(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 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 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) 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 2026–27 fiscal year to the 2028–29 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 Analyst's 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 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 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 pupil's 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.

Statutes affected:
AB 84: 41020 EDC
12/20/24 - Introduced: 41020 EDC
03/19/25 - Amended Assembly: 1240 EDC, 1240 EDC, 14500 EDC, 14500 EDC, 14501 EDC, 14501 EDC, 14503 EDC, 14503 EDC, 14504 EDC, 14504 EDC, 14504.2 EDC, 14504.2 EDC, 14505 EDC, 14505 EDC, 14506 EDC, 1450