In 2013-14, the state created the Local Control Funding Formula (LCFF) for county offices of education (COEs). With this funding, COEs are required to (1) provide alternative education to certain at-risk students and (2) oversee school districts’ budgets and academic plans. COEs may use any funding available after completing these tasks on optional activities that reflect their own priorities. We have concerns that providing funding directly to COEs for alternative education and optional activities detaches school districts from the decision making process of how to best serve their students. To address these concerns, we recommend the Legislature shift that funding to districts and allow them to contract with COEs (or other providers) for services. Because oversight of school districts’ budgets and academic plans likely is both more effective and efficient when performed at the regional rather than state level, we recommend the Legislature fund COEs directly for these activities. Because our recommendations signify major changes in the way the state funds COEs, we recommend the Legislature phase in the new funding model over several years.

(2/17/17 -- Corrected district services funding for district in county on figure 5.)