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Legal Challenges, LCFF and LCAP: 4 Factors to Keep in Mind When Navigating The New Framework

With interest groups scrutinizing school district Local Control Accountability Plans (LCAP) and at least a lawsuit pending against the Los Angeles Unified School District and Los Angeles County Office of Education over LAUSD's LCAP, school board members and school officials are left to wonder if their LCAPs-required under the State's recently enacted apportionment and funding plan known as the Local Control Funding Formula or "LCFF"-leaves them vulnerable to litigation or other challenges.

As school districts seek to confirm whether their LCAPs meet applicable legal standards under the LCFF to best ensure against complaints or litigation challenging them, the following identifies some important factors to keep in mind when navigating the still new LCAP/LCFF framework for supporting local goals, statewide priority areas, and the "unduplicated count" - or high needs - student population. [1]

1. LCFF was intended as a move to "local control" with local stakeholder involvement.

The LCFF replaced the previously existing revenue limit and categorical funding structure it preceded, while maintaining funding for certain categorical programs, including special education. Under LCFF, a school district has broad discretion to expend LCFF base funds, based on its LCAP developed with local stakeholders, with restrictions applying only to supplemental and concentration funds.

The LCFF requires that a school district disclose how the district will spend the funds and its goals for improving student outcomes according to eight State priority areas, including academic achievement, student engagement, parent involvement, and the successful implementation of new academic standards. Districts that fail to meet their goals and improve student outcomes will receive help through a new system of interventions. In developing its LCAP, a school district must present the draft LCAP to the public and parent advisory committees for review and comment and requires the superintendent of the school district to respond in writing to these comments. It also requires review of the schoolsite plans for student achievement to ensure the LCAP is consistent with the schoolsite plans. Finally, the LCAP establishes a public process for the review and adoption of LCAPs and requires a school district and county office of education to establish a parent advisory committee. In this way, the LCAP allows for local, public participation in setting local goals for a diverse and disparate population while requiring that the goals also account for state priorities.

2. MPP is a tool for the school district to help students achieve the goals set by its constituents.

Total LCFF Funding targets under LCFF consist generally of: (a) grade span-specific base grants, with particularized adjustments; (b) supplemental grants equal to 20 percent of the adjusted base grants multiplied by the unduplicated percentage of high need students; and (c) concentration grants equal to 50 percent of the adjusted base grants, multiplied by the percentage of unduplicated pupils above 55 percent. The LCFF doles out supplemental and concentration funds, over and above the base funding, in order to further the Legislature's findings that where high needs students receive additional funding to address their specific needs, the entire school reaps the rewards with improved outcomes.

The first step in setting a baseline for supplemental and concentration grant spending is determining a school district's Minimum Proportionality Percentage, or "MPP," using the following 7-step process (which is set forth in Title 5 of the California Code of Regulations):

  • Step 1. Determine target supplemental and concentration grant funding. This is the estimated amount of total LCFF funding attributable to supplemental and concentration grants at full implementation (i.e., at the targeted 2020-21 fiscal year).

  • Step 2. Determine prior year expenditures to support high need students.

  • Step 3. Calculate the gap between target and prior year expenditures. In other words, subtract Step 2 from Step 1.

  • Step 4. Calculate the increase in estimated supplemental and concentration grant funding in the LCAP year. For this step, the Step 3 gap figure is multiplied by the gap funding rate determined by the State's Department of Finance.

  • Step 5. Calculate the total estimated supplemental and concentration grant funding in the LCAP year. The Step 4 increase is added to the past year's expenditure from Step 2. This results in a total estimated supplemental and concentration grant funding for the LCAP year.

  • Step 6. Calculate the base funding in the LCAP year. Amounts in Step 5 are subtracted from the Total LCFF funding, as generally described above, to arrive at the "base funding" portion for the LCAP year.

  • Step 7. Calculate the MPP. The MPP is the quotient of Step 5 over Step 6.

The MPP is the minimum amount of total LCFF funding (i.e., the supplemental and concentration grant portion) to satisfy the expenditure requirements for high needs students for the LCAP year. Once MPP is determined for the LCAP year, a district's LCAP must describe the services, and demonstrate, qualitatively or quantitatively, how the District's spending of the determined MPP amount provides increased or improved services to high-needs students, as compared to services provided for all students. For districtwide programs, the requirement to show increased or improved services does not mean that MPP amounts spent are directed dollar-for-dollar at high-needs students, but rather that the district is primarily or chiefly directing MPP dollars towards high-needs students, and that such program is effective in meeting the district's goals for its high needs students in the state and local priority areas.

Once MPP is determined for the LCAP year, a district's LCAP must describe the services, and demonstrate, qualitatively or quantitatively, how the district's spending of the determined MPP amount provides increased or improved services to high-needs students, as compared to services provided for all students. For districtwide programs, the LCFF requirement to show increased or improved services is satisfied where the district describes a districtwide program that primarily directs MPP dollars towards high-needs students, and that such program is effective in meeting the district's goals for its high‑needs students in the state and local priority areas.

LCFF does not require a perfect match, or 1:1 correlation, between the supplemental and concentration funds and unduplicated count students. Rather, the LCFF Regulations "require a school district . . . to increase or improve services for unduplicated pupils in proportion to the increase in funds apportioned . . . ." In addition, LCFF permits additional implementation flexibility to this requirement by "authorizing a school district to use funds [so] apportioned . . . for schoolwide purposes, or, for school districts, districtwide purposes . . . in a manner that isno more restrictive than the restriction provided for in Title I of the federal No Child Left Behind Act of 2001." The U.S. Department of Education permits Title I schools with percentages of students from low-income families of at least 40 percent to use Title I funds, along with other federal, state, and local funds, to operate a schoolwide program to upgrade the instructional program for the whole school. Furthering the mandates of the LCFF, LCFF Regulations permit school districts to expend supplemental and concentration moneys on districtwide programs, so long as it clearly identifies in its LCAP those services and describes how such services are "principally directed towards and are effective in meeting the district's goals for its unduplicated pupils."

3. A school district can spend its LCFF supplemental and concentration funds on districtwide programs.

Operation of schoolwide or districtwide programs to achieve a district's goals for all underperforming pupils while also focusing with particularity on high-needs unduplicated count students is both consistent with Title I mandates and the LCFF regulations. As an example, a school district may decide to implement districtwide programs by hiring a team of professionals to work with not only high needs children but also other subgroups of students in a school who are underachieving. The LCFF regulations assume that when high-needs students constitute at least 40 percent of a school's enrollment or 55 percent of a district's students, money can be used for schoolwide or districtwide programs, so long as it's stated clearly how the money will benefit high-needs students.

The requirements for districtwide expenditures are different than would be the case for non-districtwide programs. For a non-districtwide program, the LCFF regulations provide that a school district needs to demonstrate how the supplemental or concentration grant funding is used to "increase or improve services for unduplicated pupils as compared to the services provided to all pupils in proportion to the increase in funds apportioned on the basis of the number and concentration of unduplicated pupils" together with "an explanation of how expenditures of such funding meet the [school district's] goals for its unduplicated pupils in the state priority areas."

Under the LCFF regulations, to "increase services" means to grow the services quantity, whereas to "improve services" means to grow services in quality. So, in response to Question 3.B. on the State-approved LCAP template, relating to use of supplemental and concentration funds, a school district is permitted to describe their programs both quantitatively and qualitatively. The term "qualitative" is used to refer to other qualitative information gathered to evaluate the effectiveness of a school district's goals and actions identified in the LCAP and related to the state's priorities. These may include findings that result from, but are not limited to, school quality reviews.

The LCFF Regulations provides a mechanism under which a school district may satisfy the requirement to increase or improve services for high needs students where it is funding a districtwide program with supplemental or concentration moneys. For programs supporting high needs students on a districtwide basis, the LCFF Regulations require the district to describe how supplemental and concentration grant moneys spent on a districtwide program are principally directed towards students who generate the funding and, if such district has an enrollment of less than 55% high needs students, how such districtwide programs are the most effective way to use the funds (including a basis for such determination).

In order to better understand the requirements, it is necessary to know what permissible services include and what is meant byprincipally directed. Under the LCFF Regulations, a service may include, but is not limited to, services associated with the delivery of instruction, administration, facilities, pupil support services, technology, and other general infrastructure necessary to operate educational instruction and related services.

"Principally directed" is not defined in the LCFF Regulations. It was anticipated by many California school leaders and organizations (including CSBA and ACSA) that the addition of the word "principally" to the final LCAP Regulations (the addition of which was supported by Public Advocates, among other interest groups and organizations) would cause confusion, disagreement as to its meaning, and potential lawsuits. Without clearer direction in the LCFF Regulations themselves, these anticipated concerns have come to fruition, as the terms principally directed have in fact resulted in scrutiny, complaints and criticism of districts' spending of LCFF supplemental and concentration monies, with those raising such concerns arguing that such spending is not principally directed to unduplicated pupils.

This said, there are indications of the meaning of principally directed both in terms of common and legal usage of the word "principally" and stated intent of the drafters of the LCFF Regulations. The common sense interpretation that principally directed means "chiefly or primarily" directed. So, while expenditure of supplemental and concentration moneys on high needs students should be the chief or primary, direction for the funds, the LCFF Regulations do not require a 100% dollar-for-dollar accounting of such funds on those purposes. Such an interpretation would, in fact run counter to not only the allowance for districtwide program allocation and spending and local stakeholder involvement in designing plans that identify unique local issues, but also LCFF's mandate that the limitations on spending be no more restrictive than Title I spending. Not surprisingly, this common sense interpretation of principally directed appears to be consistent with SBE staff view of the LCFF regulations.

4. The County Office of Education is your ally.

County offices of education are empowered with review and oversight of school districts' LCAPs, giving recommendations and technical assistance to bring the LCAP into conformance with State requirements. If a county office of education determines that a district has adhered to the LCAP template approved by State Board of Education, budgeted for the expenditures shown, and met the LCFF expenditure requirements for high-needs students, as described below, it has discharged its oversight duties and will be in a position to approve the LCAP.

County superintendents must approve the LCAP, if he or she makes those determinations.

In other words, so long as the LCAP adheres to the template, a local school district has budgeted for appropriate amounts to implement the LCAP, and the school district has met the expenditure requirements outlined above for its high needs students, the county office of education should make the required determinations to approve the LCAP.


[1] Unduplicated count pupils, per LCFF, are pupils who (1) are English learners, (2) meet income or categorical eligibility requirements for free or reduced-price meals under the National School Lunch Program, or (3) are foster youth. "Unduplicated count" means, simply, that each pupil is counted only once, even though the pupil may meet more than one of these criteria. In this article, we use the phrase unduplicated count and high needs students interchangeably.