In a decision that could restore millions of dollars to Catholic schools, the state of California has ruled that the Los Angeles Unified School District (LAUSD) violated federal law in ways that slashed assistance for academically struggling students in the Archdiocese of Los Angeles (ADLA).

The 58-page “investigation report,” issued June 25 by the California Department of Education gives LAUSD 60 days to establish “timely and meaningful consultation” with the archdiocese and to rectify any errors in calculating student need. It orders LAUSD to “Provide the agreed-upon services to eligible archdiocesan students beginning by the start of the 2021-2022 school year.”

The archdiocese filed a complaint in September 2019, after LAUSD blocked all but 17 of more than 100 previously eligible Catholic schools from receiving federal Title I funds, which assist underperforming students with math, English and counseling. The report called LAUSD’s action “egregious.”

In the three years prior to 2019, LAUSD received an annual average of around $291 million in Title I funds and distributed between 2% and 2.6% among private schools, according to figures in the report. But in 2019, when it cut the Catholic recipients from 102 to 17, the district had received more than $349 million for Title 1 — an increase over earlier years — but distributed less than 0.5% among private schools.

The total amount shared with private schools dropped from roughly $7.5 million to $1.7 million. Catholic schools reported receiving about $190,000 or 11% of the total for private schools. The Department of Catholic Schools is the largest private school system in the LA area.

Archdiocesan officials expressed surprise at the sudden change in LAUSD tactics after decades of what the Church considered to be an effective partnership between private schools and the school district.

Paul Escala, senior director and superintendent of Catholic schools, described it as a “David versus Goliath” victory for Catholic students.

The decision “affirmed and validated what we have known for a very long time — that the most poor and vulnerable students we serve within the area of the Los Angeles Unified School District have been disenfranchised,” Escala told Angelus.

“There has been a very clear and — one can only deduce by the findings — methodical approach to find ways and means of reducing legally entitled resources to our children.”

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Title I mandates assistance to poorly performing students, regardless of whether they attend public, private, or religious schools. Under the program, the public district is responsible for making an “equitable” distribution of funds to private schools, based on “timely and meaningful consultation.”

In 2018 a dispute erupted between LAUSD and the archdiocese over how to calculate which Catholic schools qualify. The ruling upholds the archdiocese’s claim that the school district abruptly changed the process — sometimes multiple times in one year — then excluded every school whose paperwork it deemed inadequate.

“On its face, that was unlawful,” the report said of the LAUSD decision to consider only 24 schools that its auditors had personally reviewed, of which it rejected seven.

“It was also doubly flawed, because LAUSD had refused to consult concerning the review results and provide [the archdiocese] with an opportunity to provide alternative sources of poverty information, locate missing surveys, provide missing grades and/or other addresses, or otherwise to challenge or mitigate the results.”

LAUSD also demanded $800,000 back from the archdiocese. The district alleged that the archdiocese had obtained overpayments by using “dirty data,” and warned it would recover the money “by any available means.”

In a statement provided to Angelus, a LAUSD spokesperson said the school district “strives to comply with all applicable rules and regulations regarding the provision of Title I equitable services. Los Angeles Unified is in the process of reviewing the investigation report.”

Escala believes the archdiocese would win any appeal because the U.S. Department of Education recently issued a similar ruling in a parallel dispute between LAUSD and Jewish schools in Los Angeles.

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The impact on students grew worse in 2020 when school eligibility for federal pandemic assistance was linked to Title I eligibility, said Nancy Portillo, assistant superintendent of Catholic schools. Only the 17 Catholic schools that LAUSD had certified for Title I received federal help to protect staff and students under the Coronavirus Aid, Relief, and Economic Security or CARES Act.

“Our poorest of the poor schools got zero dollars from CARES for the coronavirus,” Portillo said.

When she learned of the favorable ruling, “I cried,” Portillo said. “It’s not even the money. It’s that what they are doing is wrong. It’s wrong.”

The archdiocese cited an email from a district auditor as evidence of a deliberate district agenda to cut funds from Catholic schools. “[T]he Archdiocese of LA receives over 10 million dollars of Title I funds every year,  money that could otherwise be allocated to LAUSD schools,” the auditor stated.

In May 2018, the district had abruptly changed the methods for documenting Title I need, insisting that each school submit paperwork that had long been compiled by the archdiocese. The report describes the district repeatedly changing forms, setting unattainable deadlines, then denying aid if the paperwork was deemed incomplete.

“One spreadsheet alone went from six columns to seven and then to 13 columns, all in the same year,” Portillo said in an interview.

According to the report, in 2019, “LAUSD insisted on a hard deadline of June 26 for [the archdiocese] to produce in 12 days all underlying surveys for 123 schools and over 12,000 funding-eligible students. The district was effectively requesting a full census (equivalent to a 100% review) of all [archdiocesan schools, with 12 calendar days to comply, during a summer break when most schools were closing or closed.”

When the archdiocese was unable to meet the deadline, the report said, the school district removed all but the 17 schools from Title I, based solely on its own review of 24 schools. 

After its review concluded that many students were not low-income, “LAUSD essentially weaponized the review by refusing to allow [the archdiocese] to consult regarding the review findings or to challenge or correct them by, for example, providing missing surveys, supplying missing grades and/or addresses, or providing alternative sources of poverty data,” the investigation report said.

Furthermore, “LAUSD even told the archdiocese that if it wanted copies of the review reports it should file a PRA request[.]” A Public Records Act request is how any Californian can pursue government records.

The report says that “LAUSD had an obligation to give ADLA the requested information. LAUSD’s hide-the-ball approach breached both the spirit and the letter of the duty to consult.”

The loss of Title I funds has hurt students, Escala said. For decades, children from neighborhoods such as Watts and South LA relied on Title I tutors.

In 2018 “our schools received a letter saying that your specialist will no longer be at your school. They will report to collect their personal belongings,” he said.

“It was heartbreaking. We’ve been fighting every day to win back those legally entitled services for the children who went without,” he added.

It is common for public districts to fail to distribute equitable funds to private schools, though it is usually because overworked administrators in small districts simply don’t know the law, said Ron Reynolds, executive director of the California Association of Private School Organizations. He expects this ruling to serve as an abject lesson.

“The LAUSD is the most prominent of all the state school districts. What transpires there between the district and its private schools is certainly going to be noticed throughout the state,” he said.