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Description: Chapter 892, Statutes of 2001, (SB 740, O’Connell), directed our office to extend our contract with the RAND Corporation to include an assessment of the state’s process for funding nonclassroom-based charter schools. RAND found that the state’s funding determination process had reduced nonclass-room-based charter schools’ possible misuse of funds. The process also resulted in non-classroom-based schools increasing spending on instruction and teacher compensation. It did not, however, result in an increase in students’ exposure to teachers. Compared to the state’s existing “threshold” funding approach, RAND suggests the state use a more holistic funding determination process that still could detect possible financial wrong-doing without triggering automatic funding cuts for schools that might have reasonable justifications for their different expenditure patterns. Report Summary