"State law controls Charter School's mandatory reimbursement obligations to the District for over-allocated Proposition 39 space. Pursuant to Education Code section 47614, subdivision (b)(2), if Charter School generated less in-district classroom average daily attendance ("ADA") than it projected for the Applicable School Year, Charter School 'shall reimburse the district for the over-allocated space at rates to be set by the State Board of Education.'" - LAUSD Charter School DivisionWhen the LAUSD Charter School Division last provided an update on the amount owed by charter schools for over-allocation fees on January 17, 2022, the past-due balance stood at $13,745,310. While these summaries were supposed to be provided "approximately every month," no further updates were provided until a newsummary was released just as the district closed down for Spring Break. This new update shows why Jose Cole-Gutie'rrez has been silent for the past three months.
The one bit of good news in the report is that charter schools paid $665,696 of the money owed to the district's students. Approximately 90% of this will be distributed directly to the schools that were affected by the charter schools taking more space than they were entitled to under PROP-39. While this cannot change the fact that students had their educational experience improperly interrupted, at least the schools can use this money to improve the educational experience for future students.
While this payment should bring the balance due down to $13,079,614, the report shows that the balance owed by charter schools is now only $5,174,029. Comparing the April report to the one released in January shows that $7,678,022 has mysteriously disappeared from the assessed fees. No reason is given for the reduction.
Of the 60 charter schools that have been assessed over-allocation fees since the 2015-16 school year, 37 had their balances reduced, with the reduction averaging 59.91%. New Horizons Charter Academy received the largest giveaway with their $1,344,285 bill reduced 80.53% to $261,785.
There are only two possible reasons for these reductions. The first is that Jose Cole-Gutie'rrez's department was incompetent when they assessed the fees and has been carrying an inflated balance for several years. This would have been aided and abetted by Megan K. Reilly, who was placed in charge of collecting this debt by former Superintendent Austin Beutner. It is hard to believe that the District's former CFO Reilly did not check the accuracy of the numbers as soon as she was assigned the task.
If the original bills were accurate, then the only other explanation is that the charter schools were given a huge present. According to the language on the over-allocation letters, the fees assessed are mandated by the state, so it is unclear what authority the Charter School Division or even the LAUSD board had to reduce these charges.
Twelve of the charter schools that received the reductions have paid the reduced bill in full. Another 20 entered into payment plans with the LAUSD and will pay in multiple installments. The remaining five had their balances reduced but still have not paid or made arrangements to pay. This includes the WISH Academy High School whose parent organization has been promised the full campus that is currently being used by the Orville Wright STEAM Magnet.
The district cannot wait any longer to immediately collect this debt, much of it which is years past due. The report shows that $1,174,592 of the remaining balance is unlikely to be paid as it is owed by charter schools that have been closed. Had the Charter School Division done their job, these schools would have been closed as soon as they went into default. This would have lessened the exposure of the district to their bad debts.
With the students of the LAUSD now being shorted $7,678,022 in what is supposed to be mandatory fees, it is clear that the District cannot be trusted to fulfill its fiduciary duties to the students that attend its schools. It is time for an outside agency to conduct an investigation into this matter and expose any fraud that may have occurred. It is the only way to stop the abuses of the PROP-39 program by the charter schools and their enablers within the district.
Carl Petersen is a parent advocate for students with special education needs and public education. He is an elected member of the Northridge East Neighborhood Council and serves as the Education Chair. As a Green Party candidate in LAUSD's District 2 School Board race, he was endorsed by Network for Public Education (NPE) Action. Dr. Diane Ravitch has called him "a valiant fighter for public schools in Los Angeles." For links to his blogs, please visit www.ChangeTheLAUSD.com. Opinions are his own.
