(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 2026–27 fiscal year Guide for Annual Audits of K–12 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 2026–27 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 2020–21 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 district's 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 2026–27 fiscal year to the 2028–29 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 school's 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 school's annual expenditures.
Beginning with the 2027–28 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 ad