charter school petition and approval process, the charter school accountability systems, the authorizer monitoring of charter schools, and the respective oversight functions of the charter school governing board, COE, the CDE, and the SCO.
Authorizer oversight. Charter school authorizers play a vital role in providing oversight over both the academic and fiscal aspects of the charter schools they authorize. In order to provide better oversight, this bill requires increased targeted oversight by authorizers in the following areas:
- Attendance accounting;
- Pupil-to-teacher ratios;
- Percentage of pupils engaged in classroom-based instruction; and
- Audit compliance monitoring.
Charter school authorizers have very few resources for technical assistance and support of their charter authorizing and oversight work. This bill proposes to re-establish the Charter Authorizing Support Team, managed by the FCMAT. This program will provide the necessary training and technical assistance that charter authorizers need as they consider charter school petitions and provide meaningful oversight of the charter schools they authorize.
According to the Author
"Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom-based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 LAO/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools."
Arguments in Support
The California School Employees Association (CSEA) states, "The CSEA supports Assembly Bill (AB) 84 (Muratsuchi), our sponsored legislation to implement comprehensive reforms to nonclassroom-based charter (NCB) law aligned with the recommendations issued by the LAO/FCMAT, the Multi-Agency Charter School Audits Task Force, and the California Charter Authorizing Professionals.
In 2019, the San Diego County District Attorney charged eleven people in a $400 million fraud scheme involving the nonprofit NCB charter operator A3 Education. A3's leadership—Sean McManus and Jason Schrock—pulled off what has become known as one of the biggest charter school scandals in U.S. history by exploiting gaps in the law and deficiencies in charter authorizer oversight.
A3 fraudulently enrolled students who never actually took any classes in their schools by hiring enrollment workers to contact youth athletic organizations. A3 pledged to donate money to the athletic programs in exchange for each student who signed up and pocketed the difference—totaling as much as $1,550 per child. The charter management organization (CMO) avoided scrutiny for their practices by seeking small school districts without adequate oversight staff to be their authorizers. McManus and Schrock exerted total control over their network of schools by acting as both the administrators of the online schools as well as a vendor providing back-end business services.
The A3 case clearly exemplifies how California’s existing system of oversight for NCB charters—carried out by public authorizers, annual financial audits, and the SBE through its NCB funding determination process—is woefully inadequate. That is why the Legislature in 2019 issued a moratorium on the establishment of any new NCB charters in California. This moratorium gave time for experts from the LAO and FCMAT to investigate these issues and propose comprehensive solutions. In addition, San Diego Superior Court Judge Robert C. Longstreth ordered the State Controller to chair a multi-agency task force to develop audit criteria and best practices for detecting and curtailing future fraud in charter schools. With the NCB charter moratorium set to expire in January 2026, the Legislature must act this year to strengthen our laws and prevent another case like A3."
Arguments in Opposition
Excel Academy states, "State funding policy must prioritize and uphold the truth that all students have equal value and deserve and warranty equal funding regardless of the type of school they choose, whether county office operated, district operated, or public charter school operated, and must be supported through equal opportunity to choose the type of learning model and program that best matches their needs and interests. State funding policy must never discriminate against students who choose alternative education models other than a physical classroom model that are a better match for them, nor should public funding policy pick winners and losers among students.
As currently written, AB 84 will severely limit educational choices and result in significant harm to high quality NCB public charter school students and schools at a time when more choices in the public school system can help meet the needs of underserved students."
FISCAL COMMENTS
According to the Assembly Appropriations Committee,
- Ongoing Proposition 98 General Fund costs of an unknown but significant amount, likely in the millions of dollars to tens of millions of dollars statewide, for LEAs, especially charter schools, to comply with the various requirements added by this bill.
This bill makes several changes to charter school audit, teacher qualification, and teacher salary requirements. There are nearly 1,300 charter schools in the state. For audits, each LEA contracts with an independent auditing firm to conduct its annual audit verifying compliance with state law via the K-12 Audit Guide. As statutory requirements for LEAs increase and continue to add procedures, independent auditing firms increase costs charged to LEAs to account for increased workload. If an auditing firm increases its contracted costs to a charter school by $500 per year to account for requirements added by this bill, the bill creates $650,000 in new costs.
- Ongoing Proposition 98 General Fund cost pressures of an unknown amount, likely in the hundreds of thousands of dollars, to establish and staff the Charter Authorizing Support Team.
- Ongoing General Fund costs of an unknown but potentially significant amount, likely in the low millions of dollars to low tens of millions of dollars, to establish and staff the Office of Inspector General under the supervision of the SBE.
- Ongoing General Fund costs of an unknown amount, likely in the high hundreds of thousands of dollars to low millions of dollars for the SCO to hire additional staff responsible for conducting independent auditor quality control reviews.
- One-time General Fund costs of an unknown amount, likely in the hundreds of thousands of dollars, for the CDE to prepare the required report to the Legislature regarding integrating CALPADS and ADA data reporting systems.
- Minor and absorbable costs to the CTC.
VOTES
ASM EDUCATION: 7-2-0
YES: Muratsuchi, Addis, Alvarez, Bonta, Garcia, Lowenthal, Patel
NO: Hoover, Castillo
ASM APPROPRIATIONS: 10-3-2
YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pellerin, Solache
NO: Dixon, Ta, Tangipa
ABS, ABST OR NV: Sanchez, Pacheco
UPDATED
VERSION: June 3, 2025
CONSULTANT: Chelsea Kelley / ED. / (916) 319-2087 FN: 0000973
ASSEMBLY THIRD READING
ATR Bill Id:AB 84
Author:(Muratsuchi and Garcia)
As Amended Ver:June 2, 2025
Majority vote
SUMMARY
Establishes new requirements for charter schools in the areas of auditing and accounting standards, the funding determination process, contracting process, authorization of NCB charters by small districts, and the authorizer oversight process.
Major Provisions
Audit and Accounting Standards
- Requires training for local educational agency (LEA) auditors, requires LEA audits to be peer reviewed, and requires the State Controller's Office (SCO) to perform quality control reviews, as specified.
- Requires the K-12 audit guide to include schedules on pupil enrollment, pupil attendance, the 25 largest monetary transfers, pupil-to-teacher ratios, related loans, the expense of education, charter oversight expenses; and include audit instructions on sample section, materiality, enrollment, charter authority input, related parties, and classroom-based instruction verification.
NCB Charter School Funding Determination
- Maintains the existing funding determination process through the State Board of Education (SBE) and implements transparency measures including requiring networks of nonclassroom based charters to apply for their funding determination at the same time.
Charter School Contracts
- Prohibits private religious organizations or schools from serving as contractors.
- Requires charter schools to participate in competitive bidding of contracts in the same manner as school districts.
- Prohibits Local Control Funding Formula (LCFF) funding from paying for instructional programs not offered by a credentialed teacher.
Staff Training
- Requires staff that provide direct services to students (School Counselors, School Psychologists, School Nurses, Librarians, and Student Attendance Clerks), administrators, as well as contractors who provide direct services to students that count toward instructional minutes to hold an appropriate credential, as is the case for school districts.
School District Authorizers
- Permits school districts with less than 10,000 in Average Daily Attendance (ADA) to authorize NCB charters up to 100% of district ADA. Authorizes a school district with at least four executive level staff, to authorize NCB charter schools above 100% of the district ADA.
Authorizer Oversight and Oversight Fees for Charter Schools
- Establishes the Charter Authorizing Support Team at the Fiscal Crisis and Management Assistance Team (FCMAT).
- Permits authorizers to appeal to the State Board if the actual costs of oversight are above 1%.
NCB charter school Moratorium
- Sunsets the moratorium on NCB charter schools as of December 31, 2025.
COMMENTS
What is nonclassroom-based instruction? Nonclassroom-based instruction includes computer-based instruction using software modules, teacher-directed independent study, and traditional homeschool parents who enroll their children in independent study charter school programs.
A nonclassroom-based charter school is defined as a school with less than 80% of its total ADA that is classroom based, in which instruction takes place in a classroom setting. As of April 2021, there were 304 charter schools considered to be NCB. Of that number, 105 charter schools self-identified as providing exclusively virtual or primarily virtual instruction.
Existing law defines charter school nonclassroom-based instruction as instruction that does not meet the requirements of classroom-based instruction:
- Charter school pupils are engaged in required educational activities and are under the immediate supervision and control of a certificated teacher;
- At least 80% of the instructional time offered by the charter school is at the schoolsite (defined as a facility that is used primarily for classroom instruction); and
- Pupil attendance at the schoolsite is required for at least 80% of the minimum instructional time.
Recent A3 Charter Schools fraud case reveals significant weaknesses in nonclassroom-based charter school law. Numerous charter school fraud cases have been documented in recent years including, but not limited to: A3 Charter Schools, Magnolia Charter School, Tri-Valley Learning Corporation, among others.
In People v. McManus the San Diego County District Attorney's Office indicted 11 defendants in a fraud scheme involving nineteen charter schools (A3 Charter Schools). The case revealed many weaknesses in state public charter school law in the areas of pupil data tracking, auditing, school finance, and oversight, which resulted in A3 schools surrendering more than $210 million, 13 houses, and numerous shares in third-party companies. These weaknesses include:
- Lack of pupil data tracking. Currently, charter schools submit aggregate attendance data for each school without any information about individual pupils. Oversight agencies do not maintain individual pupil data about enrollments in charter schools they oversee for state funding purposes. One A3 charter school was found to be paying a private company to recruit and collect personal information from pupil athletes. The school then enrolled the athletes in the charter school without their knowledge—thereby fraudulently generating ADA—and paid the recruiting company a portion of the public funds generated as a finder's fee.
- Multi-track calendar abuses. The A3 schools were found to have deceived the state into paying them significantly more funds by manipulating the "multi-track year round calendar," which charter schools are currently authorized to use. The A3 schools would (1) run a fake summer school to collect funding for pupils that never knowingly enrolled, (2) inflate their fraudulent summer school attendance numbers—to the tune of about 60%—by offering fewer days of fake summer school instruction, and (3) transfer pupils between different A3 schools, increasing attendance fraudulently by another roughly 40%.
- Lack of meaningful audit requirements. The annual audits required by law found little to no malpractice by A3 schools, for several reasons. First, auditors are not required to complete any specialized up-front or ongoing training in school finance or law to audit a charter school. Second, charter schools can choose their auditors—A3 schools were shown to have fired their auditing firms and hired less experienced firms in the rare event that audit findings were made. Third, NCB charter schools are allowed to pick their own samples of pupil documentation showing compliance with independent study laws—enabling A3 to hide the fraudulent aspects of their operation from auditors. Fourth, auditors are not required to audit the education program received by pupils, only compliance with documentation. In the A3 schools, many children were enrolled from sports teams, believing they were participating in a fundraiser and had no knowledge they were enrolled in a charter school at all.
- Flawed funding determination process. While existing law requires that NCB charter schools only receive full funding in exceptional circumstances—when at least 80% of funding is spent directly serving pupils—the current funding determination process essentially funds all NCB schools at 100%. This is because existing regulations define "instructional and related services" very broadly, and charter schools can meet these spending benchmarks without necessarily spending money on pupils. Further, NCB charter schools are only required to request a funding determination and provide compliance documentation to the SBE every five years.
- Perverse financial incentives for charter school authorizers. Existing law allows charter authorizers to collect oversight fees from charter schools under their authority but does not require authorizers to demonstrate that the fees are spent on meaningful school oversight. Small school districts that approve NCB charter schools serving pupils not located in the district can earn significant oversight fees—creating a built-in incentive to overlook poor charter school practices. For example, Dehesa Elementary School District approved over ten charter schools all providing NCB programs. The district’s oversight fees for the 2017-2018 school year were more than its entire expenditures for all employees hired by the district. When the district learned of improprieties from their charter schools it took no meaningful action. Ultimately, the district collected the oversight fees and only acted to revoke the A3 Charter Schools under its authority once law enforcement was involved.
Some charter schools allow parents to direct LCFF dollars. Some NCB charter schools cater to families that have the parent serve as the primary person delivering instruction and these schools allow parents to direct how their children's LCFF dollars are spent.
As of April 2025, the South Sutter Charter School's website states, "For the 2024/25 school year, family accounts are funded up to the following amounts:
- $4,150 – High School;
- $3,650 – 1st-8th Grade; and
- $2,650 – TK-K Grade.”
Arete Charter Academy's list of vendors includes, but is not limited to:
- Horsemanship;
- Swim Lessons;
- CrossFit training;
- Golf Pro Lessons;
- Music Lessons;
- Tutoring Services;
- Dance Lessons; and
- Cooking Lessons.
Funding determination. As noted earlier in this analysis, NCB charter schools are required to obtain a funding determination that is approved by the SBE. This funding determination establishes the percentage of funding the NCB charter school will receive compared to all other traditional classroom based schools. Most charter schools apply for a 100% NCB funding determination. To do so, they must meet the following criteria:
- Spend at least 40% of total public revenue on instructional certificated salary and benefits;
- Spend at least 80% of total public revenue on instruction related services; and,
- Not exceed a 25:1 pupil to teacher ratio.
LAO/FCMAT Review of NCB Charter Funding Determination Process. In their 2024 report to the Legislature, the Legislative Analyst Office (LAO) and FCMAT made the following recommendations:
Recommend Several Changes to Improve Funding Determination Process. We provide several specific recommendations the Legislature could enact to improve the funding determination process. Our recommendations are intended to narrow the process to a smaller subset of schools, improve the comprehensiveness and quality of data submitted to CDE, and streamline some aspects of the process. Most significantly, we recommend the Legislature:
- Narrow the Definition of a Nonclassroom-Based Charter School. We recommend narrowing the definition of a nonclassroom-based charter school so that the designation excludes those schools that provide the majority of their instruction in person. This would exclude charter schools whose programs have cost structures that are similar to traditional classroom-based programs.
- Improve Quality of Data Submitted to the CDE. To assist the CDE in efficiently reviewing and processing funding determination forms, we recommend requiring data submitted by charter schools be consistent with their annual audits. We also recommend several changes that would require information submitted to the CDE be subject to annual audits.
- Use Multiple Years of Data for Funding Determinations. We recommend the funding determinations take into consideration a school’s aggregate spending for all years since the previous funding determination. This would ensure school expenditures are aligned with the funding determination thresholds consistently over time.
Consider Changes to Charter School Oversight. We also provide several recommendations for the Legislature to consider regarding broader oversight of charter schools. These issues generally apply to all charter schools, though in a few cases we highlight specific issues related to nonclassroom-based charter schools and virtual charter schools. Most significantly, we recommend the Legislature consider the following:
- Improvements to Oversight by Charter School Authorizers. We recommend the Legislature consider several changes to improve the quality of authorizer oversight. Specifically, we recommend the Legislature set limits on district authorizers by district size and grade, increase minimum requirements for authorizers, and consider an alternative authorizing structure for virtual schools.
- Enhancements to Charter School Audits. Current audit requirements often do not address the complexities and unique flexibilities of charter school finances. We recommend the Legislature align the audit process for charter schools to that of school districts and add audit requirements that would address issues specific to charter schools.
State Controller's Charter School Audits Task Force. In response to the A3 Charter School fraud case, a San Diego Superior Court Judge signed a court order to approve the formation of a multi-agency task force, known as the Multi-Agency Charter School Audits Task Force lead by the SCO to combat charter school fraud. The 2024 Task Force extensively discussed the current state of California charter schools and developed recommendations based on the combined expertise, experience, and knowledge of multi-disciplinary Task Force members. These recommendations are intended to foster a culture of transparency and accountability by further strengthening charter school audit function components. The recommendations are organized into the following sections of this report:
- Certified Public Accountant Firm Authorization, Qualifications, Training, Evaluation, and Compliance with K-12 Audit Guide;
- Certified Public Accountant Firm Selection, Rotation, and Late Audit Report Notifications:
- K-12 Audit Guide Procedures; and
- Financial Statement Audit Report Disclosures.
The Task Force determined that most of the recommendations should be applied to all LEAs including school districts, county offices of education (COEs), and charter schools, providing opportunities to strengthen the audit functions across the entire local education agency system. To combat fraud in charter schools, it is important that oversight agencies, in addition to those performing charter school audit functions, implement strong internal and monitoring controls to timely identify and mitigate potential fraud. The control and monitoring functions include the charter school petition and approval process, the charter school accountability systems, the authorizer monitoring of charter schools, and the respective oversight functions of the charter school governing board, COE, the CDE, and the SCO.
Authorizer oversight and oversight fees. Charter school authorizers play a vital role in providing oversight over both the academic and fiscal aspects of the charter schools they authorize. In order to provide better oversight, this bill requires increased targeted oversight by authorizers in the following areas:
- Attendance accounting;
- Pupil-to-teacher ratios;
- Percentage of pupils engaged in classroom-based instruction; and
- Audit compliance monitoring.
In order to compensate authorizers for these increased oversight responsibilities this bill permits authorizer’s to seek approval from the SBE if the actual costs of oversight exceed 1% of the charter school’s revenue (current law). These oversight fees will be included in a separate audit schedule in the school district’s annual audit.
Charter school authorizers have very few resources for technical assistance and support of their charter authorizing and oversight work. This bill proposes to re-establish the Charter Authorizing Support Team, managed by the FCMAT. This program will provide the necessary training and technical assistance that charter authorizers need as they consider charter school petitions and provide meaningful oversight of the charter schools they authorize.
According to the Author
"Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom-based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
One example of such fraud includes People v. McManus, where the San Diego County District Attorney's Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 LAO/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools."
Arguments in Support
The California School Employees Association (CSEA) states, "The CSEA supports Assembly Bill (AB) 84 (Muratsuchi), our sponsored legislation to implement comprehensive reforms to nonclassroom-based charter (NCB) law aligned with the recommendations issued by the LAO/FCMAT, the Multi-Agency Charter School Audits Task Force, and the California Charter Authorizing Professionals.
In 2019, the San Diego County District Attorney charged eleven people in a $400 million fraud scheme involving the nonprofit NCB charter operator A3 Education. A3's leadership—Sean McManus and Jason Schrock—pulled off what has become known as one of the biggest charter school scandals in U.S. history by exploiting gaps in the law and deficiencies in charter authorizer oversight.
A3 fraudulently enrolled students who never actually took any classes in their schools by hiring enrollment workers to contact youth athletic organizations. A3 pledged to donate money to the athletic programs in exchange for each student who signed up and pocketed the difference—totaling as much as $1,550 per child. The charter management organization (CMO) avoided scrutiny for their practices by seeking small school districts without adequate oversight staff to be their authorizers. McManus and Schrock exerted total control over their network of schools by acting as both the administrators of the online schools as well as a vendor providing back-end business services.
The A3 case clearly exemplifies how California's existing system of oversight for NCB charters—carried out by public authorizers, annual financial audits, and the SBE through its NCB funding determination process—is woefully inadequate. That is why the Legislature in 2019 issued a moratorium on the establishment of any new NCB charters in California. This moratorium gave time for experts from the LAO and FCMAT to investigate these issues and propose comprehensive solutions. In addition, San Diego Superior Court Judge Robert C. Longstreth ordered the State Controller to chair a multi-agency task force to develop audit criteria and best practices for detecting and curtailing future fraud in charter schools. With the NCB charter moratorium set to expire in January 2026, the Legislature must act this year to strengthen our laws and prevent another case like A3.”
Arguments in Opposition
Excel Academy states, "State funding policy must prioritize and uphold the truth that all students have equal value and deserve and warranty equal funding regardless of the type of school they choose, whether county office operated, district operated, or public charter school operated, and must be supported through equal opportunity to choose the type of learning model and program that best matches their needs and interests. State funding policy must never discriminate against students who choose alternative education models other than a physical classroom model that are a better match for them, nor should public funding policy pick winners and losers among students.
As currently written, AB 84 will severely limit educational choices and result in significant harm to high quality NCB public charter school students and schools at a time when more choices in the public school system can help meet the needs of underserved students."
FISCAL COMMENTS
According to the Assembly Appropriations Committee,
- Ongoing Proposition 98 General Fund costs of an unknown but significant amount, likely in the millions of dollars to tens of millions of dollars statewide, for LEAs, especially charter schools, to comply with the various requirements added by this bill.
This bill makes several changes to charter school audit, teacher qualification, and teacher salary requirements. There are nearly 1,300 charter schools in the state. For audits, each LEA contracts with an independent auditing firm to conduct its annual audit verifying compliance with state law via the K-12 Audit Guide. As statutory requirements for LEAs increase and continue to add procedures, independent auditing firms increase costs charged to LEAs to account for increased workload. If an auditing firm increases its contracted costs to a charter school by $500 per year to account for requirements added by this bill, the bill creates $650,000 in new costs.
- Ongoing Proposition 98 General Fund cost pressures of an unknown amount, likely in the hundreds of thousands of dollars, to establish and staff the Charter Authorizing Support Team.
- Ongoing General Fund costs of an unknown but potentially significant amount, likely in the low millions of dollars to low tens of millions of dollars, to establish and staff the Office of Inspector General under the supervision of the SBE.
- Ongoing General Fund costs of an unknown amount, likely in the high hundreds of thousands of dollars to low millions of dollars for the SCO to hire additional staff responsible for conducting independent auditor quality control reviews.
- One-time General Fund costs of an unknown amount, likely in the hundreds of thousands of dollars, for the CDE to prepare the required report to the Legislature regarding integrating CALPADS and ADA data reporting systems.
- Minor and absorbable costs to the CTC.
VOTES
ASM EDUCATION: 7-2-0
YES: Muratsuchi, Addis, Alvarez, Bonta, Garcia, Lowenthal, Patel
NO: Hoover, Castillo
ASM APPROPRIATIONS: 10-3-2
YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pellerin, Solache
NO: Dixon, Ta, Tangipa
ABS, ABST OR NV: Sanchez, Pacheco
UPDATED
VERSION: June 2, 2025
CONSULTANT: Chelsea Kelley / ED. / (916) 319-2087 FN: 0000961
ASSEMBLY THIRD READING
ATR Bill Id:AB 84
Author:(Muratsuchi and Garcia)
As Amended Ver:May 5, 2025
Majority vote
SUMMARY
Establishes new requirements for nonclassroom based (NCB) charter schools in the areas of auditing and accounting standards, the funding determination process, contracting process, authorization of NCB charters by small districts, and the authorizer oversight process.
Major Provisions
Audit and Accounting Standards
- Requires training for local educational agency (LEA) auditors, requires LEA audits to be peer reviewed, and requires the State Controller′s Office (SCO) to perform quality control reviews, as specified.
- Requires the K-12 audit guide to include schedules on pupil enrollment, pupil attendance, the 25 largest monetary transfers, pupil-to-teacher ratios, related loans, the expense of education, charter oversight expenses; and include audit instructions on sample section, materiality, enrollment, charter authority input, related parties, and classroom-based instruction verification.
NCB Charter School Funding Determination
- Establishes a funding formula for NCB charter schools based on the amount of in-classroom instruction provided to pupils.
Charter School Contracts
- Prohibits private religious organizations or schools from serving as contractors.
- Requires charter schools to participate in competitive bidding of contracts in the same manner as school districts.
- Prohibits Local Control Funding Formula (LCFF) funding from paying for instructional programs not offered by a credentialed teacher.
Staff Training
Requires staff that provide direct services to students (School Counselors, School Psychologists, School Nurses, Librarians, and Student Attendance Clerks), administrators, as well as contractors who provide direct services to students that count toward instructional minutes to hold an appropriate credential, as is the case for school districts.School District Authorizers
- Permits school districts with less than 10,000 in Average Daily Attendance (ADA) to authorize NCB charters up to 100% of district ADA. Authorizes a school district with at least four executive level staff, to authorize NCB charter schools above 100% of the district ADA.
Authorizer Oversight and Oversight Fees for Charter Schools
- Establishes the Charter Authorizing Support Team at the Fiscal Crisis and Management Assistance Team (FCMAT).
- Increases oversight responsibilities for charter school authorizers, and increases oversight fees to be the actual costs up to 3%.
NCB charter school Moratorium
- Sunsets the moratorium on NCB charter schools as of December 31, 2025.
COMMENTS
What is nonclassroom-based instruction? Nonclassroom-based instruction includes computer-based instruction using software modules, teacher-directed independent study, and traditional homeschool parents who enroll their children in independent study charter school programs.
A nonclassroom-based charter school is defined as a school with less than 80% of its total ADA that is classroom based, in which instruction takes place in a classroom setting. As of April 2021, there were 304 charter schools considered to be NCB. Of that number, 105 charter schools self-identified as providing exclusively virtual or primarily virtual instruction.
Existing law defines charter school nonclassroom-based instruction as instruction that does not meet the requirements of classroom-based instruction:
- Charter school pupils are engaged in required educational activities and are under the immediate supervision and control of a certificated teacher;
- At least 80% of the instructional time offered by the charter school is at the schoolsite (defined as a facility that is used primarily for classroom instruction); and
- Pupil attendance at the schoolsite is required for at least 80% of the minimum instructional time.
What does research say about pupil academic achievement at NCB charter and virtual schools? Research indicates that students at NCB charters and virtual schools achieve lower rates of academic achievement compared to students at classroom-based schools. One review notes, ″By any measure, online charter schools perform significantly worse than traditional public schools, and this negative impact carries across every demographic of pupils. So while online schools are indeed needed for pupils whose requirements cannot be met by brick-and-mortar schools, it′s clear that the quality of education offered by online charter schools is significantly below the state average. As public policy, legislators should be looking to limit the number of students in online charter schools and should resist calls to expand this sector.″ (Lafer, 2021)
A 2015 national analysis of NCB charter schools found, ″The differences were much larger between classroom-based and non-classroom-based charter schools with the nonclassroom-based charter schools having lower achievement. This result is consistent with a study of Ohio charter schools that found virtual schools performing poorly relative to traditional public schools (TPSs) and other charter schools (Zimmer, et al., 2009). It is consistent as well with findings for Pennsylvania, which has among the highest proportion of online charter pupils. The Center for Research on Education Outcomes (CREDO) (2011) report on Pennsylvania charter schools found that all eight cyber schools then operating performed significantly and substantially worse on both mathematics and reading than traditional public schools.″ (Epple, et al., 2015)
Numerous studies indicate that online instruction is not as effective as regular classroom instruction:
- A 2019 study by the CREDO at Stanford University of charter schools in South Carolina concluded that students attending online charter schools have weaker growth in both reading and math compared to the average traditional public school. The gap translates to 35 and 118 fewer days of learning for online charter students in reading and math, respectively. In contrast, students in brick-and-mortar charters post academic progress in reading and math similar to that of the average traditional public school students.
- A CREDO study in 2019 of students in New Mexico attending online charter schools found those students to have substantially weaker growth in both reading and math than the average traditional public school students. The gaps translate to 130 fewer days of learning in reading and 118 fewer days of learning in math for online charter students. In contrast, students in brick-and-mortar charters exhibit stronger growth in reading (equivalent to 24 extra days of learning) and obtain similar learning gains in math as compared with the average traditional public school students.
- A CREDO study in 2019 of students in Ohio attending online charter schools found students to have substantially weaker growth in both reading and math than the average traditional public school students. The gaps translate to 47 fewer days of learning in reading and 136 fewer days of learning in math for online charter students. In contrast, students in brick-and-mortar charters exhibit stronger growth in reading (equivalent to 24 days of extra learning) and obtain similar learning gains in math as compared with the average traditional public school students.
- A CREDO study in 2019 of students in Pennsylvania attending online charter schools found students to have weaker growth in both reading and math compared to the average traditional public school. These gaps translate to 106 fewer days of learning in reading and 118 fewer days of learning in math. Students attending brick-and-mortar charter schools however exhibit positive growth in reading compared to the average traditional public school students, gaining about 24 days of learning. In math, brick-and-mortar charter school students perform similarly to the average traditional public school students.
Recent A3 Charter Schools fraud case reveals significant weaknesses in nonclassroom-based charter school law. Numerous charter school fraud cases have been documented in recent years including, but not limited to: A3 Charter Schools, Magnolia Charter School, Tri-Valley Learning Corporation, among others.
In People v. McManus the San Diego County District Attorney′s Office indicted 11 defendants in a fraud scheme involving nineteen charter schools (A3 Charter Schools). The case revealed many weaknesses in state public charter school law in the areas of pupil data tracking, auditing, school finance, and oversight, which resulted in A3 schools surrendering more than $210 million, 13 houses, and numerous shares in third-party companies. These weaknesses include:
- Lack of pupil data tracking. Currently, charter schools submit aggregate attendance data for each school without any information about individual pupils. Oversight agencies do not maintain individual pupil data about enrollments in charter schools they oversee for state funding purposes. One A3 charter school was found to be paying a private company to recruit and collect personal information from pupil athletes. The school then enrolled the athletes in the charter school without their knowledge—thereby fraudulently generating ADA—and paid the recruiting company a portion of the public funds generated as a finder′s fee.
- Multi-track calendar abuses. The A3 schools were found to have deceived the state into paying them significantly more funds by manipulating the ″multi-track year round calendar,″ which charter schools are currently authorized to use. The A3 schools would (1) run a fake summer school to collect funding for pupils that never knowingly enrolled, (2) inflate their fraudulent summer school attendance numbers—to the tune of about 60%—by offering fewer days of fake summer school instruction, and (3) transfer pupils between different A3 schools, increasing attendance fraudulently by another roughly 40%.
- Lack of meaningful audit requirements. The annual audits required by law found little to no malpractice by A3 schools, for several reasons. First, auditors are not required to complete any specialized up-front or ongoing training in school finance or law to audit a charter school. Second, charter schools can choose their auditors—A3 schools were shown to have fired their auditing firms and hired less experienced firms in the rare event that audit findings were made. Third, NCB charter schools are allowed to pick their own samples of pupil documentation showing compliance with independent study laws—enabling A3 to hide the fraudulent aspects of their operation from auditors. Fourth, auditors are not required to audit the education program received by pupils, only compliance with documentation. In the A3 schools, many children were enrolled from sports teams, believing they were participating in a fundraiser and had no knowledge they were enrolled in a charter school at all.
- Flawed funding determination process. While existing law requires that NCB charter schools only receive full funding in exceptional circumstances—when at least 80% of funding is spent directly serving pupils—the current funding determination process essentially funds all NCB schools at 100%. This is because existing regulations define ″instructional and related services″ very broadly, and charter schools can meet these spending benchmarks without necessarily spending money on pupils. Further, NCB charter schools are only required to request a funding determination and provide compliance documentation to the SBE every five years.
- Perverse financial incentives for charter school authorizers. Existing law allows charter authorizers to collect oversight fees from charter schools under their authority but does not require authorizers to demonstrate that the fees are spent on meaningful school oversight. Small school districts that approve NCB charter schools serving pupils not located in the district can earn significant oversight fees—creating a built-in incentive to overlook poor charter school practices. For example, Dehesa Elementary School District approved over ten charter schools all providing NCB programs. The district′s oversight fees for the 2017-2018 school year were more than its entire expenditures for all employees hired by the district. When the district learned of improprieties from their charter schools it took no meaningful action. Ultimately, the district collected the oversight fees and only acted to revoke the A3 Charter Schools under its authority once law enforcement was involved.
Some charter schools allow parents to direct LCFF dollars. Some NCB charter schools cater to families that have the parent serve as the primary person delivering instruction and these schools allow parents to direct how their children′s LCFF dollars are spent.
As of April 2025, the South Sutter Charter School′s website states, ″For the 2024/25 school year, family accounts are funded up to the following amounts:
- $4,150 – High School;
- $3,650 – 1st-8th Grade; and
- $2,650 – TK-K Grade.″
Arete Charter Academy′s list of vendors includes, but is not limited to:
- Horsemanship;
- Swim Lessons;
- CrossFit training;
- Golf Pro Lessons;
- Music Lessons;
- Tutoring Services;
- Dance Lessons; and
- Cooking Lessons.
Funding determination. As noted earlier in this analysis, NCB charter schools are required to obtain a funding determination that is approved by the SBE. This funding determination establishes the percentage of funding the NCB charter school will receive compared to all other traditional classroom based schools. Most charter schools apply for a 100% NCB funding determination. To do so, they must meet the following criteria:
- Spend at least 40% of total public revenue on instructional certificated salary and benefits;
- Spend at least 80% of total public revenue on instruction related services; and,
- Not exceed a 25:1 pupil to teacher ratio.
LAO/FCMAT Review of NCB Charter Funding Determination Process. In their 2024 report to the Legislature, the Legislative Analyst Office (LAO) and FCMAT made the following recommendations:
Recommend Several Changes to Improve Funding Determination Process. We provide several specific recommendations the Legislature could enact to improve the funding determination process. Our recommendations are intended to narrow the process to a smaller subset of schools, improve the comprehensiveness and quality of data submitted to CDE, and streamline some aspects of the process. Most significantly, we recommend the Legislature:
- Narrow the Definition of a Nonclassroom-Based Charter School. We recommend narrowing the definition of a nonclassroom-based charter school so that the designation excludes those schools that provide the majority of their instruction in person. This would exclude charter schools whose programs have cost structures that are similar to traditional classroom-based programs.
- Improve Quality of Data Submitted to the CDE. To assist the CDE in efficiently reviewing and processing funding determination forms, we recommend requiring data submitted by charter schools be consistent with their annual audits. We also recommend several changes that would require information submitted to the CDE be subject to annual audits.
- Use Multiple Years of Data for Funding Determinations. We recommend the funding determinations take into consideration a school′s aggregate spending for all years since the previous funding determination. This would ensure school expenditures are aligned with the funding determination thresholds consistently over time.
Consider Changes to Charter School Oversight. We also provide several recommendations for the Legislature to consider regarding broader oversight of charter schools. These issues generally apply to all charter schools, though in a few cases we highlight specific issues related to nonclassroom-based charter schools and virtual charter schools. Most significantly, we recommend the Legislature consider the following:
- Improvements to Oversight by Charter School Authorizers. We recommend the Legislature consider several changes to improve the quality of authorizer oversight. Specifically, we recommend the Legislature set limits on district authorizers by district size and grade, increase minimum requirements for authorizers, and consider an alternative authorizing structure for virtual schools.
- Enhancements to Charter School Audits. Current audit requirements often do not address the complexities and unique flexibilities of charter school finances. We recommend the Legislature align the audit process for charter schools to that of school districts and add audit requirements that would address issues specific to charter schools.
State Controller′s Charter School Audits Task Force. In response to the A3 Charter School fraud case, a San Diego Superior Court Judge signed a court order to approve the formation of a multi-agency task force, known as the Multi-Agency Charter School Audits Task Force lead by the SCO to combat charter school fraud. The 2024 Task Force extensively discussed the current state of California charter schools and developed recommendations based on the combined expertise, experience, and knowledge of multi-disciplinary Task Force members. These recommendations are intended to foster a culture of transparency and accountability by further strengthening charter school audit function components. The recommendations are organized into the following sections of this report:
- Certified Public Accountant Firm Authorization, Qualifications, Training, Evaluation, and Compliance with K-12 Audit Guide;
- Certified Public Accountant Firm Selection, Rotation, and Late Audit Report Notifications:
- K-12 Audit Guide Procedures; and
- Financial Statement Audit Report Disclosures.
The Task Force determined that most of the recommendations should be applied to all LEAs including school districts, county offices of education (COEs), and charter schools, providing opportunities to strengthen the audit functions across the entire local education agency system. To combat fraud in charter schools, it is important that oversight agencies, in addition to those performing charter school audit functions, implement strong internal and monitoring controls to timely identify and mitigate potential fraud. The control and monitoring functions include the charter school petition and approval process, the charter school accountability systems, the authorizer monitoring of charter schools, and the respective oversight functions of the charter school governing board, COE, the CDE, and the SCO.
Authorizer oversight and oversight fees. Charter school authorizers play a vital role in providing oversight over both the academic and fiscal aspects of the charter schools they authorize. In order to provide better oversight, this bill requires increased targeted oversight by authorizers in the following areas:
- Attendance accounting;
- Pupil-to-teacher ratios;
- Percentage of pupils engaged in classroom-based instruction; and
- Audit compliance monitoring.
In order to compensate authorizers for these increased oversight responsibilities this bill proposes to increase oversight fees from actual costs up to 1% of the charter school′s revenue (current law) to actual costs up to 3% of the charter school′s revenue. Further, these oversight fees will be included in a separate audit schedule in the school district′s annual audit.
Charter school authorizers have very few resources for technical assistance and support of their charter authorizing and oversight work. This bill proposes to re-establish the Charter Authorizing Support Team, managed by the FCMAT. This program will provide the necessary training and technical assistance that charter authorizers need as they consider charter school petitions and provide meaningful oversight of the charter schools they authorize.
According to the Author
″Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom-based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
One example of such fraud includes People v. McManus, where the San Diego County District Attorney′s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State′s education system in the areas of pupil data tracking, auditing, and school finance.
Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 LAO/FCMAT report to the Legislature and the Controller′s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.″
Arguments in Support
The California School Employees Association (CSEA) states, ″The CSEA supports Assembly Bill (AB) 84 (Muratsuchi), our sponsored legislation to implement comprehensive reforms to nonclassroom-based charter (NCB) law aligned with the recommendations issued by the LAO/FCMAT, the Multi-Agency Charter School Audits Task Force, and the California Charter Authorizing Professionals.
In 2019, the San Diego County District Attorney charged eleven people in a $400 million fraud scheme involving the nonprofit NCB charter operator A3 Education. A3′s leadership—Sean McManus and Jason Schrock—pulled off what has become known as one of the biggest charter school scandals in U.S. history by exploiting gaps in the law and deficiencies in charter authorizer oversight.
A3 fraudulently enrolled students who never actually took any classes in their schools by hiring enrollment workers to contact youth athletic organizations. A3 pledged to donate money to the athletic programs in exchange for each student who signed up and pocketed the difference—totaling as much as $1,550 per child. The charter management organization (CMO) avoided scrutiny for their practices by seeking small school districts without adequate oversight staff to be their authorizers. McManus and Schrock exerted total control over their network of schools by acting as both the administrators of the online schools as well as a vendor providing back-end business services.
The A3 case clearly exemplifies how California′s existing system of oversight for NCB charters—carried out by public authorizers, annual financial audits, and the SBE through its NCB funding determination process—is woefully inadequate. That is why the Legislature in 2019 issued a moratorium on the establishment of any new NCB charters in California. This moratorium gave time for experts from the LAO and FCMAT to investigate these issues and propose comprehensive solutions. In addition, San Diego Superior Court Judge Robert C. Longstreth ordered the State Controller to chair a multi-agency task force to develop audit criteria and best practices for detecting and curtailing future fraud in charter schools. With the NCB charter moratorium set to expire in January 2026, the Legislature must act this year to strengthen our laws and prevent another case like A3.″
Arguments in Opposition
Excel Academy states, ″State funding policy must prioritize and uphold the truth that all students have equal value and deserve and warranty equal funding regardless of the type of school they choose, whether county office operated, district operated, or public charter school operated, and must be supported through equal opportunity to choose the type of learning model and program that best matches their needs and interests. State funding policy must never discriminate against students who choose alternative education models other than a physical classroom model that are a better match for them, nor should public funding policy pick winners and losers among students.
As currently written, AB 84 will severely limit educational choices and result in significant harm to high quality NCB public charter school students and schools at a time when more choices in the public school system can help meet the needs of underserved students.″
FISCAL COMMENTS
According to the Assembly Appropriations Committee,
- Ongoing Proposition 98 General Fund costs of an unknown but significant amount, likely in the millions of dollars to tens of millions of dollars statewide, for LEAs, especially charter schools, to comply with the various requirements added by this bill.
This bill makes several changes to charter school audit, teacher qualification, and teacher salary requirements. There are nearly 1,300 charter schools in the state. For audits, each LEA contracts with an independent auditing firm to conduct its annual audit verifying compliance with state law via the K-12 Audit Guide. As statutory requirements for LEAs increase and continue to add procedures, independent auditing firms increase costs charged to LEAs to account for increased workload. If an auditing firm increases its contracted costs to a charter school by $500 per year to account for requirements added by this bill, the bill creates $650,000 in new costs.
- Ongoing Proposition 98 General Fund cost pressures of an unknown amount, likely in the hundreds of thousands of dollars, to establish and staff the Charter Authorizing Support Team.
- Ongoing General Fund costs of an unknown but potentially significant amount, likely in the low millions of dollars to low tens of millions of dollars, to establish and staff the Office of Inspector General under the supervision of the SBE.
- Ongoing General Fund costs of an unknown amount, likely in the high hundreds of thousands of dollars to low millions of dollars for the SCO to hire additional staff responsible for conducting independent auditor quality control reviews.
- One-time General Fund costs of an unknown amount, likely in the hundreds of thousands of dollars, for the CDE to prepare the required report to the Legislature regarding integrating CALPADS and ADA data reporting systems.
- Minor and absorbable costs to the CTC.
VOTES
ASM EDUCATION: 7-2-0
YES: Muratsuchi, Addis, Alvarez, Bonta, Garcia, Lowenthal, Patel
NO: Hoover, Castillo
ASM APPROPRIATIONS: 10-3-2
YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pellerin, Solache
NO: Dixon, Ta, Tangipa
ABS, ABST OR NV: Sanchez, Pacheco
UPDATED
VERSION: May 5, 2025
CONSULTANT: Chelsea Kelley / ED. / (916) 319-2087 FN: 0000652
Date of Hearing: May 14, 2025
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
ABPCA Bill Id:AB 84
Author:(Muratsuchi) – As Amended Ver:May 5, 2025
Policy Committee: | Education | Vote: | 7 - 2 |
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Urgency: No State Mandated Local Program: Yes Reimbursable: Yes
SUMMARY:
This bill establishes new requirements for charter schools and nonclassroom based (NCB) charter schools regarding auditing and accounting standards, and the funding determination process. This bill adds requirements to the contracting process, limits authorization of NCB charter schools by small school districts, makes changes to the authorizer oversight process, and clarifies that charter schools are subject to specified teacher credential and salary expense requirements.
Specifically, this bill:
- Requires training for local educational agency (LEA) auditors, peer review of LEA audits, and the State Controller’s Office (SCO) to perform quality control reviews, as specified.
- Adds various requirements prescribing specific procedures for addition to the K-12 Audit Guide.
- Requires a charter school to follow the same audit procedures and audit schedules, and use the same Standardized Account Code Structure (SACS), as a school district.
- Creates the Office of Inspector General under the supervision of the State Board of Education (SBE), appointed by the Governor.
- Establishes a funding formula for an NCB charter school based on the amount of in-classroom instruction provided to pupils.
- Prohibits a private religious organization or school from serving as a charter school contractor.
- Requires a charter school to participate in competitive bidding of contracts in the same manner as a school district.
- Prohibits a charter school contract from being calculated as a percentage of charter school apportionment.
- Prohibits a charter school from paying for instructional programs not offered by a credentialed teacher.
- Prohibits employee compensation based on vendor contracts, student attendance or course completion.
- Requires charter school staff that provide direct services to students (School Counselors and Psychologists, School Nurses, Librarians, and Student Attendance Clerks), administrators, as well as contractors who provide direct services to students that count toward instructional minutes, to hold an appropriate credential, in the same manner as school district staff.
- Requires the California Department of Education (CDE) to study the feasibility of connecting the California Longitudinal Pupil Achievement Data System (CALPADS) and the attendance accounting system.
- Updates calculations for charter school pupil-to-teacher ratios in an independent study program.
- Places specific prohibitions on NCB charter authorization based on district size.
- Directs the SBE to reassign NCB charters authorized by small districts to larger district authorizers within the county or the County Office of Education (COE), upon their next renewal.
- Includes in the definition of state receivership the probationary period following loan repayment for a school district in qualified budget status.
- Establishes the Charter Authorizing Support Team at the Fiscal Crisis and Management Assistance Team (FCMAT).
- Requires charter school authorizers to annually perform oversight responsibilities for charter schools regarding verifications of classroom-based instruction, average-daily-attendance (ADA)-to-certificated-teacher ratios, enrollment and attendance trends, and audit compliance.
- Permits a charter authorizer to charge oversight fees not to exceed actual costs up to 2% for the 2028-29 fiscal year; and, effective July 1, 2029, permits a charter authorizer to charge oversight fees not to exceed actual costs up to 3%.
- Sunsets the moratorium on NCB charter schools as of December 31, 2025.
- Provides an exemption for an NCB charter school in operation before December 31, 2025 that exceeds the ADA threshold for small district authorizers to continue authorization under their existing authorizer under specified criteria.
- Requires that COE program dependent charter have no adjustment made to their funding determination.
- Subjects a charter school to fiscal penalty for noncompliance with credentialed teacher requirements, similar to a school district, and subjects a charter school to similar teacher salary expense requirements as a school district.
FISCAL EFFECT:
- Ongoing Proposition 98 General Fund costs of an unknown but significant amount, likely in the millions of dollars to tens of millions of dollars statewide, for LEAs, especially charter schools, to comply with the various requirements added by this bill.
This bill makes several changes to charter school audit, teacher qualification, and teacher salary requirements. There are nearly 1,300 charter schools in the state. For audits, each LEA contracts with an independent auditing firm to conduct its annual audit verifying compliance with state law via the K-12 Audit Guide. As statutory requirements for LEAs increase and continue to add procedures, independent auditing firms increase costs charged to LEAs to account for increased workload. If an auditing firm increases its contracted costs to a charter school by $500 per year to account for requirements added by this bill, the bill creates $650,000 in new costs.
- Ongoing Proposition 98 General Fund cost pressures of an unknown amount, likely in the hundreds of thousands of dollars, to establish and staff the Charter Authorizing Support Team.
- Ongoing General Fund costs of an unknown but potentially significant amount, likely in the low millions of dollars to low tens of millions of dollars, to establish and staff the Office of Inspector General under the supervision of the SBE.
- Ongoing General Fund costs of an unknown amount, likely in the high hundreds of thousands of dollars to low millions of dollars for the SCO to hire additional staff responsible for conducting independent auditor quality control reviews.
- One-time General Fund costs of an unknown amount, likely in the hundreds of thousands of dollars, for the CDE to prepare the required report to the Legislature regarding integrating CALPADS and ADA data reporting systems.
- Minor and absorbable costs to the CTC.
COMMENTS:
- Purpose. According to the author:
Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.
- Background. Charter Schools. According to the CDE, as of the 2024-25 school year, there are 1,280 active charter schools in California, with an enrollment of over 709,000 pupils. Some charter schools are new, while others are conversions from existing public schools. Charter schools are part of the state's public education system and receive apportionment from state funds pursuant to the Local Control Funding Formula (LCFF) and other programs similar to school districts. Typically, a group of teachers, parents, community leaders, a community-based organization, or an education management organization petitions to create a charter school. Only school district governing boards or county boards of education may authorize charter schools. Current law exempts charter schools from most laws governing school districts, except where specifically noted in the law. A charter schools agreement between the authorizing board and charter organizers (its “charter”) details specific goals and operating procedures for the charter school.
Nonclassroom Based Charter Schools. Current law defines charter school nonclassroom based instruction as instruction that does not meet the requirements of classroom-based instruction. Those requirements are:
- Charter school pupils are engaged in required educational activities and are under the immediate supervision and control of a certificated teacher.
- At least 80% of the instructional time offered by the charter school is at the schoolsite (defined as a facility that is used primarily for classroom instruction).
- The school requires pupil attendance at the schoolsite for at least 80% of the minimum instructional time.
Nonclassroom based instruction includes computer-based instruction using software modules, teacher-directed independent study, and traditional homeschool parents who enroll their children in independent study charter school programs. As of April 2021, there were 304 charter schools considered to be NCB. Of that number, 105 charter schools self-identified as providing exclusively virtual or primarily virtual instruction.
Numerous studies indicate that online instruction is not as effective as regular classroom instruction. Additionally, research indicates that students at NCB charters and virtual schools achieve lower rates of academic achievement compared to students at classroom-based schools. One review, “Costly Failure: California is Overpaying for Online Charter Schools that are Failing Students,” published in 2021 by In the Public Interest, notes the following:
By any measure, online charter schools perform significantly worse than traditional public schools, and this negative impact carries across every demographic of pupils. So while online schools are indeed needed for pupils whose requirements cannot be met by brick-and-mortar schools, it’s clear that the quality of education offered by online charter schools is significantly below the state average. As public policy, legislators should be looking to limit the number of students in online charter schools and should resist calls to expand this sector.
Recent Incidences of Fraud. Several charter school fraud cases have occured in recent years including, but not limited to: A3 Charter Schools, Magnolia Charter School, and Tri-Valley Learning Corporation, among others.
In People v. McManus the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen charter schools (A3 Charter Schools). The case revealed many weaknesses in state public charter school law in the areas of pupil data tracking, auditing, school finance, and oversight, which resulted in A3 schools surrendering more than $210 million, 13 houses, and numerous shares in third-party companies.
This bill creates the Office of Education Inspector General within the SBE. The bill provides the office with subpoena authority and authorizes it to conduct and supervise audits and investigations of the CDE and LEAs, provide recommendations for fraud and abuse prevention policies, and alert the SBE and Legislature of necessary corrective actions for the CDE or LEAs.
State Controller’s Office Task Force and LAO/FCMAT NCB Report. In response to the A3 Charter School fraud case, a San Diego Superior Court Judge signed a court order to approve the formation of a multi-agency task force, known as the Multi-Agency Charter School Audits Task Force lead by the SCO to combat charter school fraud. The 2024 Task Force report made several recommendations in the areas of LEA independent auditor training, qualifications, and evaluation, late audit report notifications, K-12 Audit Guide procedures, and charter school financial statement disclosure requirements.
Regarding charter school audits, current law allows a charter school to be audited as nonprofit corporations rather than as governmental entities. Nonprofit corporation audits do not have the same level of detailed requirements as governmental entity audits. This bill aligns several charter schools and school districts audit requirements and schedules with the intent of making charter school audits more similar to those of school districts. The bill also requires charter schools use the Standardized Account Code Structure required of school districts.
In 2024, the LAO and FCMAT jointly furnished a report to the Legislature regarding NCB charter schools and the Funding Determination process. The report provides several specific recommendations the Legislature could enact to improve the funding determination process. The LAO and FCMAT state their “recommendations are intended to narrow the process to a smaller subset of schools, improve the comprehensiveness and quality of data submitted to CDE, and streamline some aspects of the process.” Among other things, the report recommends consideration of two elements of charter school oversight:
Improvements to Oversight by Charter School Authorizers. We recommend the Legislature consider several changes to improve the quality of authorizer oversight. Specifically, we recommend the Legislature set limits on district authorizers by district size and grade, increase minimum requirements for authorizers, and consider an alternative authorizing structure for virtual schools.
Enhancements to Charter School Audits. Current audit requirements often do not address the complexities and unique flexibilities of charter school finances. We recommend the Legislature align the audit process for charter schools to that of school districts and add audit requirements that would address issues specific to charter schools.
This bill allows charter authorizers to charge the actual cost of oversight, up to 2% in the 2028-29 fiscal year (FY), and up to 3% in the 2028-29 FY and forward. The bill proposes to re-establish the program as the Charter Authorizing Support Team, managed by the FCMAT. This program will provide the necessary training and technical assistance that charter authorizers need as they consider charter school petitions and provide meaningful oversight of the charter schools they authorize.
Analysis Prepared by: Aaron Heredia / APPR. / (916) 319-2081
Date of Hearing: April 30, 2025
ASSEMBLY COMMITTEE ON EDUCATION
Al Muratsuchi, Chair
ABPCA Bill Id:AB 84 (
Author:Muratsuchi) – As Amended Ver:March 19, 2024
SUBJECT: School accountability: audits: charter schools: data systems
SUMMARY: Establishes new requirements for nonclassroom based (NCB) charter schools in the areas of auditing and accounting standards, the funding determination process, contracting process, authorization of NCB charters by small districts, and the authorizer oversight process, as specified. Specifically, this bill:
Audit and Accounting Standards
- Requires training for local educational agency (LEA) auditors, requires LEA audits to be peer reviewed, and requires the State Controller’s Office (SCO) to perform quality control reviews, as specified.
- Requires the K-12 audit guide to include schedules on pupil enrollment, pupil attendance, the 25 largest monetary transfers, pupil to teacher ratios, related loans, the expense of education, charter oversight expenses; and include audit instructions on sample section, materiality, enrollment, charter authority input, related parties, and classroom-based instruction verification.
- Requires charter schools to follow the same audit procedures and audit schedules, and use the same Standardized Account Code Structure (SACS), as school districts.
- Creates the Office of Inspector General at the California Department of Education (CDE), to be appointed by the Governor.
NCB Charter School Funding Determination
- Establishes a funding formula for NCB charter schools based on the amount of in-classroom instruction provided to pupils as follows:
- Pupils engaged in classroom-based instruction for at least 75% of their attendance, generate 100% attendance for state apportionment;
- Pupils engaged in classroom-based instruction for between 60% and 74% of their attendance, generate 92.5% attendance for state apportionment;
- Pupils engaged in classroom-based instruction for between 40% and 59% of their attendance, generate 85% attendance for state apportionment;
- Pupils engaged in classroom-based instruction for between 20% and 39% of their attendance, generate 77.5% attendance for state apportionment; and
- Pupils engaged in classroom-based instruction for between 0% and 19% of their attendance, generate 70% attendance for state apportionment.
Charter School Contracts
- Prohibits private religious organizations or schools from serving as contractors.
- Requires charter schools to participate in competitive bidding of contracts in the same manner as school districts.
- Prohibits contracts from being calculated as a percentage of charter school apportionment.
- Prohibits schools from paying for instructional programs not offered by a credentialed teacher.
- Prohibits employee compensation based on vendor contracts, student attendance or course completion.
Staff Training
- Requires staff that provide direct services to students (School Counselors and Psychologists, School Nurses, Librarians, and Student Attendance Clerks), administrators, as well as contractors who provide direct services to students that count toward instructional minutes to hold an appropriate credential, in the same manner as school districts.
Pupil Attendance Data Study
- Requires the CDE to study the feasibility of connecting the California Longitudinal Pupil Achievement Data System (CALPADS) and the attendance accounting system.
Pupil to Teacher Ratios
- Authorizes charter schools to calculate pupil-to-teacher ratios in independent study programs by one of the following methods, which currently exist for school districts and county offices of education (COEs):
- A 25 to 1 pupil-to-teacher ratio;
- An alternative pupil-to-teacher ratio negotiated as part of a collective bargaining agreement; or
- The prior year pupil-to-teacher ratio at programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year.
School District Authorizers
- Permits a NCB charter school to be authorized as follows:
- School districts < 2,500 in Average Daily Attendance (ADA) may authorize NCB charters up to 100% of district ADA;
- School districts of 2,500-5,000 ADA may authorize NCB charters up to 2,500 ADA; and
- School districts of 5,000-10,000 ADA may authorize NCB charters up to 50% of district ADA.
- Directs the State Board of Education (SBE) to reassign NCB charters that are authorized by small districts to larger district authorizers within the county or the COE, upon their next renewal.
- Includes in the definition of state receivership the probationary period following loan repayment for school districts in qualified budget status.
Authorizer Oversight and Oversight Fees for Charter Schools
- Establishes the Charter Authorizing Support Team at the Fiscal Crisis and Management Assistance Team (FCMAT).
- Requires charter school authorizers to annually perform the following oversight responsibilities for charter schools:
- Verify the percentage of pupils participating in classroom-based instruction.
- Annually verify the ADA-to-certificated-teacher ratio used by the charter school.
- Verify average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school, to determine enrollment and attendance trends and averages; and
- Perform audit compliance monitoring.
- Permits a charter authorizer to charge oversight fees not to exceed actual costs up to 2% for the 2027-28 fiscal year; and, effective July 1, 2028, permits a charter authorizer to charge oversight fees not to exceed actual costs up to 3%. Requires these expenses to be included in a separate audit schedule of the authorizer’s annual audit.
- Sunsets the moratorium on NCB charter schools as of December 31, 2025.
EXISTING LAW:
- Establishes the Charter Schools Act of 1992 which authorizes a school district governing board or county board of education to approve or deny a petition for a charter school to operate independently from the existing school district structure as a method of accomplishing, among other things, improved pupil learning, increased learning opportunities for all pupils, with special emphasis on expanded learning experiences for pupils who are identified as academically low achieving, holding charter schools accountable for meeting measurable pupil outcomes, and providing the schools with a method to change from rule-based to performance-based accountability systems. (Education Code (EC) 47605)
- Establishes a process for the submission of a petition for the establishment of a charter school. Authorizes a petition, identifying a single charter school to operate within the geographical boundaries of the school district, to be submitted to the school district. Authorizes, if the governing board of a school district denies a petition for the establishment of a charter school, the petitioner to elect to submit the petition to the county board of education. Authorizes, if the county board of education denies the charter, the petitioner to submit the petition to the SBE only if the petitioner demonstrates that the school district governing board or county board of education abused its discretion in denying the charter school. Authorizes a school that serves a countywide purpose to submit the charter petition directly to the county office of education.
- Requires, upon renewal, a charter school to be identified as either low performing, middle performing or high performing based on state dashboard accountability data. Requires that low performing, charter schools be denied, however, the school may be renewed for a two year period if the authorizer is presented with verified data that meet specified criteria and the authorizer finds it compelling. Authorizes middle performing charter schools to be renewed for 5 years. Authorizes high performing charter schools to be renewed for 5-7 years.
- Prohibits the authorization and establishment of new nonclassroom based charter schools between January 1, 2020, and January 1, 2026.
- Prohibits a charter school from receiving any public funds for a pupil if the pupil also attends a private school that charges the pupil's family for tuition. Prohibits a charter from being granted that authorizes the conversion of any private school to a charter school. (EC 47602)
- Prohibits, notwithstanding any other law, a local educational agency (LEA), including, but not limited to, a charter school, from claiming state funding for the independent study of a pupil, whether characterized as home study or otherwise, if the LEA has provided any funds or other thing of value to the pupil or his or her parent or guardian that the LEA does not provide to pupils who attend regular classes or to their parents or guardians. (EC 51747.3)
- Authorizes a charter school to receive funding for nonclassroom based instruction only if a determination for funding is made by the SBE. Requires the determination for funding to be subject to any conditions or limitations the SBE may prescribe. Requires the SBE to adopt regulations that define and establish general rules governing nonclassroom based instruction that apply to all charter schools and to the process for determining funding of nonclassroom based instruction by charter schools offering nonclassroom based instruction. Defines nonclassroom-based instruction to include, but not be limited to, independent study, home study, work study, and distance and computer-based education. (EC 47612.5)
- Requires the SBE to adopt regulations setting forth criteria for the determination of funding for nonclassroom based instruction, at a minimum the regulation to specify that the nonclassroom based instruction is conducted for the instructional benefit of the pupil and is substantially dedicated to that function. Requires the SBE to consider, among other factors it deems appropriate, the amount of the charter school’s total budget expended on certificated employee salaries and benefits, on schoolsites, and the teacher-to-pupil ratio in the school. Requires, for the 2003–04 fiscal year and each fiscal year thereafter, the amount of funding determined by the SBE to not be more than 70% of the unadjusted amount to which a charter school would otherwise be entitled, unless the SBE determines that a greater or lesser amount is appropriate. (EC 47634.2)
- Requires a charter school to transmit a copy of its annual, independent financial audit report for the preceding fiscal year to its chartering entity, the SCO, the county superintendent of schools of the county in which the charter school is sited, (unless the county board of education of the county in which the charter school is sited is the chartering entity) and the CDE, by December 15 of each year. (EC 47605)
- Requires financial and compliance audits to be performed in accordance with General Accounting Office standards for financial and compliance audits. Requires that the audit guide prepared by the SCO be used in the performance of these audits until an audit guide is adopted by the Education Audits Appeal Panel. When an audit guide is adopted by that panel, the adopted audit guide be used in the performance of these audits, and that every audit report specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. (EC 14503)
- Authorizes the independent study (IS) program for school districts, COEs and charter schools. Requires LEAs that offer IS to adopt written policies that include the length of time that may elapse between the time an independent study assignment is made and the date the pupil must complete the assigned work, missed work assignments, and there be a written agreement between the pupil and the IS program. Requires that the written agreement include processes for submitting pupil work, objectives and methods of study for the pupil’s work, resource that will be made available to the pupil, duration of the agreement, and number of credits to be earned upon completion. A pupil with an Individualized Education Program (IEP) is not authorized to participate in an IS program unless their IEP specifically provides for that participation. Requires that the IS of each pupil be coordinated, and evaluated under the general supervision of an employee of the LEA who possesses a valid certification document or an emergency credential. Establishes certificated employee-to-pupil ratios, as specified. (EC 51745–51749.3)
- Authorizes the Course Based Independent Study (CBIS) program for school districts, COEs, and charter schools for pupils enrolled in kindergarten and grades 1-12, inclusive, under the following conditions: completion of a signed learning agreement between the pupil and school, courses are taught under the general supervision of certificated employees who old the appropriate subject matter credential, and are employed by the LEA, courses are annually certified by the LEA governing board or body to be of the same rigor and educational quality as equivalent classroom-based courses and aligned to all relevant local and state content standards, requires certificated employees and pupils to communicate in person, by telephone, or by any other live visual or audio connection no less than twice per calendar month to assess whether the pupil is making satisfactory educational progress, requires an evaluation if the pupil is not making satisfactory educational progress. Requires a written agreement between the CBIS program and the pupil. Specifies that if more than 10% of the total ADA of a school district, charter school, or COE is claimed, then the amount of ADA for all pupils enrolled by that LEA that is in excess of 10% of the total ADA for the LEA is to be reduced, as specified. (EC 51749.5–51749.6)
- Requires each chartering authority to do all of the following with respect to each charter school under its authority:
- Identify at least one staff member as a contact person for the charter school;
- Visit each charter school at least annually;
- Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan (LCAP) and annual update to the LCAP required pursuant to Section 47606.5;
- Monitor the fiscal condition of each charter school under its authority; and
- Provide timely notification to the CDE if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
- A renewal of the charter is granted or denied;
- The charter is revoked; or
- The charter school will cease operation for any reason. (EC 47604.32)
- Authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school, not to exceed 1% of the revenue of the charter school. Authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school not to exceed 3% of the revenue of the charter school if the charter school is able to obtain substantially rent free facilities from the chartering authority. Authorizes a LEA that is given the responsibility for supervisorial oversight of a charter school by the SBE to charge for the actual costs of supervisorial oversight and administrative costs necessary to secure charter school funding. (EC 47613)
FISCAL EFFECT: Unknown
COMMENTS:
Need for the bill. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
Background on charter schools. According to the CDE, as of the 2024-25 school year, there are 1,280 active charter schools in California, with an enrollment of over 709,000 pupils. Some charter schools are new, while others are conversions from existing public schools. Charter schools are part of the state's public education system and are funded by public dollars. A charter school is usually created or organized by a group of teachers, parents, community leaders, a community-based organization, or an education management organization. Charter schools are authorized by school district boards and county boards of education. A charter school is generally exempt from most laws governing school districts, except where specifically noted in the law. Specific goals and operating procedures for the charter school are detailed in an agreement (or "charter") between the authorizing board and charter organizers.
What is nonclassroom based instruction? Nonclassroom based instruction includes computer-based instruction using software modules, teacher-directed independent study, and traditional homeschool parents who enroll their children in independent study charter school programs.
A nonclassroom based charter school is defined as a school with less than 80% of its total ADA that is classroom based, in which instruction takes place in a classroom setting. As of April 2021, there were 304 charter schools considered to be NCB. Of that number, 105 charter schools self-identified as providing exclusively virtual or primarily virtual instruction.
Existing law defines charter school nonclassroom based instruction as instruction that does not meet the requirements of classroom-based instruction. Those requirements are:
- Charter school pupils are engaged in required educational activities and are under the immediate supervision and control of a certificated teacher;
- At least 80% of the instructional time offered by the charter school is at the schoolsite (defined as a facility that is used primarily for classroom instruction); and
- Pupil attendance at the schoolsite is required for at least 80% of the minimum instructional time.
What does research say about pupil academic achievement at NCB charter and virtual schools? Research indicates that students at NCB charters and virtual schools achieve lower rates of academic achievement compared to students at classroom-based schools. One review notes, “By any measure, online charter schools perform significantly worse than traditional public schools, and this negative impact carries across every demographic of pupils. So while online schools are indeed needed for pupils whose requirements cannot be met by brick-and-mortar schools, it’s clear that the quality of education offered by online charter schools is significantly below the state average. As public policy, legislators should be looking to limit the number of students in online charter schools and should resist calls to expand this sector.” (Lafer, 2021)
A 2015 national analysis of NCB charter schools found, “The differences were much larger between classroom-based and non-classroom-based charter schools with the nonclassroom-based charter schools having lower achievement. This result is consistent with a study of Ohio charter schools that found virtual schools performing poorly relative to traditional public schools (TPSs) and other charter schools (Zimmer, et al., 2009). It is consistent as well with findings for Pennsylvania, which has among the highest proportion of online charter pupils. The Center for Research on Education Outcomes (CREDO) (2011) report on Pennsylvania charter schools found that all eight cyber schools then operating performed significantly and substantially worse on both mathematics and reading than TPSs.” (Epple, et al., 2015)
The following chart shows the California statewide average student achievement at traditional brick and mortar schools, versus the average pupil performance at online charter schools. This data excludes all schools that mainly serve pupils who are credit deficient (known as DASS alternative schools), however, when DASS schools are included, the difference in pupil performance between classroom based schools and online charter schools is even more significant.
(Source: In the Public Interest (Lafer, 2021))
Numerous studies indicate that online instruction is not as effective as regular classroom instruction:
- A 2019 study by the CREDO at Stanford University of charter schools in South Carolina concluded that students attending online charter schools have weaker growth in both reading and math compared to the average traditional public school. The gap translates to 35 and 118 fewer days of learning for online charter students in reading and math, respectively. In contrast, students in brick-and-mortar charters post academic progress in reading and math similar to that of the average traditional public school students.
- A CREDO study in 2019 of students in New Mexico attending online charter schools found those students to have substantially weaker growth in both reading and math than the average traditional public school students. The gaps translate to 130 fewer days of learning in reading and 118 fewer days of learning in math for online charter students. In contrast, students in brick-and-mortar charters exhibit stronger growth in reading (equivalent to 24 extra days of learning) and obtain similar learning gains in math as compared with the average traditional public school students.
- A CREDO study in 2019 of students in Ohio attending online charter schools found students to have substantially weaker growth in both reading and math than the average traditional public school students. The gaps translate to 47 fewer days of learning in reading and 136 fewer days of learning in math for online charter students. In contrast, students in brick-and-mortar charters exhibit stronger growth in reading (equivalent to 24 days of extra learning) and obtain similar learning gains in math as compared with the average traditional public school students.
- A CREDO study in 2019 of students in Pennsylvania attending online charter schools found students to have weaker growth in both reading and math compared to the average traditional public school. These gaps translate to 106 fewer days of learning in reading and 118 fewer days of learning in math. Students attending brick-and-mortar charter schools however exhibit positive growth in reading compared to the average traditional public school students, gaining about 24 days of learning. In math, brick-and-mortar charter school students perform similarly to the average traditional public school students.
- A CREDO study in 2019 of students in Idaho attending online charter schools found students to have similar growth in reading and weaker growth in math compared to the average traditional public school student. The gap translates to 59 fewer days of learning in math for online charter students. The study found no learning loss in reading associated with online charter schools in Idaho. Students in brick-and mortar charters exhibit stronger growth in reading and math, equivalent to 30 and 35 extra days of learning, respectively, compared with the average traditional public school students.
- A CREDO study in 2015 concluded that the learning deficit of virtual schools is equivalent to receiving 180 fewer days of math instruction and 72 fewer days of reading instruction. The study's author said that the learning in math was so small that it was "literally as though the student did not go to school for the entire year."
- A CREDO study in 2011 of charter school performance in Pennsylvania found that each of that state's 8 online charter schools ("cyber schools") significantly underperformed brick-and-mortar schools and regular (non-virtual) charter schools in reading and math.
- A year review of virtual schools in Wisconsin by the Gannett Wisconsin Media Investigative Team found that pupils receiving online instruction "often struggle to complete their degrees and repeat grades four times as often as their brick-and-mortar counterparts," and that they "trail traditional students in every subject but reading."
- A 2011 report from the Office of the Legislative Auditor in Minnesota reported that full-time online pupils were more likely to completely drop out of school and made less progress on state standardized math tests than pupils in traditional schools.
- A 2011 report from the Ohio Department of Education rated only three of Ohio's 27 virtual schools as "effective" or "excellent."
- A 2006 performance audit by the Colorado Department of Education of that state's virtual schools found that, "in the aggregate, online students performed poorly on the CSAP (Colorado State Assessment Program) exams and had higher repeater, attrition, and dropout rates."
A report by In the Public Interest (Virtual Public Education in California, 2015) focused specifically on California Virtual Academy (CAVA) schools, and concluded that "students at CAVA are at risk of low quality educational outcomes, and some are falling through the cracks entirely, in a poorly resourced and troubled educational environment." Among the concerns identified by the report are the following:
- In every year since it began graduating pupils, except 2013, CAVA has had more dropouts than graduates.
- Pupils are eligible to be counted as having attended with as little as one minute of login time each day.
- K12 California (the California subsidiary of K-12, Inc.) pays itself for services out of CAVA school bank accounts that it (K12 California) manages.
- Competitive bidding is prohibited: K12 California contractually prohibits CAVA schools from seeking another vendor for services that K12 California is willing and able to perform.
- CAVA teachers report that the "vast majority" of the work they do is clerical, preventing them from spending sufficient time teaching.
- Limited local control: individual CAVA location governing boards operate under contract with K12 California and do not "have much leeway in terms of budget, program and contracting decisions independent from K12 California."
- K12, Inc. charges CAVA schools more than they can reasonably pay for administrative and technology services. The shortfall is covered by "budget credits" that are extended by K12, Inc., which results in a "perpetual debt" relationship between CAVA schools and K12, Inc.
- CAVA pupils have lower academic achievement, higher dropout rates, and higher turnover than pupils enrolled in brick-and-mortar schools.
Virtual schools have consistently been shown to underperform brick-and-mortar schools by wide margins. At the same time, California has invested heavily in policies to improve pupil outcomes, including the adoption of rigorous academic content standards, assessments aligned to those standards, and the use of evaluation rubrics (the "California School Dashboard") to monitor school and district performance and identify districts for targeted assistance.
Recent A3 Charter Schools fraud case reveals significant weaknesses in nonclassroom based charter school law. Numerous charter school fraud cases have been documented in recent years including, but not limited to: A3 Charter Schools, Magnolia Charter School, Tri-Valley Learning Corporation, among others.
In People v. McManus the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen charter schools (A3 Charter Schools). The case revealed many weaknesses in state public charter school law in the areas of pupil data tracking, auditing, school finance, and oversight, which resulted in A3 schools surrendering more than $210 million, 13 houses, and numerous shares in third-party companies.
- Lack of pupil data tracking. Currently, charter schools submit aggregate attendance data for each school without any information about individual pupils. Oversight agencies do not maintain individual pupil data about enrollments in charter schools they oversee for state funding purposes. One A3 charter school was found to be paying a private company to recruit and collect personal information from pupil athletes. The school then enrolled the athletes in the charter school without their knowledge—thereby fraudulently generating ADA—and paid the recruiting company a portion of the public funds generated as a finder’s fee.
- Multi-track calendar abuses. The A3 schools were found to have deceived the state into paying them significantly more funds by manipulating the “multi-track year round calendar,” which charter schools are currently authorized to use. The A3 schools would (1) run a fake summer school to collect funding for pupils that never knowingly enrolled, (2) inflate their fraudulent summer school attendance numbers—to the tune of about 60%—by offering fewer days of fake summer school instruction, and (3) transfer pupils between different A3 schools, increasing attendance fraudulently by another roughly 40%.
- Lack of meaningful audit requirements. The annual audits required by law found little to no malpractice by A3 schools, for several reasons. First, auditors are not required to complete any specialized up-front or ongoing training in school finance or law to audit a charter school. Second, charter schools can choose their auditors—A3 schools were shown to have fired their auditing firms and hired less experienced firms in the rare event that audit findings were made. Third, NCB charter schools are allowed to pick their own samples of pupil documentation showing compliance with independent study laws—enabling A3 to hide the fraudulent aspects of their operation from auditors. Fourth, auditors are not required to audit the education program received by pupils, only compliance with documentation. In the A3 schools, many children were enrolled from sports teams, believing they were participating in a fundraiser and had no knowledge they were enrolled in a charter school at all.
- Flawed funding determination process. While existing law requires that NCB charter schools only receive full funding in exceptional circumstances—when at least 80% of funding is spent directly serving pupils—the current funding determination process essentially funds all schools at 100%. This is because existing regulations define “instructional and related services” very broadly, and charter schools can meet these spending benchmarks without necessarily spending money on pupils. Further, NCB charter schools are only required to request a funding determination and provide compliance documentation to the SBE every five years.
- Perverse financial incentives for charter school authorizers. Existing law allows charter authorizers to collect oversight fees from charter schools under their authority but does not require authorizers to demonstrate that the fees are spent on meaningful school oversight. Small school districts that approve NCB charter schools serving pupils not located in the district can earn significant oversight fees—creating a built-in incentive to overlook poor charter school practices. For example, Dehesa Elementary School District approved over ten charter schools all providing NCB programs. The district’s oversight fees for the 2017-2018 school year were more than its entire expenditures for all employees hired by the district. When the district learned of improprieties from their charter schools it took no meaningful action. Ultimately, the district collected the oversight fees and only acted to revoke the A3 Charter Schools under its authority once law enforcement was involved.
The chart below illustrates a sampling of current small school districts that have authorized large numbers of nonclassroom based charter schools.
School District Name | School District ADA | Authorized Charter School ADA |
New Jerusalem Elementary | 22 | 4,500 |
Oro Grande | 109 | 3,738 |
Dehesa Elementary | 145 | 8,532 |
Maricopa Unified | 300 | 6,067 |
Julian Union Elementary | 311 | 3,502 |
Campbell Union | 876 | 6,417 |
Acton-Agua Dulce Unified | 1,080 | 13,775 |
(Source: California School Boards Association)
Small district authorizers. Most NCB charter schools are authorized by small rural school districts. Many of these small districts are stretched thin with regard to staff, and in some cases the Superintendent holds many roles like math teacher and school bus driver. These small districts do not have the capacity to provide meaningful charter school oversight. In some cases, these small school districts authorize NCB charter schools as a means to balance their district budgets, through the collection of oversight fees. There are very small school districts authorizing large NCB charter schools. This bill matches the capacity of small school districts to provide meaningful charter oversight and permits NCB charter schools to be authorized as follows:
- School districts < 2,500 in ADA may authorize NCB charters up to 100% of district ADA;
- School Districts of 2,500-5,000 ADA may authorize NCB charters up to 2,500 ADA; and
- School Districts of 5,000-10,000 ADA may authorize NCB charters up to 50% of district ADA.
These requirements will significantly limit, and in some cases stop, the authorization of NCB charters by districts less than 2,500 ADA, and will slow the growth of authorization of NCB charters at districts between 2,500-10,000 ADA.
Some charter schools give education dollars to parents. Some NCB charter schools cater to families that want to have the parent serve as the primary person delivering instruction and these schools allow parents to direct how their children’s education dollars are spent.
As of April 2025, the South Sutter Charter School’s website states, “For the 2024/25 school year, family accounts are funded up to the following amounts:
- $4,150 – High School
- $3,650 – 1st-8th Grade
- $2,650 – TK-K Grade”
As of April 2025, the Arete Charter Academy’s website states, “for the 2025-2026 school year, TK-12th grade students receive $4500 of instructional funding per school year. Arete will use $700 to purchase student curriculum or academic instruction. The remaining $2,550 ($1275 per semester) is used for the parent’s choice of field trips, supplemental materials, technology, tutoring and/or extra enrichment courses whether provided at the Arete Resource Center or off-site at a community vendor. $750 is used for targeted academic support in the form of one on one or small group (five or less students) tutoring/intervention. If the student is meeting grade level standards those funds become unrestricted enrichment funds. $500 is used for expanded learning opportunities.”
Arete Charter Academy’s list of vendors includes, but is not limited to:
- Horsemanship
- Swim Lessons
- CrossFit training
- Golf Pro Lessons at a Golf course
- Music Lessons
- Tutoring Services
- Dance Lessons
- Cooking Lessons
Investigative journalism found examples of inappropriate use of public school funds through vendor contracts. Investigations into the operations of a few NCB charter schools regarding possible inappropriate use of public school funds are ongoing. A 2019 investigation by the San Diego Union-Tribune found:
- Trips to Disneyland and SeaWorld. “In California, there’s a way parents can use money from the government to buy multi-day Disneyland Park Hopper passes, San Diego Zoo family memberships, tickets to Medieval Times and dolphin encounters at SeaWorld. There are a handful of charter schools that give pupils’ families as much as $2,800 to $3,200 — tax dollars sent to the charter schools — every year to spend on anything they want from a list of thousands of home-school vendors approved by the charters, according to the schools’ websites. AdvertisementIf you live in California and you’re not taking advantage of this, I don’t know what to say,’ said Karen Akpan, a home-school charter parent of four who lives in Beaumont. She wrote a recent blog article describing how she used the educational funds to pay for a family trip to Disneyland, Chicago CityPASSes, and Legoland tickets, as well as computer coding kits, educational toys, books, and subscription cooking kits for her kids.”
- California is the only state paying for these types of services. “’I don’t know of any states where they’re paying for the kinds of things they’re paying for in California,’ said Mike Smith, president of the Home School Legal Defense Assn, a national group that advocates for homeschooling families. ‘Those schools don’t have as many fixed costs as a school that would have a large campus, paying for heat and custodians and all of that. But yet, they get the same amount of money per student from the state,’ said Stephanie Hood, a charter school adviser with the Homeschool Assn. of California. It is relatively easy for home-school charters to recruit pupils, because enrollment happens online and families can request vendors near where they live. Valiant advertised enrollment to families in 34 counties on its website, even though its schools were authorized to operate in only three counties. ‘As you know, that’s why some of the problems have occurred, because there’s so much money in it,’ Smith said. ‘It’s very easy to do. ... It’s just ripe for the kind of things that are going on.’”
- Public education dollars spent at private schools. Some charter school vendors are businesses or nonprofits that cater to homeschoolers and operate like private schools in that they charge tuition and employ their own teachers, who often are not credentialed by the state. Some vendors provide a wide variety of classes, ranging from electives such as sewing and cooking, to core classes such as traditional English, math and science. Many of these vendors do not call themselves schools, but rather enrichment centers, learning centers, home school co-ops or tutoring academies. Some larger vendors, such as Homeschool Campus and Discovery of Learning, have several campuses, often at churches. Enrolling in a home school charter can allow the pupil to use the charter school’s funds to pay the tuition for these schools, if their assigned charter school teacher approves it.
- Public education dollars spent at religious schools. AdvertisementThere also are religiously affiliated vendors, like the Christian-owned Eden Learning Academy, which until recently said on its website that it is based on a ‘Christian Worldview,’ or the Christian Youth Theater, which says on its website that part of its objective is to ‘share the love of Christ in word and deed.’” Inspire Charter School lists Eden Learning Academy and the Christian Youth Theater as vendors on their website.
Funding determination. As noted earlier in this analysis, NCB charter schools are required to obtain a funding determination that is approved by the SBE. This funding determination establishes the percentage of funding the NCB charter school will receive compared to all other traditional classroom based schools. Most charter schools apply for a 100% NCB funding determination. To do so, they must meet the following criteria:
- Spend at least 40% of total public revenue on instructional certificated salary and benefits;
- Spend at least 80% of total public revenue on instruction related services; and,
- Not exceed a 25:1 pupil to teacher ratio.
A 2021 report by In the Public Interest illustrates the possible profiteering permitted by the flawed funding determination system at California’s NCB charter schools. The report states:
Overpayment for online charter schools is dramatically illustrated in the case of Connections Academy and its parent corporation Pearson. Alongside the Connections Academy schools, Pearson also operates an online private school, the Pearson Online Academy, for Americans stationed abroad who want their children to get an American education or for those in states that do not allow charter schools.
The curriculum for Pearson Online Academy and California Connections Academy schools are the same – both the list of courses and the description of each course’s content are virtually identical in both schools. Indeed, when asked if the two schools’ classes are sufficiently similar so that a student could seamlessly transfer between one and the other in the middle of a school year, a Pearson company representative stated that the courses line up “apples to apples – so close it’s ridiculous.” Another Pearson representative explained that “the private side [Pearson Online Academy] writes the curriculum for the Connections side,” and as a result “transferring credits is no problem.”
But while the product may be the same, the costs for these courses are dramatically different. California taxpayers pay approximately $10,300 for every student who attends a Connections Academy school. By contrast, the tuition for enrolling in the Pearson Online Academy is just $4,800 for an elementary school student, $5,880 for middle school, and $6,880 for high school. It seems then that California taxpayers are paying a markup of at least 35 percent (approximately $3,500 per student) above all costs, including reasonable profit. So across all the schools in this chain, California taxpayers are wasting over $22 million per year.
In other words, if the state of California simply paid all Connections Academy students to attend Pearson’s private online school, taxpayers would save over $22 million per year.
LAO/FCMAT Review of NCB Charter Funding Determination Process. In their 2024 report to the Legislature, the LAO and FCMAT made the following recommendations:
Recommend Several Changes to Improve Funding Determination Process. We provide several specific recommendations the Legislature could enact to improve the funding determination process. Our recommendations are intended to narrow the process to a smaller subset of schools, improve the comprehensiveness and quality of data submitted to CDE, and streamline some aspects of the process. Most significantly, we recommend the Legislature:
- Narrow the Definition of a Nonclassroom-Based Charter School. We recommend narrowing the definition of a nonclassroom-based charter school so that the designation excludes those schools that provide the majority of their instruction in person. This would exclude charter schools whose programs have cost structures that are similar to traditional classroom-based programs.
- Improve Quality of Data Submitted to CDE. To assist CDE in efficiently reviewing and processing funding determination forms, we recommend requiring data submitted by charter schools be consistent with their annual audits. We also recommend several changes that would require information submitted to CDE be subject to annual audits.
- Use Multiple Years of Data for Funding Determinations. We recommend the funding determinations take into consideration a school’s aggregate spending for all years since the previous funding determination. This would ensure school expenditures are aligned with the funding determination thresholds consistently over time.
Consider Changes to Charter School Oversight. We also provide several recommendations for the Legislature to consider regarding broader oversight of charter schools. These issues generally apply to all charter schools, though in a few cases we highlight specific issues related to nonclassroom-based charter schools and virtual charter schools. Most significantly, we recommend the Legislature consider the following:
- Improvements to Oversight by Charter School Authorizers. We recommend the Legislature consider several changes to improve the quality of authorizer oversight. Specifically, we recommend the Legislature set limits on district authorizers by district size and grade, increase minimum requirements for authorizers, and consider an alternative authorizing structure for virtual schools.
- Enhancements to Charter School Audits. Current audit requirements often do not address the complexities and unique flexibilities of charter school finances. We recommend the Legislature align the audit process for charter schools to that of school districts and add audit requirements that would address issues specific to charter schools.”
Audit standards identified as flawed as a result of the A3 Charter School Case. The A3 Charter case illustrated many faults in the way that charter schools are audited compared to school districts.
- Current law allows charter schools to be audited as nonprofit corporations rather than as governmental entities. Nonprofit corporation audits are not nearly as detailed as governmental entity audits. This bill creates parity between charter schools and school districts with regard to audit procedures and schedules so that charter school audits will be as detailed as school districts, and use the Standardized Account Code Structure required of school districts.
- Current law does not require school district and charter school auditors to receive any special training on auditing schools. This bill requires training for school district and charter auditors and updates the audit peer review process to include school audits.
- The law does not provide the CDE the authority to investigate wrongdoing among school districts and charter schools. The federal government has established an Office of the Inspector General at each federal department, including the Department of Education. This bill emulates the federal process and creates the Office of Inspector General at the CDE.
- Current law does not direct auditors to review many aspects of independent study programs at charter schools. This bill updates the audit guide to include sampling guidance, pupil to teacher ratios, the 25 largest monetary transfers, and pupil attendance.
State Controller’s Charter School Audits Task Force. In response to the A3 Charter School fraud case, a San Diego Superior Court Judge signed a court order to approve the formation of a multi-agency task force, known as the Multi-Agency Charter School Audits Task Force lead by the SCO to combat charter school fraud. The 2024 Task Force report made the following recommendations:
The Task Force extensively discussed the current state of California charter schools and developed recommendations based on the combined expertise, experience, and knowledge of multi-disciplinary Task Force members. These recommendations are intended to foster a culture of transparency and accountability by further strengthening charter school audit function components. The recommendations are organized into the following sections of this report:
• Certified Public Accountant Firm Authorization, Qualifications, Training, Evaluation, and Compliance with K-12 Audit Guide;
• Certified Public Accountant Firm Selection, Rotation, and Late Audit Report Notifications:
• K-12 Audit Guide Procedures; and
• Financial Statement Audit Report Disclosures.
The Task Force determined that most of the recommendations should be applied to all local education agencies including school districts, county offices of education, and charter schools, providing opportunities to strengthen the audit functions across the entire local education agency system. To combat fraud in charter schools, it is important that oversight agencies, in addition to those performing charter school audit functions, implement strong internal and monitoring controls to timely identify and mitigate potential fraud. The control and monitoring functions include the charter school petition and approval process, the charter school accountability systems, the authorizer monitoring of charter schools, and the respective oversight functions of the charter school governing board, county offices of education, the California Department of Education, and the State Controller’s Office.
Teacher assignments and school calendars. Current law requires IS programs to operate with specified pupil-to-teacher ratios. Some charter school networks, however, have exceeded these ratios by assigning teachers different groups of pupils at multiple schools. While on paper, it appears that a teacher has a 25-to-one pupil-to-teacher ratio at a single school, in reality, the teacher has a much higher pupil-to-teacher ratio across their entire teaching assignment at multiple schools. This bill requires parity in pupil-to-teacher ratios in independent study programs across a teacher’s assignment.
The A3 Charter School case demonstrated the ability of schools to manipulate their calendars to collect far more than one year of attendance funding per pupil from the State. The A3 Charter School used the multitrack year-round calendar to run a summer program and erroneously enrolled Little League players over the summer months, enrolled them without their parent’s knowledge, and collected attendance funding without providing any instruction to these children. Further, A3 Charter Schools transferred students between multiple schools in their network over the summer months, using the multitrack year-round schedule, and altered their calendar, to collect much more than one year of attendance funding per student. This bill prohibits multi-year-round track calendars for school districts and charter schools to protect the State from paying more than one year of attendance per pupil. The bill further provides a SBE waiver in the case of severe facility shortages, for example, those facility shortages seen in Elk Grove Unified School District.
CALPADS and ADA data systems. The State’s attendance accounting system is not connected to the CALPADS. In other words, when a charter school or school district submits its ADA information to the State, that ADA is not reported along with pupil identification. The State, therefore, does not know which pupils ADA is being claimed when it processes attendance apportionments. Current law prohibits a school from claiming more than one year of attendance per pupil, however, more than one year of attendance can be paid per pupil if the pupil attends more than one school. This bill requires, by January 2030, the CDE to study the feasibility of connecting CALPADS and the attendance accounting system to allow the State to determine when a pupil generates more than one year of attendance within one calendar year. This is the only way for the State to know precisely when one year of attendance has been generated for a particular pupil, and when the State is paying more than one year of attendance per pupil, per year.
Authorizer oversight and oversight fees. Charter school authorizers play a vital role in providing oversight over both the academic and fiscal aspects of the charter schools they authorize. In order to provide better oversight, this bill requires increased targeted oversight by authorizers in the following areas:
- Attendance accounting;
- Pupil-to-teacher ratios;
- Percentage of pupils engaged in classroom-based instruction; and
- Audit compliance monitoring.
In order to compensate authorizers for these increased oversight responsibilities this bill proposes to increase oversight fees from 1% of the charter school’s revenue (current law) to 3% of the charter school’s revenue by July 1, 2028. Further, these oversight fees will be included in a separate audit schedule in the school district annual audit.
Charter school authorizers have very few resources for technical assistance and support of their charter authorizing and oversight work. A few charter authorizers have an office of staff focused on charter school authorizing and oversight, however most authorizers are so small that they do not have any dedicated charter school staff. In the past, these LEAs have relied on the assistance of the Charter Authorizer Regional Support Network (CARSNet), while the program was funded with a federal grant. Through CARSNet, authorizers received training and attended conferences to polish their expertise in authorizing and oversight. During its tenure, CARSNet held 67 regional trainings and conferences with nearly 1,300 participants from across California. The federal grant funding expired, and the program lapsed over the last few years.
This bill proposes to re-establish the program as the Charter Authorizing Support Team, managed by the FCMAT. This program will provide the necessary training and technical assistance that charter authorizers need as they consider charter school petitions and provide meaningful oversight of the charter schools they authorize.
Arguments in support. The California School Employees Association states, “The California School Employees Association (CSEA), AFL-CIO, supports Assembly Bill (AB) 84 (Muratsuchi), our sponsored legislation to implement comprehensive reforms to nonclassroom-based charter (NCB) law aligned with the recommendations issued by the Legislative Analyst’s Office (LAO), the Fiscal Crisis and Management Assistance Team (FCMAT), the Multi-Agency Charter School Audits Task Force, and the California Charter Authorizing Professionals.
In 2019, the San Diego County District Attorney charged eleven people in a $400 million fraud scheme involving the nonprofit NCB charter operator A3 Education. A3’s leadership—Sean McManus and Jason Schrock—pulled off what has become known as one of the biggest charter school scandals in U.S. history by exploiting gaps in the law and deficiencies in charter authorizer oversight.
A3 fraudulently enrolled students who never actually took any classes in their schools by hiring enrollment workers to contact youth athletic organizations. A3 pledged to donate money to the athletic programs in exchange for each student who signed up and pocketed the difference—totaling as much as $1,550 per child. The charter management organization (CMO) avoided scrutiny for their practices by seeking small school districts without adequate oversight staff to be their authorizers. McManus and Schrock exerted total control over their network of schools by acting as both the administrators of the online schools as well as a vendor providing back-end business services.
The A3 case clearly exemplifies how California’s existing system of oversight for NCB charters—carried out by public authorizers, annual financial audits, and the State Board of Education through its NCB funding determination process—is woefully inadequate. That is why the Legislature in 2019 issued a moratorium on the establishment of any new NCB charters in California. This moratorium gave time for experts from the LAO and FCMAT to investigate these issues and propose comprehensive solutions. In addition, San Diego Superior Court Judge Robert C. Longstreth ordered the State Controller to chair a multi-agency task force to develop audit criteria and best practices for detecting and curtailing future fraud in charter schools. With the NCB charter moratorium set to expire in January 2026, the Legislature must act this year to strengthen our laws and prevent another case like A3.”
Arguments in opposition. Excel Academy states, “State funding policy must prioritize and uphold the truth that all students have equal value and deserve and warranty equal funding regardless of the type of school they choose, whether county office operated, district operated, or public charter school operated, and must be supported through equal opportunity to choose the type of learning model and program that best matches their needs and interests. State funding policy must never discriminate against students who choose alternative education models other than a physical classroom model that are a better match for them, nor should public funding policy pick winners and losers among students.
As currently written, AB 84 will severely limit educational choices and result in significant harm to high quality NCB public charter school students and schools at a time when more choices in the public school system can help meet the needs of underserved students.”
Recommended Committee Amendments. Staff recommends the bill be amended to:
- Require the Education Inspector General to report to the SBE instead of the SPI.
- Clarify that the schedule of pupil enrollment shall be by grade and reflect the enrollment recorded on the last day of the school month as defined in existing law.
- Limit the required audit schedule of pupil-to-teacher ratios to independent study programs.
- Clarify that the audit schedule of pupil enrollment also verify pupil residency and verify both by sampling residency documentation provided at the time of enrollment, instead of obtaining written confirmation from a parent or guardian.
- Clarify that the audit sampling of payments include credit card statements, debit card statements and other electronic forms of payment.
- Require new authorizer oversight requirements commence July 1, 2028. Authorize charter authorities to charge the actual cost of oversight up to 2% beginning in the 2028-29 fiscal year and up to 3% beginning July 1, 2029.
- Authorize a NCB charter in operation before December 31, 2025 that exceeds the ADA thresholds for small district authorizers to continue to be authorized by their existing chartering authority if that school district employs four executive level staff members whom have job responsibilities in the following areas: Superintendent, Chief Business Official, Human Resources, Special Education, and Curriculum.
- Require that dependent charter schools authorized pursuant to Section 47605.5 shall have no adjustment made to their funding determination.
- Clarify that charter schools are subject to Section 45037 and 41372, and specify that NCB charters shall expend 40% of the charter school’s current expense of education calculation on salaries of classroom teachers, consistent with the existing funding determination percentage.
Related legislation. SB 719 (Cabaldon) of the 2025-26 Session would make changes to the auditing standards for local educational agencies.
SB 414 (Ashby) of the 2025-26 Session would establish new requirements for nonclassroom based (NCB) charter schools in the areas of auditing and accounting standards, easing restrictions on the funding determination process, adding requirements to school contractors, and adding requirements to the authorizer oversight process with regard to enrollment and attendance data and credit card monitoring, as specified.
SB 1477 (Ashby) of the 2023-24 Session would have required the governing board of a charter school to review, at a public meeting, the annual audit of the charter school for the prior fiscal year; requires auditors of NCB charter schools to perform specified activities; and requires all LEAs to only enter into an agreement for educational enrichment activities with a vendor that is vetted and approved pursuant to specified criteria. This bill was held in the Assembly Education Committee.
AB 1316 (O’Donnell) of the 2021-22 Session would have established new requirements for NCB charter schools in the areas of auditing and accounting standards, the funding determination process, adding requirements to the contracting process, IS program requirements, required teacher to pupil ratios, limiting authorization of NCB charters by small districts, and adding specificity to the authorizer oversight process, as specified. This bill was held on the Assembly Floor.
SB 593 (Glazer) of the 2021-22 Session would have required the FCMAT to offer auditors of NCB charter schools training on the review of charter school financial documents to better identify irregular practices, requires the governing board of a charter school to annually review, at a public meeting as an item on the agenda, the annual audit of the charter school for the prior fiscal year, requires all independent study by pupils to be coordinated, evaluated, and under the general supervision of an employee of the LEA who possesses a valid certificate, permit, or other document required by law, and requires all LEAs to only enter into an agreement for the provision or arrangement of educational enrichment activities with a vendor that is vetted and approved pursuant to prescribed criteria. This bill was held in the Assembly Education Committee.
AB 2990 (C. Garcia) of the 2019-20 Session would have prohibited a charter school from providing financial incentives to a pupil or a parent of a pupil for educational enrichment activities; required a nonclassroom-based charter school to enter into an agreement for the provision of an educational enrichment activity only with a vendor that has been properly vetted and approved; required the governing body of a nonclassroom-based charter school to establish policies and procedures to ensure educational value, pupil safety and fiscal reasonableness before approving any contract for educational enrichment activities; and prohibited educational enrichment activity funds from being used for tuition at a private school or for activities, materials and programs that are religious in nature. This bill was held on the Assembly Floor.
AB 1505 (O’Donnell), Chapter 486, Statutes of 2019, established a two year moratorium on the establishment of nonclassroom based charter schools until January 1, 2022.
AB 1507 (Smith), Chapter 487, Statutes of 2019, prohibits charter schools from being located outside the boundaries of their authorizer and, authorizes nonclassroom-based charter schools to establish one resource center within the jurisdiction of the school district where the charter school is located.
SB 1362 (Beall) of the 2017-18 Session would have expanded the existing oversight requirements of, and increased the oversight fees that can be charged by, charter school authorizers; changed the charter petition review process for school district and COEs governing boards; added special education and fiscal and business operations content to the information that must be included in a charter petition; expanded the authority of a governing board to deny charter petitions; and, required the Legislative Analyst to submit a report to the Legislature on special education services by charter schools. This bill was held in the Senate Education Committee.
SB 329 (Mendoza) of the 2015-16 Session would have required a school district or COE, as part of its review of a charter petition, to consider 1) a report assessing its capacity to conduct oversight of the charter school and 2) a report of the anticipated financial and educational impact on the other schools for which the school district has oversight obligations. This bill was held in the Senate Appropriations Committee.
AB 8 X5 (Brownley) of the 2009-10 Session proposed comprehensive changes to the Education Code consistent with the federal Race to the Top (RTTT) program. This bill would have addressed the four RTTT policy reform areas of standards and assessments, data systems to support instruction, great teachers and leaders and turning around the lowest-achieving schools. This bill would have deleted the statewide charter school cap; proposed enhanced charter school fiscal and academic accountability standards. This bill was held in the Senate Education Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
California Labor Federation, Afl-cio
California School Boards Association
California School Employees Association
California State Pta
Capistrano Unified School District
Cft- a Union of Educators & Classified Professionals, Aft, Afl-cio
Public Advocates
Public School Defenders Hub
Oppostion
Achieve Charter Schools
Action Music Lessons
Alder Grove Charter School
All Tribes American Indian Charter School
Allegiance Steam Academy
Alliance College-ready Public Schools
Alma Fuerte Public School
Alpha Public Schools
Alta Public Schools
America's Finest Charter School
American Heritage Charter Schools
Annenkov Music School
Antioch Charter Academy
Antioch Charter Academy Ii
Ararat Charter School
Arts in Action Community Charter Schools
Aspen Public Schools, INC.
Aspire Public Schools
Association of Personalized Learning Schools & Services (APLUS+), the
Aveson Schools
Big Picture Educational Academy
Birmingham Community Charter High School
Bridges Charter School
Bridges Preparatory Academy
Brookfield Engineering Science Technology (best Academy)
California Charter Schools Association
California Health Coalition Advocacy
California Montessori Project
California Online Public School
California Pacific Charter Schools
California Parents for Public Virtual Education
California Republic Leadership Academy
California Virtual Academies
Camarillo Academy of Progressive Education
Camino Nuevo Charter Academy
Champs Charter High School of the Arts
Charter Schools Development Center
Children’s Community Charter School
Chime Institute
Choices Charter School
Citizens of the World Charter School
Clarksville Charter School
Coastal Grove Charter School
Community Learning Center Schools
Core Butte Charter School
Core Charter School
Core Collaboration
Crossroads Charter Academy
Da Vinci Schools
Delta Managed Solutions
Desert Trails Preparatory Academy
Discovery Charter Schools
Dixon Montessori Charter School
Dr. Lewis Dolphin Stallworth Charter School
Dual Language Immersion North County
Edison Bethune Charter Academy
Ednovate
Ednovate (UNREG)
Education for Change Public Schools
Eel River Charter School
El Sol Science and Arts Academy
Element Education
Elevate School
Environmental Charter Schools
Epic Charter School
Equitas Academy Charter Schools
Excel Academy Charter School
Extera Public Schools
Family Partnership Charter School
Feaster (mae L.) Charter School
Feather River Charter School
Fenton Charter Public Schools
Five Keys
Forest Charter School
Forest Ranch Charter
Freedom Keepers United, CA Freedom Keepers
Fresno Innovative Charter Schools
Gabriella Charter Schools
Gateway College and Career Academy
Gateway Community Charters
Girls Athletic Leadership Schools Los Angeles
Glacier High School Charter
Golden Valley Charter School
Gorman Learning Charter Network
Granada Hills Charter
Great Valley Academy
Green DOT Public Schools
Griffin Technology Academies
Growth Public Schools
Guajome Schools
Hawking Steam Charter School
Heartwood Charter School
High Tech Los Angeles
Hometech Charter School
Howard Gardner Community School
Icef Public Schools
Ilead California Charter Schools
Ingenium Schools
Innovations Academy
Innovative Education Management
Inspire School of Arts and Sciences
Intellectual Virtues Academy of Long Beach
Invictus Leadership Academy
Irvine International Academy
Ivy Academia Entrepreneurial Charter School
Jcs Family of Charter Schools
John Muir Charter Schools
Journey School
Kairos Public Schools
Kavod Charter School
Kepler Neighborhood School
Kid Street Learning Center Charter School
Kidinnu Academy
Kids' Club Spanish School
Kipp Public Schools Northern California
Language Academy of Sacramento
Larchmont Charter School
Lashon Academy
Learn4life
Learning for Life Charter School
Leonardo Da Vinci Health Sciences Charter School
Literacy First Charter Schools
Los Angeles Academy of Arts and Enterprise
Magnolia Public Schools
Maria Montessori Charter Academy
Matrix for Success Academy
Mayacamas Countywide Middle School
Meadows Arts and Technology Elementary School
Method Schools
Montague Charter Academy
Motivated Youth Academy
Mountain Home School Charter
Multicultural Learning Center
Museum School
Natomas Charter School
Natomas Homeschool Alliance
Navigator Schools
New Heights Charter School
New Jerusalem Elementary School District
New West Charter
Nord Country School
Northern United Charter Schools
Northwest Prep Charter School
Nova Academy Early College High School
Ocean Charter School
Ocean Grove Charter School
Odyssey Charter Schools
Olive Grove Charter School
Opportunity Youth Schools Coalition
Orange County Academy of Sciences and Arts
Orange County School of the Arts / California School of the Arts Foundation
Pacific Charter Institute
Pacific View Charter School
Pacoima Charter School
Para Los Ninos
Pasadena Rosebud Academy Charter School
Pathways Academy Charter School
Pazlo Education Foundation
Peabody Charter School
Phoenix Charter Academy College View
Plumas Charter School
Port of Los Angeles High School
Puente Learning Center
Redwood Coast Montessori
Redwood Collegiate Academy
Renaissance Arts Academy
Rex and Margaret Fortune School of Education
River Oaks Academy Charter School
Rocklin Academy Family of Schools
Sage Oak Charter Schools
San Diego Virtual School
San Jose Conservation Corps & Charter School
Santa Rosa French American Charter School Parent Foundation
Scholarship Prep Charter School
Sebastopol Independent Charter
Sequoia Career Academy
Shasta Charter Academy
Sherman Thomas Charter School
Sherwood Montessori
Shields for Families
Sky Mountain Charter School
Soar Charter Academy
South Sutter Charter School
Sparrow Academy
Springs Charter Schools
Stand Up California
Stand Up Sacramento County
Stellar Charter School
Stem Prep Schools
Stride, INC.
Success One! Charter
Summit Public Schools
Suncoast Preparatory Academy
Sycamore Creek Community Charter School
Synergy Academies
Tara Hughes Writing Instructor
Taylion Academy
Teach Public Schools
Tehama Elearning Academy
Temecula Valley Charter School
The Cottonwood School
The Foundation for Hispanic Education
The Grove School
The Learning Choice Academy
The O’farrell Charter Schools
The Preuss School Ucsd
Thrive Academics
Tierra Pacifica Charter
Tree of Life Charter School
Trillium Charter School
Ultra Jiu Jitsu Academy
Union Street Charter
Urban Charter Schools Collective
Valley Charter School
Valley International Preparatory High School
Valley Life Charter Schools
Valley View Charter Prep
Ventura Charter School of Arts and Global Education
Vibrant Minds Charter School
Virtual Learning Academy, Sage Oak Charter Schools
Vista Charter Public Schools
Voices College Bound Language Academies
Vox Collegiate
Westbrook Academy
Western Sierra Charter Schools
Westlake Charter School
Wildflower School
William Finch Charter School
Wushu Central Martial Arts Academy
Ypi Charter Schools
Yuba County Career Preparatory Charter School
Analysis Prepared by: Chelsea Kelley / ED. / (916) 319-2087
Date of Hearing: April 30, 2025
ASSEMBLY COMMITTEE ON EDUCATION
Al Muratsuchi, Chair
ABPCA Bill Id:AB 84 (
Author:Muratsuchi) – As Amended Ver:March 19, 2024
SUBJECT: School accountability: audits: charter schools: data systems
SUMMARY: Establishes new requirements for nonclassroom based (NCB) charter schools in the areas of auditing and accounting standards, the funding determination process, contracting process, authorization of NCB charters by small districts, and the authorizer oversight process, as specified. Specifically, this bill:
Audit and Accounting Standards
- Requires training for local educational agency (LEA) auditors, requires LEA audits to be peer reviewed, and requires the State Controller’s Office (SCO) to perform quality control reviews, as specified.
- Requires the K-12 audit guide to include schedules on pupil enrollment, pupil attendance, the 25 largest monetary transfers, pupil to teacher ratios, related loans, the expense of education, charter oversight expenses; and include audit instructions on sample section, materiality, enrollment, charter authority input, related parties, and classroom-based instruction verification.
- Requires charter schools to follow the same audit procedures and audit schedules, and use the same Standardized Account Code Structure (SACS), as school districts.
- Creates the Office of Inspector General at the California Department of Education (CDE), to be appointed by the Governor.
NCB Charter School Funding Determination
- Establishes a funding formula for NCB charter schools based on the amount of in-classroom instruction provided to pupils as follows:
- Pupils engaged in classroom-based instruction for at least 75% of their attendance, generate 100% attendance for state apportionment;
- Pupils engaged in classroom-based instruction for between 60% and 74% of their attendance, generate 92.5% attendance for state apportionment;
- Pupils engaged in classroom-based instruction for between 40% and 59% of their attendance, generate 85% attendance for state apportionment;
- Pupils engaged in classroom-based instruction for between 20% and 39% of their attendance, generate 77.5% attendance for state apportionment; and
- Pupils engaged in classroom-based instruction for between 0% and 19% of their attendance, generate 70% attendance for state apportionment.
Charter School Contracts
- Prohibits private religious organizations or schools from serving as contractors.
- Requires charter schools to participate in competitive bidding of contracts in the same manner as school districts.
- Prohibits contracts from being calculated as a percentage of charter school apportionment.
- Prohibits schools from paying for instructional programs not offered by a credentialed teacher.
- Prohibits employee compensation based on vendor contracts, student attendance or course completion.
Staff Training
- Requires staff that provide direct services to students (School Counselors and Psychologists, School Nurses, Librarians, and Student Attendance Clerks), administrators, as well as contractors who provide direct services to students that count toward instructional minutes to hold an appropriate credential, in the same manner as school districts.
Pupil Attendance Data Study
- Requires the CDE to study the feasibility of connecting the California Longitudinal Pupil Achievement Data System (CALPADS) and the attendance accounting system.
Pupil to Teacher Ratios
- Authorizes charter schools to calculate pupil-to-teacher ratios in independent study programs by one of the following methods, which currently exist for school districts and county offices of education (COEs):
- A 25 to 1 pupil-to-teacher ratio;
- An alternative pupil-to-teacher ratio negotiated as part of a collective bargaining agreement; or
- The prior year pupil-to-teacher ratio at programs operated by the high school or unified school district with the largest average daily attendance of pupils in the county or the collectively bargained alternative ratio used by that high school or unified school district in the prior year.
School District Authorizers
- Permits a NCB charter school to be authorized as follows:
- School districts < 2,500 in Average Daily Attendance (ADA) may authorize NCB charters up to 100% of district ADA;
- School districts of 2,500-5,000 ADA may authorize NCB charters up to 2,500 ADA; and
- School districts of 5,000-10,000 ADA may authorize NCB charters up to 50% of district ADA.
- Directs the State Board of Education (SBE) to reassign NCB charters that are authorized by small districts to larger district authorizers within the county or the COE, upon their next renewal.
- Includes in the definition of state receivership the probationary period following loan repayment for school districts in qualified budget status.
Authorizer Oversight and Oversight Fees for Charter Schools
- Establishes the Charter Authorizing Support Team at the Fiscal Crisis and Management Assistance Team (FCMAT).
- Requires charter school authorizers to annually perform the following oversight responsibilities for charter schools:
- Verify the percentage of pupils participating in classroom-based instruction.
- Annually verify the ADA-to-certificated-teacher ratio used by the charter school.
- Verify average daily attendance at the first, second, and annual principal apportionment reporting, including subsequent corrected reports, after performing reasonable testing of monthly enrollment and monthly attendance reports to be submitted to the chartering authority by the charter school, to determine enrollment and attendance trends and averages; and
- Perform audit compliance monitoring.
- Permits a charter authorizer to charge oversight fees not to exceed actual costs up to 2% for the 2027-28 fiscal year; and, effective July 1, 2028, permits a charter authorizer to charge oversight fees not to exceed actual costs up to 3%. Requires these expenses to be included in a separate audit schedule of the authorizer’s annual audit.
- Sunsets the moratorium on NCB charter schools as of December 31, 2025.
EXISTING LAW:
- Establishes the Charter Schools Act of 1992 which authorizes a school district governing board or county board of education to approve or deny a petition for a charter school to operate independently from the existing school district structure as a method of accomplishing, among other things, improved pupil learning, increased learning opportunities for all pupils, with special emphasis on expanded learning experiences for pupils who are identified as academically low achieving, holding charter schools accountable for meeting measurable pupil outcomes, and providing the schools with a method to change from rule-based to performance-based accountability systems. (Education Code (EC) 47605)
- Establishes a process for the submission of a petition for the establishment of a charter school. Authorizes a petition, identifying a single charter school to operate within the geographical boundaries of the school district, to be submitted to the school district. Authorizes, if the governing board of a school district denies a petition for the establishment of a charter school, the petitioner to elect to submit the petition to the county board of education. Authorizes, if the county board of education denies the charter, the petitioner to submit the petition to the SBE only if the petitioner demonstrates that the school district governing board or county board of education abused its discretion in denying the charter school. Authorizes a school that serves a countywide purpose to submit the charter petition directly to the county office of education.
- Requires, upon renewal, a charter school to be identified as either low performing, middle performing or high performing based on state dashboard accountability data. Requires that low performing, charter schools be denied, however, the school may be renewed for a two year period if the authorizer is presented with verified data that meet specified criteria and the authorizer finds it compelling. Authorizes middle performing charter schools to be renewed for 5 years. Authorizes high performing charter schools to be renewed for 5-7 years.
- Prohibits the authorization and establishment of new nonclassroom based charter schools between January 1, 2020, and January 1, 2026.
- Prohibits a charter school from receiving any public funds for a pupil if the pupil also attends a private school that charges the pupil's family for tuition. Prohibits a charter from being granted that authorizes the conversion of any private school to a charter school. (EC 47602)
- Prohibits, notwithstanding any other law, a local educational agency (LEA), including, but not limited to, a charter school, from claiming state funding for the independent study of a pupil, whether characterized as home study or otherwise, if the LEA has provided any funds or other thing of value to the pupil or his or her parent or guardian that the LEA does not provide to pupils who attend regular classes or to their parents or guardians. (EC 51747.3)
- Authorizes a charter school to receive funding for nonclassroom based instruction only if a determination for funding is made by the SBE. Requires the determination for funding to be subject to any conditions or limitations the SBE may prescribe. Requires the SBE to adopt regulations that define and establish general rules governing nonclassroom based instruction that apply to all charter schools and to the process for determining funding of nonclassroom based instruction by charter schools offering nonclassroom based instruction. Defines nonclassroom-based instruction to include, but not be limited to, independent study, home study, work study, and distance and computer-based education. (EC 47612.5)
- Requires the SBE to adopt regulations setting forth criteria for the determination of funding for nonclassroom based instruction, at a minimum the regulation to specify that the nonclassroom based instruction is conducted for the instructional benefit of the pupil and is substantially dedicated to that function. Requires the SBE to consider, among other factors it deems appropriate, the amount of the charter school’s total budget expended on certificated employee salaries and benefits, on schoolsites, and the teacher-to-pupil ratio in the school. Requires, for the 2003–04 fiscal year and each fiscal year thereafter, the amount of funding determined by the SBE to not be more than 70% of the unadjusted amount to which a charter school would otherwise be entitled, unless the SBE determines that a greater or lesser amount is appropriate. (EC 47634.2)
- Requires a charter school to transmit a copy of its annual, independent financial audit report for the preceding fiscal year to its chartering entity, the SCO, the county superintendent of schools of the county in which the charter school is sited, (unless the county board of education of the county in which the charter school is sited is the chartering entity) and the CDE, by December 15 of each year. (EC 47605)
- Requires financial and compliance audits to be performed in accordance with General Accounting Office standards for financial and compliance audits. Requires that the audit guide prepared by the SCO be used in the performance of these audits until an audit guide is adopted by the Education Audits Appeal Panel. When an audit guide is adopted by that panel, the adopted audit guide be used in the performance of these audits, and that every audit report specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the district is in compliance with those requirements. (EC 14503)
- Authorizes the independent study (IS) program for school districts, COEs and charter schools. Requires LEAs that offer IS to adopt written policies that include the length of time that may elapse between the time an independent study assignment is made and the date the pupil must complete the assigned work, missed work assignments, and there be a written agreement between the pupil and the IS program. Requires that the written agreement include processes for submitting pupil work, objectives and methods of study for the pupil’s work, resource that will be made available to the pupil, duration of the agreement, and number of credits to be earned upon completion. A pupil with an Individualized Education Program (IEP) is not authorized to participate in an IS program unless their IEP specifically provides for that participation. Requires that the IS of each pupil be coordinated, and evaluated under the general supervision of an employee of the LEA who possesses a valid certification document or an emergency credential. Establishes certificated employee-to-pupil ratios, as specified. (EC 51745–51749.3)
- Authorizes the Course Based Independent Study (CBIS) program for school districts, COEs, and charter schools for pupils enrolled in kindergarten and grades 1-12, inclusive, under the following conditions: completion of a signed learning agreement between the pupil and school, courses are taught under the general supervision of certificated employees who old the appropriate subject matter credential, and are employed by the LEA, courses are annually certified by the LEA governing board or body to be of the same rigor and educational quality as equivalent classroom-based courses and aligned to all relevant local and state content standards, requires certificated employees and pupils to communicate in person, by telephone, or by any other live visual or audio connection no less than twice per calendar month to assess whether the pupil is making satisfactory educational progress, requires an evaluation if the pupil is not making satisfactory educational progress. Requires a written agreement between the CBIS program and the pupil. Specifies that if more than 10% of the total ADA of a school district, charter school, or COE is claimed, then the amount of ADA for all pupils enrolled by that LEA that is in excess of 10% of the total ADA for the LEA is to be reduced, as specified. (EC 51749.5–51749.6)
- Requires each chartering authority to do all of the following with respect to each charter school under its authority:
- Identify at least one staff member as a contact person for the charter school;
- Visit each charter school at least annually;
- Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan (LCAP) and annual update to the LCAP required pursuant to Section 47606.5;
- Monitor the fiscal condition of each charter school under its authority; and
- Provide timely notification to the CDE if any of the following circumstances occur or will occur with regard to a charter school for which it is the chartering authority:
- A renewal of the charter is granted or denied;
- The charter is revoked; or
- The charter school will cease operation for any reason. (EC 47604.32)
- Authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school, not to exceed 1% of the revenue of the charter school. Authorizes a chartering authority to charge for the actual costs of supervisorial oversight of a charter school not to exceed 3% of the revenue of the charter school if the charter school is able to obtain substantially rent free facilities from the chartering authority. Authorizes a LEA that is given the responsibility for supervisorial oversight of a charter school by the SBE to charge for the actual costs of supervisorial oversight and administrative costs necessary to secure charter school funding. (EC 47613)
FISCAL EFFECT: Unknown
COMMENTS:
Need for the bill. According to the author, “Upon the discovery of large-scale fraud perpetrated by a number of nonclassroom based charter schools, the Legislature imposed a moratorium on the establishment of new NCB charter schools, with a commitment to reform NCB charter schools.
One example of such fraud includes People v. McManus, where the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen A3 Charter Schools. A3 Charter Schools created a partnership with a Little League summer sports program and enrolled Little League players in their charter school during the summer months to generate state attendance funding, despite A3 Charter Schools having never provided instruction to these little league players. A3 Charter Schools also transferred pupils between charter schools in their network to collect more than one school year of funding per pupil. The A3 Charter Schools case revealed many weaknesses in the State’s education system in the areas of pupil data tracking, auditing, and school finance.
Loopholes in state law have allowed these unscrupulous practices at NCB charter schools to continue unchecked, wasting State taxpayer dollars. The state must enact comprehensive reforms, consistent with the 2024 Legislative Analyst’s Office (LAO)/FCMAT report to the Legislature and the Controller’s Taskforce report, to combat fraud before the moratorium on NCB charter schools expires in January 2026. AB 84 does that by improving transparency and accountability among charter school authorizers and charter schools.”
Background on charter schools. According to the CDE, as of the 2024-25 school year, there are 1,280 active charter schools in California, with an enrollment of over 709,000 pupils. Some charter schools are new, while others are conversions from existing public schools. Charter schools are part of the state's public education system and are funded by public dollars. A charter school is usually created or organized by a group of teachers, parents, community leaders, a community-based organization, or an education management organization. Charter schools are authorized by school district boards and county boards of education. A charter school is generally exempt from most laws governing school districts, except where specifically noted in the law. Specific goals and operating procedures for the charter school are detailed in an agreement (or "charter") between the authorizing board and charter organizers.
What is nonclassroom based instruction? Nonclassroom based instruction includes computer-based instruction using software modules, teacher-directed independent study, and traditional homeschool parents who enroll their children in independent study charter school programs.
A nonclassroom based charter school is defined as a school with less than 80% of its total ADA that is classroom based, in which instruction takes place in a classroom setting. As of April 2021, there were 304 charter schools considered to be NCB. Of that number, 105 charter schools self-identified as providing exclusively virtual or primarily virtual instruction.
Existing law defines charter school nonclassroom based instruction as instruction that does not meet the requirements of classroom-based instruction. Those requirements are:
- Charter school pupils are engaged in required educational activities and are under the immediate supervision and control of a certificated teacher;
- At least 80% of the instructional time offered by the charter school is at the schoolsite (defined as a facility that is used primarily for classroom instruction); and
- Pupil attendance at the schoolsite is required for at least 80% of the minimum instructional time.
What does research say about pupil academic achievement at NCB charter and virtual schools? Research indicates that students at NCB charters and virtual schools achieve lower rates of academic achievement compared to students at classroom-based schools. One review notes, “By any measure, online charter schools perform significantly worse than traditional public schools, and this negative impact carries across every demographic of pupils. So while online schools are indeed needed for pupils whose requirements cannot be met by brick-and-mortar schools, it’s clear that the quality of education offered by online charter schools is significantly below the state average. As public policy, legislators should be looking to limit the number of students in online charter schools and should resist calls to expand this sector.” (Lafer, 2021)
A 2015 national analysis of NCB charter schools found, “The differences were much larger between classroom-based and non-classroom-based charter schools with the nonclassroom-based charter schools having lower achievement. This result is consistent with a study of Ohio charter schools that found virtual schools performing poorly relative to traditional public schools (TPSs) and other charter schools (Zimmer, et al., 2009). It is consistent as well with findings for Pennsylvania, which has among the highest proportion of online charter pupils. The Center for Research on Education Outcomes (CREDO) (2011) report on Pennsylvania charter schools found that all eight cyber schools then operating performed significantly and substantially worse on both mathematics and reading than TPSs.” (Epple, et al., 2015)
The following chart shows the California statewide average student achievement at traditional brick and mortar schools, versus the average pupil performance at online charter schools. This data excludes all schools that mainly serve pupils who are credit deficient (known as DASS alternative schools), however, when DASS schools are included, the difference in pupil performance between classroom based schools and online charter schools is even more significant.
(Source: In the Public Interest (Lafer, 2021))
Numerous studies indicate that online instruction is not as effective as regular classroom instruction:
- A 2019 study by the CREDO at Stanford University of charter schools in South Carolina concluded that students attending online charter schools have weaker growth in both reading and math compared to the average traditional public school. The gap translates to 35 and 118 fewer days of learning for online charter students in reading and math, respectively. In contrast, students in brick-and-mortar charters post academic progress in reading and math similar to that of the average traditional public school students.
- A CREDO study in 2019 of students in New Mexico attending online charter schools found those students to have substantially weaker growth in both reading and math than the average traditional public school students. The gaps translate to 130 fewer days of learning in reading and 118 fewer days of learning in math for online charter students. In contrast, students in brick-and-mortar charters exhibit stronger growth in reading (equivalent to 24 extra days of learning) and obtain similar learning gains in math as compared with the average traditional public school students.
- A CREDO study in 2019 of students in Ohio attending online charter schools found students to have substantially weaker growth in both reading and math than the average traditional public school students. The gaps translate to 47 fewer days of learning in reading and 136 fewer days of learning in math for online charter students. In contrast, students in brick-and-mortar charters exhibit stronger growth in reading (equivalent to 24 days of extra learning) and obtain similar learning gains in math as compared with the average traditional public school students.
- A CREDO study in 2019 of students in Pennsylvania attending online charter schools found students to have weaker growth in both reading and math compared to the average traditional public school. These gaps translate to 106 fewer days of learning in reading and 118 fewer days of learning in math. Students attending brick-and-mortar charter schools however exhibit positive growth in reading compared to the average traditional public school students, gaining about 24 days of learning. In math, brick-and-mortar charter school students perform similarly to the average traditional public school students.
- A CREDO study in 2019 of students in Idaho attending online charter schools found students to have similar growth in reading and weaker growth in math compared to the average traditional public school student. The gap translates to 59 fewer days of learning in math for online charter students. The study found no learning loss in reading associated with online charter schools in Idaho. Students in brick-and mortar charters exhibit stronger growth in reading and math, equivalent to 30 and 35 extra days of learning, respectively, compared with the average traditional public school students.
- A CREDO study in 2015 concluded that the learning deficit of virtual schools is equivalent to receiving 180 fewer days of math instruction and 72 fewer days of reading instruction. The study's author said that the learning in math was so small that it was "literally as though the student did not go to school for the entire year."
- A CREDO study in 2011 of charter school performance in Pennsylvania found that each of that state's 8 online charter schools ("cyber schools") significantly underperformed brick-and-mortar schools and regular (non-virtual) charter schools in reading and math.
- A year review of virtual schools in Wisconsin by the Gannett Wisconsin Media Investigative Team found that pupils receiving online instruction "often struggle to complete their degrees and repeat grades four times as often as their brick-and-mortar counterparts," and that they "trail traditional students in every subject but reading."
- A 2011 report from the Office of the Legislative Auditor in Minnesota reported that full-time online pupils were more likely to completely drop out of school and made less progress on state standardized math tests than pupils in traditional schools.
- A 2011 report from the Ohio Department of Education rated only three of Ohio's 27 virtual schools as "effective" or "excellent."
- A 2006 performance audit by the Colorado Department of Education of that state's virtual schools found that, "in the aggregate, online students performed poorly on the CSAP (Colorado State Assessment Program) exams and had higher repeater, attrition, and dropout rates."
A report by In the Public Interest (Virtual Public Education in California, 2015) focused specifically on California Virtual Academy (CAVA) schools, and concluded that "students at CAVA are at risk of low quality educational outcomes, and some are falling through the cracks entirely, in a poorly resourced and troubled educational environment." Among the concerns identified by the report are the following:
- In every year since it began graduating pupils, except 2013, CAVA has had more dropouts than graduates.
- Pupils are eligible to be counted as having attended with as little as one minute of login time each day.
- K12 California (the California subsidiary of K-12, Inc.) pays itself for services out of CAVA school bank accounts that it (K12 California) manages.
- Competitive bidding is prohibited: K12 California contractually prohibits CAVA schools from seeking another vendor for services that K12 California is willing and able to perform.
- CAVA teachers report that the "vast majority" of the work they do is clerical, preventing them from spending sufficient time teaching.
- Limited local control: individual CAVA location governing boards operate under contract with K12 California and do not "have much leeway in terms of budget, program and contracting decisions independent from K12 California."
- K12, Inc. charges CAVA schools more than they can reasonably pay for administrative and technology services. The shortfall is covered by "budget credits" that are extended by K12, Inc., which results in a "perpetual debt" relationship between CAVA schools and K12, Inc.
- CAVA pupils have lower academic achievement, higher dropout rates, and higher turnover than pupils enrolled in brick-and-mortar schools.
Virtual schools have consistently been shown to underperform brick-and-mortar schools by wide margins. At the same time, California has invested heavily in policies to improve pupil outcomes, including the adoption of rigorous academic content standards, assessments aligned to those standards, and the use of evaluation rubrics (the "California School Dashboard") to monitor school and district performance and identify districts for targeted assistance.
Recent A3 Charter Schools fraud case reveals significant weaknesses in nonclassroom based charter school law. Numerous charter school fraud cases have been documented in recent years including, but not limited to: A3 Charter Schools, Magnolia Charter School, Tri-Valley Learning Corporation, among others.
In People v. McManus the San Diego County District Attorney’s Office indicted 11 defendants in a fraud scheme involving nineteen charter schools (A3 Charter Schools). The case revealed many weaknesses in state public charter school law in the areas of pupil data tracking, auditing, school finance, and oversight, which resulted in A3 schools surrendering more than $210 million, 13 houses, and numerous shares in third-party companies.
- Lack of pupil data tracking. Currently, charter schools submit aggregate attendance data for each school without any information about individual pupils. Oversight agencies do not maintain individual pupil data about enrollments in charter schools they oversee for state funding purposes. One A3 charter school was found to be paying a private company to recruit and collect personal information from pupil athletes. The school then enrolled the athletes in the charter school without their knowledge—thereby fraudulently generating ADA—and paid the recruiting company a portion of the public funds generated as a finder’s fee.
- Multi-track calendar abuses. The A3 schools were found to have deceived the state into paying them significantly more funds by manipulating the “multi-track year round calendar,” which charter schools are currently authorized to use. The A3 schools would (1) run a fake summer school to collect funding for pupils that never knowingly enrolled, (2) inflate their fraudulent summer school attendance numbers—to the tune of about 60%—by offering fewer days of fake summer school instruction, and (3) transfer pupils between different A3 schools, increasing attendance fraudulently by another roughly 40%.
- Lack of meaningful audit requirements. The annual audits required by law found little to no malpractice by A3 schools, for several reasons. First, auditors are not required to complete any specialized up-front or ongoing training in school finance or law to audit a charter school. Second, charter schools can choose their auditors—A3 schools were shown to have fired their auditing firms and hired less experienced firms in the rare event that audit findings were made. Third, NCB charter schools are allowed to pick their own samples of pupil documentation showing compliance with independent study laws—enabling A3 to hide the fraudulent aspects of their operation from auditors. Fourth, auditors are not required to audit the education program received by pupils, only compliance with documentation. In the A3 schools, many children were enrolled from sports teams, believing they were participating in a fundraiser and had no knowledge they were enrolled in a charter school at all.
- Flawed funding determination process. While existing law requires that NCB charter schools only receive full funding in exceptional circumstances—when at least 80% of funding is spent directly serving pupils—the current funding determination process essentially funds all schools at 100%. This is because existing regulations define “instructional and related services” very broadly, and charter schools can meet these spending benchmarks without necessarily spending money on pupils. Further, NCB charter schools are only required to request a funding determination and provide compliance documentation to the SBE every five years.
- Perverse financial incentives for charter school authorizers. Existing law allows charter authorizers to collect oversight fees from charter schools under their authority but does not require authorizers to demonstrate that the fees are spent on meaningful school oversight. Small school districts that approve NCB charter schools serving pupils not located in the district can earn significant oversight fees—creating a built-in incentive to overlook poor charter school practices. For example, Dehesa Elementary School District approved over ten charter schools all providing NCB programs. The district’s oversight fees for the 2017-2018 school year were more than its entire expenditures for all employees hired by the district. When the district learned of improprieties from their charter schools it took no meaningful action. Ultimately, the district collected the oversight fees and only acted to revoke the A3 Charter Schools under its authority once law enforcement was involved.
The chart below illustrates a sampling of current small school districts that have authorized large numbers of nonclassroom based charter schools.
School District Name | School District ADA | Authorized Charter School ADA |
New Jerusalem Elementary | 22 | 4,500 |
Oro Grande | 109 | 3,738 |
Dehesa Elementary | 145 | 8,532 |
Maricopa Unified | 300 | 6,067 |
Julian Union Elementary | 311 | 3,502 |
Campbell Union | 876 | 6,417 |
Acton-Agua Dulce Unified | 1,080 | 13,775 |
(Source: California School Boards Association)
Small district authorizers. Most NCB charter schools are authorized by small rural school districts. Many of these small districts are stretched thin with regard to staff, and in some cases the Superintendent holds many roles like math teacher and school bus driver. These small districts do not have the capacity to provide meaningful charter school oversight. In some cases, these small school districts authorize NCB charter schools as a means to balance their district budgets, through the collection of oversight fees. There are very small school districts authorizing large NCB charter schools. This bill matches the capacity of small school districts to provide meaningful charter oversight and permits NCB charter schools to be authorized as follows:
- School districts < 2,500 in ADA may authorize NCB charters up to 100% of district ADA;
- School Districts of 2,500-5,000 ADA may authorize NCB charters up to 2,500 ADA; and
- School Districts of 5,000-10,000 ADA may authorize NCB charters up to 50% of district ADA.
These requirements will significantly limit, and in some cases stop, the authorization of NCB charters by districts less than 2,500 ADA, and will slow the growth of authorization of NCB charters at districts between 2,500-10,000 ADA.
Some charter schools give education dollars to parents. Some NCB charter schools cater to families that want to have the parent serve as the primary person delivering instruction and these schools allow parents to direct how their children’s education dollars are spent.
As of April 2025, the South Sutter Charter School’s website states, “For the 2024/25 school year, family accounts are funded up to the following amounts:
- $4,150 – High School
- $3,650 – 1st-8th Grade
- $2,650 – TK-K Grade”
As of April 2025, the Arete Charter Academy’s website states, “for the 2025-2026 school year, TK-12th grade students receive $4500 of instructional funding per school year. Arete will use $700 to purchase student curriculum or academic instruction. The remaining $2,550 ($1275 per semester) is used for the parent’s choice of field trips, supplemental materials, technology, tutoring and/or extra enrichment courses whether provided at the Arete Resource Center or off-site at a community vendor. $750 is used for targeted academic support in the form of one on one or small group (five or less students) tutoring/intervention. If the student is meeting grade level standards those funds become unrestricted enrichment funds. $500 is used for expanded learning opportunities.”
Arete Charter Academy’s list of vendors includes, but is not limited to:
- Horsemanship
- Swim Lessons
- CrossFit training
- Golf Pro Lessons at a Golf course
- Music Lessons
- Tutoring Services
- Dance Lessons
- Cooking Lessons
Investigative journalism found examples of inappropriate use of public school funds through vendor contracts. Investigations into the operations of a few NCB charter schools regarding possible inappropriate use of public school funds are ongoing. A 2019 investigation by the San Diego Union-Tribune found:
- Trips to Disneyland and SeaWorld. “In California, there’s a way parents can use money from the government to buy multi-day Disneyland Park Hopper passes, San Diego Zoo family memberships, tickets to Medieval Times and dolphin encounters at SeaWorld. There are a handful of charter schools that give pupils’ families as much as $2,800 to $3,200 — tax dollars sent to the charter schools — every year to spend on anything they want from a list of thousands of home-school vendors approved by the charters, according to the schools’ websites. AdvertisementIf you live in California and you’re not taking advantage of this, I don’t know what to say,’ said Karen Akpan, a home-school charter parent of four who lives in Beaumont. She wrote a recent blog article describing how she used the educational funds to pay for a family trip to Disneyland, Chicago CityPASSes, and Legoland tickets, as well as computer coding kits, educational toys, books, and subscription cooking kits for her kids.”
- California is the only state paying for these types of services. “’I don’t know of any states where they’re paying for the kinds of things they’re paying for in California,’ said Mike Smith, president of the Home School Legal Defense Assn, a national group that advocates for homeschooling families. ‘Those schools don’t have as many fixed costs as a school that would have a large campus, paying for heat and custodians and all of that. But yet, they get the same amount of money per student from the state,’ said Stephanie Hood, a charter school adviser with the Homeschool Assn. of California. It is relatively easy for home-school charters to recruit pupils, because enrollment happens online and families can request vendors near where they live. Valiant advertised enrollment to families in 34 counties on its website, even though its schools were authorized to operate in only three counties. ‘As you know, that’s why some of the problems have occurred, because there’s so much money in it,’ Smith said. ‘It’s very easy to do. ... It’s just ripe for the kind of things that are going on.’”
- Public education dollars spent at private schools. Some charter school vendors are businesses or nonprofits that cater to homeschoolers and operate like private schools in that they charge tuition and employ their own teachers, who often are not credentialed by the state. Some vendors provide a wide variety of classes, ranging from electives such as sewing and cooking, to core classes such as traditional English, math and science. Many of these vendors do not call themselves schools, but rather enrichment centers, learning centers, home school co-ops or tutoring academies. Some larger vendors, such as Homeschool Campus and Discovery of Learning, have several campuses, often at churches. Enrolling in a home school charter can allow the pupil to use the charter school’s funds to pay the tuition for these schools, if their assigned charter school teacher approves it.
- Public education dollars spent at religious schools. AdvertisementThere also are religiously affiliated vendors, like the Christian-owned Eden Learning Academy, which until recently said on its website that it is based on a ‘Christian Worldview,’ or the Christian Youth Theater, which says on its website that part of its objective is to ‘share the love of Christ in word and deed.’” Inspire Charter School lists Eden Learning Academy and the Christian Youth Theater as vendors on their website.
Funding determination. As noted earlier in this analysis, NCB charter schools are required to obtain a funding determination that is approved by the SBE. This funding determination establishes the percentage of funding the NCB charter school will receive compared to all other traditional classroom based schools. Most charter schools apply for a 100% NCB funding determination. To do so, they must meet the following criteria:
- Spend at least 40% of total public revenue on instructional certificated salary and benefits;
- Spend at least 80% of total public revenue on instruction related services; and,
- Not exceed a 25:1 pupil to teacher ratio.
A 2021 report by In the Public Interest illustrates the possible profiteering permitted by the flawed funding determination system at California’s NCB charter schools. The report states:
Overpayment for online charter schools is dramatically illustrated in the case of Connections Academy and its parent corporation Pearson. Alongside the Connections Academy schools, Pearson also operates an online private school, the Pearson Online Academy, for Americans stationed abroad who want their children to get an American education or for those in states that do not allow charter schools.
The curriculum for Pearson Online Academy and California Connections Academy schools are the same – both the list of courses and the description of each course’s content are virtually identical in both schools. Indeed, when asked if the two schools’ classes are sufficiently similar so that a student could seamlessly transfer between one and the other in the middle of a school year, a Pearson company representative stated that the courses line up “apples to apples – so close it’s ridiculous.” Another Pearson representative explained that “the private side [Pearson Online Academy] writes the curriculum for the Connections side,” and as a result “transferring credits is no problem.”
But while the product may be the same, the costs for these courses are dramatically different. California taxpayers pay approximately $10,300 for every student who attends a Connections Academy school. By contrast, the tuition for enrolling in the Pearson Online Academy is just $4,800 for an elementary school student, $5,880 for middle school, and $6,880 for high school. It seems then that California taxpayers are paying a markup of at least 35 percent (approximately $3,500 per student) above all costs, including reasonable profit. So across all the schools in this chain, California taxpayers are wasting over $22 million per year.
In other words, if the state of California simply paid all Connections Academy students to attend Pearson’s private online school, taxpayers would save over $22 million per year.
LAO/FCMAT Review of NCB Charter Funding Determination Process. In their 2024 report to the Legislature, the LAO and FCMAT made the following recommendations:
Recommend Several Changes to Improve Funding Determination Process. We provide several specific recommendations the Legislature could enact to improve the funding determination process. Our recommendations are intended to narrow the process to a smaller subset of schools, improve the comprehensiveness and quality of data submitted to CDE, and streamline some aspects of the process. Most significantly, we recommend the Legislature:
- Narrow the Definition of a Nonclassroom-Based Charter School. We recommend narrowing the definition of a nonclassroom-based charter school so that the designation excludes those schools that provide the majority of their instruction in person. This would exclude charter schools whose programs have cost structures that are similar to traditional classroom-based programs.
- Improve Quality of Data Submitted to CDE. To assist CDE in efficiently reviewing and processing funding determination forms, we recommend requiring data submitted by charter schools be consistent with their annual audits. We also recommend several changes that would require information submitted to CDE be subject to annual audits.
- Use Multiple Years of Data for Funding Determinations. We recommend the funding determinations take into consideration a school’s aggregate spending for all years since the previous funding determination. This would ensure school expenditures are aligned with the funding determination thresholds consistently over time.
Consider Changes to Charter School Oversight. We also provide several recommendations for the Legislature to consider regarding broader oversight of charter schools. These issues generally apply to all charter schools, though in a few cases we highlight specific issues related to nonclassroom-based charter schools and virtual charter schools. Most significantly, we recommend the Legislature consider the following:
- Improvements to Oversight by Charter School Authorizers. We recommend the Legislature consider several changes to improve the quality of authorizer oversight. Specifically, we recommend the Legislature set limits on district authorizers by district size and grade, increase minimum requirements for authorizers, and consider an alternative authorizing structure for virtual schools.
- Enhancements to Charter School Audits. Current audit requirements often do not address the complexities and unique flexibilities of charter school finances. We recommend the Legislature align the audit process for charter schools to that of school districts and add audit requirements that would address issues specific to charter schools.”
Audit standards identified as flawed as a result of the A3 Charter School Case. The A3 Charter case illustrated many faults in the way that charter schools are audited compared to school districts.
- Current law allows charter schools to be audited as nonprofit corporations rather than as governmental entities. Nonprofit corporation audits are not nearly as detailed as governmental entity audits. This bill creates parity between charter schools and school districts with regard to audit procedures and schedules so that charter school audits will be as detailed as school districts, and use the Standardized Account Code Structure required of school districts.
- Current law does not require school district and charter school auditors to receive any special training on auditing schools. This bill requires training for school district and charter auditors and updates the audit peer review process to include school audits.
- The law does not provide the CDE the authority to investigate wrongdoing among school districts and charter schools. The federal government has established an Office of the Inspector General at each federal department, including the Department of Education. This bill emulates the federal process and creates the Office of Inspector General at the CDE.
- Current law does not direct auditors to review many aspects of independent study programs at charter schools. This bill updates the audit guide to include sampling guidance, pupil to teacher ratios, the 25 largest monetary transfers, and pupil attendance.
State Controller’s Charter School Audits Task Force. In response to the A3 Charter School fraud case, a San Diego Superior Court Judge signed a court order to approve the formation of a multi-agency task force, known as the Multi-Agency Charter School Audits Task Force lead by the SCO to combat charter school fraud. The 2024 Task Force report made the following recommendations:
The Task Force extensively discussed the current state of California charter schools and developed recommendations based on the combined expertise, experience, and knowledge of multi-disciplinary Task Force members. These recommendations are intended to foster a culture of transparency and accountability by further strengthening charter school audit function components. The recommendations are organized into the following sections of this report:
• Certified Public Accountant Firm Authorization, Qualifications, Training, Evaluation, and Compliance with K-12 Audit Guide;
• Certified Public Accountant Firm Selection, Rotation, and Late Audit Report Notifications:
• K-12 Audit Guide Procedures; and
• Financial Statement Audit Report Disclosures.
The Task Force determined that most of the recommendations should be applied to all local education agencies including school districts, county offices of education, and charter schools, providing opportunities to strengthen the audit functions across the entire local education agency system. To combat fraud in charter schools, it is important that oversight agencies, in addition to those performing charter school audit functions, implement strong internal and monitoring controls to timely identify and mitigate potential fraud. The control and monitoring functions include the charter school petition and approval process, the charter school accountability systems, the authorizer monitoring of charter schools, and the respective oversight functions of the charter school governing board, county offices of education, the California Department of Education, and the State Controller’s Office.
Teacher assignments, school calendars, and pupil attendance. Current law requires IS programs to operate with specified pupil-to-teacher ratios. Some charter school networks, however, have exceeded these ratios by assigning teachers different groups of pupils at multiple schools. While on paper, it appears that a teacher has a 25-to-one pupil-to-teacher ratio at a single school, in reality, the teacher has a much higher pupil-to-teacher ratio across their entire teaching assignment at multiple schools. This bill requires parity in pupil-to-teacher ratios in independent study programs across a teacher’s assignment.
The A3 Charter School case demonstrated the ability of schools to manipulate their calendars to collect far more than one year of attendance funding per pupil from the State. The A3 Charter School used the multitrack year-round calendar to run a summer program and erroneously enrolled Little League players over the summer months, enrolled them without their parent’s knowledge, and collected attendance funding without providing any instruction to these children. Further, A3 Charter Schools transferred students between multiple schools in their network over the summer months, using the multitrack year-round schedule, and altered their calendar, to collect much more than one year of attendance funding per student. This bill prohibits multi-year-round track calendars for school districts and charter schools to protect the State from paying more than one year of attendance per pupil. The bill further provides a SBE waiver in the case of severe facility shortages, for example, those facility shortages seen in Elk Grove Unified School District.
AB 1507 (Smith, McCarty, O’Donnell) in the 2019-20 Session prohibits NCB charters from establishing satellite facilities outside the boundaries of the district in which they are authorized. Due to the fact that these schools cannot establish facilities in adjacent counties, this bill proposes to permit NCB charter attendance only within the county in which the school is authorized to facilitate increased in-person instructional opportunities. With the attendance boundary more closely matching the area in which the school is authorized to have facilities, more children will be afforded the opportunity to have in-classroom learning opportunities.
CALPADS and ADA data systems. The State’s attendance accounting system is not connected to the CALPADS. In other words, when a charter school or school district submits its ADA information to the State, that ADA is not reported along with pupil identification. The State, therefore, does not know which pupils ADA is being claimed when it processes attendance apportionments. Current law prohibits a school from claiming more than one year of attendance per pupil, however, more than one year of attendance can be paid per pupil if the pupil attends more than one school. This bill requires, by January 2030, the CDE to study the feasibility of connecting CALPADS and the attendance accounting system to allow the State to determine when a pupil generates more than one year of attendance within one calendar year. This is the only way for the State to know precisely when one year of attendance has been generated for a particular pupil, and when the State is paying more than one year of attendance per pupil, per year.
Authorizer oversight and oversight fees. Charter school authorizers play a vital role in providing oversight over both the academic and fiscal aspects of the charter schools they authorize. In order to provide better oversight, this bill requires increased targeted oversight by authorizers in the following areas:
- Attendance accounting;
- Pupil-to-teacher ratios;
- Percentage of pupils engaged in classroom-based instruction; and
- Audit compliance monitoring.
In order to compensate authorizers for these increased oversight responsibilities this bill proposes to increase oversight fees from 1% of the charter school’s revenue (current law) to 3% of the charter school’s revenue by July 1, 2028. Further, these oversight fees will be included in a separate audit schedule in the school district annual audit.
Charter school authorizers have very few resources for technical assistance and support of their charter authorizing and oversight work. A few charter authorizers have an office of staff focused on charter school authorizing and oversight, however most authorizers are so small that they do not have any dedicated charter school staff. In the past, these LEAs have relied on the assistance of the Charter Authorizer Regional Support Network (CARSNet), while the program was funded with a federal grant. Through CARSNet, authorizers received training and attended conferences to polish their expertise in authorizing and oversight. During its tenure, CARSNet held 67 regional trainings and conferences with nearly 1,300 participants from across California. The federal grant funding expired, and the program lapsed over the last few years.
This bill proposes to re-establish the program as the Charter Authorizing Support Team, managed by the FCMAT. This program will provide the necessary training and technical assistance that charter authorizers need as they consider charter school petitions and provide meaningful oversight of the charter schools they authorize.
Arguments in support. The California School Employees Association states, “The California School Employees Association (CSEA), AFL-CIO, supports Assembly Bill (AB) 84 (Muratsuchi), our sponsored legislation to implement comprehensive reforms to nonclassroom-based charter (NCB) law aligned with the recommendations issued by the Legislative Analyst’s Office (LAO), the Fiscal Crisis and Management Assistance Team (FCMAT), the Multi-Agency Charter School Audits Task Force, and the California Charter Authorizing Professionals.
In 2019, the San Diego County District Attorney charged eleven people in a $400 million fraud scheme involving the nonprofit NCB charter operator A3 Education. A3’s leadership—Sean McManus and Jason Schrock—pulled off what has become known as one of the biggest charter school scandals in U.S. history by exploiting gaps in the law and deficiencies in charter authorizer oversight.
A3 fraudulently enrolled students who never actually took any classes in their schools by hiring enrollment workers to contact youth athletic organizations. A3 pledged to donate money to the athletic programs in exchange for each student who signed up and pocketed the difference—totaling as much as $1,550 per child. The charter management organization (CMO) avoided scrutiny for their practices by seeking small school districts without adequate oversight staff to be their authorizers. McManus and Schrock exerted total control over their network of schools by acting as both the administrators of the online schools as well as a vendor providing back-end business services.
The A3 case clearly exemplifies how California’s existing system of oversight for NCB charters—carried out by public authorizers, annual financial audits, and the State Board of Education through its NCB funding determination process—is woefully inadequate. That is why the Legislature in 2019 issued a moratorium on the establishment of any new NCB charters in California. This moratorium gave time for experts from the LAO and FCMAT to investigate these issues and propose comprehensive solutions. In addition, San Diego Superior Court Judge Robert C. Longstreth ordered the State Controller to chair a multi-agency task force to develop audit criteria and best practices for detecting and curtailing future fraud in charter schools. With the NCB charter moratorium set to expire in January 2026, the Legislature must act this year to strengthen our laws and prevent another case like A3.”
Arguments in opposition. Excel Academy states, “State funding policy must prioritize and uphold the truth that all students have equal value and deserve and warranty equal funding regardless of the type of school they choose, whether county office operated, district operated, or public charter school operated, and must be supported through equal opportunity to choose the type of learning model and program that best matches their needs and interests. State funding policy must never discriminate against students who choose alternative education models other than a physical classroom model that are a better match for them, nor should public funding policy pick winners and losers among students.
As currently written, AB 84 will severely limit educational choices and result in significant harm to high quality NCB public charter school students and schools at a time when more choices in the public school system can help meet the needs of underserved students.”
Recommended Committee Amendments. Staff recommends the bill be amended to:
- Require the Education Inspector General to report to the SBE instead of the SPI.
- Clarify that the schedule of pupil enrollment shall be by grade and reflect the enrollment recorded on the last day of the school month as defined in existing law.
- Limit the required audit schedule of pupil-to-teacher ratios to independent study programs.
- Clarify that the audit schedule of pupil enrollment also verify pupil residency and verify both by sampling residency documentation provided at the time of enrollment, instead of obtaining written confirmation from a parent or guardian.
- Clarify that the audit sampling of payments include credit card statements, debit card statements and other electronic forms of payment.
- Require new authorizer oversight requirements commence July 1, 2028. Authorize charter authorities to charge the actual cost of oversight up to 2% beginning in the 2028-29 fiscal year and up to 3% beginning July 1, 2029.
- Authorize a NCB charter in operation before December 31, 2025 that exceeds the ADA thresholds for small district authorizers to continue to be authorized by their existing chartering authority if that school district employs four executive level staff members whom have job responsibilities in the following areas: Superintendent, Chief Business Official, Human Resources, Special Education, and Curriculum.
- Require that dependent charter schools authorized pursuant to Section 47605.5 shall have no adjustment made to their funding determination.
- Clarify that charter schools are subject to Section 45037 and 41372, and specify that NCB charters shall expend 40% of the charter school’s current expense of education calculation on salaries of classroom teachers, consistent with the existing funding determination percentage.
Related legislation. SB 719 (Cabaldon) of the 2025-26 Session would make changes to the auditing standards for local educational agencies.
SB 414 (Ashby) of the 2025-26 Session would establish new requirements for nonclassroom based (NCB) charter schools in the areas of auditing and accounting standards, easing restrictions on the funding determination process, adding requirements to school contractors, and adding requirements to the authorizer oversight process with regard to enrollment and attendance data and credit card monitoring, as specified.
SB 1477 (Ashby) of the 2023-24 Session would have required the governing board of a charter school to review, at a public meeting, the annual audit of the charter school for the prior fiscal year; requires auditors of NCB charter schools to perform specified activities; and requires all LEAs to only enter into an agreement for educational enrichment activities with a vendor that is vetted and approved pursuant to specified criteria. This bill was held in the Assembly Education Committee.
AB 1316 (O’Donnell) of the 2021-22 Session would have established new requirements for NCB charter schools in the areas of auditing and accounting standards, the funding determination process, adding requirements to the contracting process, IS program requirements, required teacher to pupil ratios, limiting authorization of NCB charters by small districts, and adding specificity to the authorizer oversight process, as specified. This bill was held on the Assembly Floor.
SB 593 (Glazer) of the 2021-22 Session would have required the FCMAT to offer auditors of NCB charter schools training on the review of charter school financial documents to better identify irregular practices, requires the governing board of a charter school to annually review, at a public meeting as an item on the agenda, the annual audit of the charter school for the prior fiscal year, requires all independent study by pupils to be coordinated, evaluated, and under the general supervision of an employee of the LEA who possesses a valid certificate, permit, or other document required by law, and requires all LEAs to only enter into an agreement for the provision or arrangement of educational enrichment activities with a vendor that is vetted and approved pursuant to prescribed criteria. This bill was held in the Assembly Education Committee.
AB 2990 (C. Garcia) of the 2019-20 Session would have prohibited a charter school from providing financial incentives to a pupil or a parent of a pupil for educational enrichment activities; required a nonclassroom-based charter school to enter into an agreement for the provision of an educational enrichment activity only with a vendor that has been properly vetted and approved; required the governing body of a nonclassroom-based charter school to establish policies and procedures to ensure educational value, pupil safety and fiscal reasonableness before approving any contract for educational enrichment activities; and prohibited educational enrichment activity funds from being used for tuition at a private school or for activities, materials and programs that are religious in nature. This bill was held on the Assembly Floor.
AB 1505 (O’Donnell), Chapter 486, Statutes of 2019, established a two year moratorium on the establishment of nonclassroom based charter schools until January 1, 2022.
AB 1507 (Smith), Chapter 487, Statutes of 2019, prohibits charter schools from being located outside the boundaries of their authorizer and, authorizes nonclassroom-based charter schools to establish one resource center within the jurisdiction of the school district where the charter school is located.
SB 1362 (Beall) of the 2017-18 Session would have expanded the existing oversight requirements of, and increased the oversight fees that can be charged by, charter school authorizers; changed the charter petition review process for school district and COEs governing boards; added special education and fiscal and business operations content to the information that must be included in a charter petition; expanded the authority of a governing board to deny charter petitions; and, required the Legislative Analyst to submit a report to the Legislature on special education services by charter schools. This bill was held in the Senate Education Committee.
SB 329 (Mendoza) of the 2015-16 Session would have required a school district or COE, as part of its review of a charter petition, to consider 1) a report assessing its capacity to conduct oversight of the charter school and 2) a report of the anticipated financial and educational impact on the other schools for which the school district has oversight obligations. This bill was held in the Senate Appropriations Committee.
AB 8 X5 (Brownley) of the 2009-10 Session proposed comprehensive changes to the Education Code consistent with the federal Race to the Top (RTTT) program. This bill would have addressed the four RTTT policy reform areas of standards and assessments, data systems to support instruction, great teachers and leaders and turning around the lowest-achieving schools. This bill would have deleted the statewide charter school cap; proposed enhanced charter school fiscal and academic accountability standards. This bill was held in the Senate Education Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
California Labor Federation, Afl-cio
California School Boards Association
California School Employees Association
California State Pta
Capistrano Unified School District
Cft- a Union of Educators & Classified Professionals, Aft, Afl-cio
Public Advocates
Public School Defenders Hub
Oppostion
Achieve Charter Schools
Action Music Lessons
Alder Grove Charter School
All Tribes American Indian Charter School
Allegiance Steam Academy
Alliance College-ready Public Schools
Alma Fuerte Public School
Alpha Public Schools
Alta Public Schools
America's Finest Charter School
American Heritage Charter Schools
Annenkov Music School
Antioch Charter Academy
Antioch Charter Academy Ii
Ararat Charter School
Arts in Action Community Charter Schools
Aspen Public Schools, INC.
Aspire Public Schools
Association of Personalized Learning Schools & Services (APLUS+), the
Aveson Schools
Big Picture Educational Academy
Birmingham Community Charter High School
Bridges Charter School
Bridges Preparatory Academy
Brookfield Engineering Science Technology (best Academy)
California Charter Schools Association
California Health Coalition Advocacy
California Montessori Project
California Online Public School
California Pacific Charter Schools
California Parents for Public Virtual Education
California Republic Leadership Academy
California Virtual Academies
Camarillo Academy of Progressive Education
Camino Nuevo Charter Academy
Champs Charter High School of the Arts
Charter Schools Development Center
Children’s Community Charter School
Chime Institute
Choices Charter School
Citizens of the World Charter School
Clarksville Charter School
Coastal Grove Charter School
Community Learning Center Schools
Core Butte Charter School
Core Charter School
Core Collaboration
Crossroads Charter Academy
Da Vinci Schools
Delta Managed Solutions
Desert Trails Preparatory Academy
Discovery Charter Schools
Dixon Montessori Charter School
Dr. Lewis Dolphin Stallworth Charter School
Dual Language Immersion North County
Edison Bethune Charter Academy
Ednovate
Ednovate (UNREG)
Education for Change Public Schools
Eel River Charter School
El Sol Science and Arts Academy
Element Education
Elevate School
Environmental Charter Schools
Epic Charter School
Equitas Academy Charter Schools
Excel Academy Charter School
Extera Public Schools
Family Partnership Charter School
Feaster (mae L.) Charter School
Feather River Charter School
Fenton Charter Public Schools
Five Keys
Forest Charter School
Forest Ranch Charter
Freedom Keepers United, CA Freedom Keepers
Fresno Innovative Charter Schools
Gabriella Charter Schools
Gateway College and Career Academy
Gateway Community Charters
Girls Athletic Leadership Schools Los Angeles
Glacier High School Charter
Golden Valley Charter School
Gorman Learning Charter Network
Granada Hills Charter
Great Valley Academy
Green DOT Public Schools
Griffin Technology Academies
Growth Public Schools
Guajome Schools
Hawking Steam Charter School
Heartwood Charter School
High Tech Los Angeles
Hometech Charter School
Howard Gardner Community School
Icef Public Schools
Ilead California Charter Schools
Ingenium Schools
Innovations Academy
Innovative Education Management
Inspire School of Arts and Sciences
Intellectual Virtues Academy of Long Beach
Invictus Leadership Academy
Irvine International Academy
Ivy Academia Entrepreneurial Charter School
Jcs Family of Charter Schools
John Muir Charter Schools
Journey School
Kairos Public Schools
Kavod Charter School
Kepler Neighborhood School
Kid Street Learning Center Charter School
Kidinnu Academy
Kids' Club Spanish School
Kipp Public Schools Northern California
Language Academy of Sacramento
Larchmont Charter School
Lashon Academy
Learn4life
Learning for Life Charter School
Leonardo Da Vinci Health Sciences Charter School
Literacy First Charter Schools
Los Angeles Academy of Arts and Enterprise
Magnolia Public Schools
Maria Montessori Charter Academy
Matrix for Success Academy
Mayacamas Countywide Middle School
Meadows Arts and Technology Elementary School
Method Schools
Montague Charter Academy
Motivated Youth Academy
Mountain Home School Charter
Multicultural Learning Center
Museum School
Natomas Charter School
Natomas Homeschool Alliance
Navigator Schools
New Heights Charter School
New Jerusalem Elementary School District
New West Charter
Nord Country School
Northern United Charter Schools
Northwest Prep Charter School
Nova Academy Early College High School
Ocean Charter School
Ocean Grove Charter School
Odyssey Charter Schools
Olive Grove Charter School
Opportunity Youth Schools Coalition
Orange County Academy of Sciences and Arts
Orange County School of the Arts / California School of the Arts Foundation
Pacific Charter Institute
Pacific View Charter School
Pacoima Charter School
Para Los Ninos
Pasadena Rosebud Academy Charter School
Pathways Academy Charter School
Pazlo Education Foundation
Peabody Charter School
Phoenix Charter Academy College View
Plumas Charter School
Port of Los Angeles High School
Puente Learning Center
Redwood Coast Montessori
Redwood Collegiate Academy
Renaissance Arts Academy
Rex and Margaret Fortune School of Education
River Oaks Academy Charter School
Rocklin Academy Family of Schools
Sage Oak Charter Schools
San Diego Virtual School
San Jose Conservation Corps & Charter School
Santa Rosa French American Charter School Parent Foundation
Scholarship Prep Charter School
Sebastopol Independent Charter
Sequoia Career Academy
Shasta Charter Academy
Sherman Thomas Charter School
Sherwood Montessori
Shields for Families
Sky Mountain Charter School
Soar Charter Academy
South Sutter Charter School
Sparrow Academy
Springs Charter Schools
Stand Up California
Stand Up Sacramento County
Stellar Charter School
Stem Prep Schools
Stride, INC.
Success One! Charter
Summit Public Schools
Suncoast Preparatory Academy
Sycamore Creek Community Charter School
Synergy Academies
Tara Hughes Writing Instructor
Taylion Academy
Teach Public Schools
Tehama Elearning Academy
Temecula Valley Charter School
The Cottonwood School
The Foundation for Hispanic Education
The Grove School
The Learning Choice Academy
The O’farrell Charter Schools
The Preuss School Ucsd
Thrive Academics
Tierra Pacifica Charter
Tree of Life Charter School
Trillium Charter School
Ultra Jiu Jitsu Academy
Union Street Charter
Urban Charter Schools Collective
Valley Charter School
Valley International Preparatory High School
Valley Life Charter Schools
Valley View Charter Prep
Ventura Charter School of Arts and Global Education
Vibrant Minds Charter School
Virtual Learning Academy, Sage Oak Charter Schools
Vista Charter Public Schools
Voices College Bound Language Academies
Vox Collegiate
Westbrook Academy
Western Sierra Charter Schools
Westlake Charter School
Wildflower School
William Finch Charter School
Wushu Central Martial Arts Academy
Ypi Charter Schools
Yuba County Career Preparatory Charter School
Analysis Prepared by: Chelsea Kelley / ED. / (916) 319-2087
Discussed in Hearing
28MIN
Senate Standing Committee on Appropriations
3H
Senate Standing Committee on Education
1H
Assembly Floor
1H
Assembly Standing Committee on Education
Bill Co-Author(s):
