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Report Number: 2016-129


K-12 High Speed Network
Improved Budgeting, Greater Transparency, and Increased Oversight Are Needed to Ensure That the Network Is Providing Reliable Services at the Lowest Cost to the State


The K–12 High Speed Network (K12HSN) is a state-funded program that was established to enrich pupil educational experiences and improve academic performance by providing high‑speed, high‑capacity Internet connectivity to California’s public school system. Since 2004 the Imperial County Office of Education (ICOE) has had primary responsibility for the design and management of the program. For this audit, we reviewed the ICOE’s processes for managing the network as well as the role of state entities in overseeing the program. This report draws the following conclusions:

Excessive K12HSN operating reserves have recently been reduced, but questions remain about what a prudent reserve should be.

By the end of fiscal year 2014–15, ICOE had accumulated operating reserves for the K12HSN program that totaled nearly $15 million. According to our review, these reserves appear to be a product of inadequate budgeting by ICOE and a lack of oversight at the state level. ICOE has taken some steps to improve its budgeting process, but concerns remain about its accuracy and transparency. ICOE has also spent most of its operating reserve. As a result, to avoid deficits, projected fiscal year 2017–18 expenditures for the K12HSN program will require a higher level of state funding than ICOE has historically received.

ICOE needs to improve its planning processes in order to manage network development at the lowest possible cost to the State.

ICOE lacks a detailed methodology for determining when and by how much it should increase network bandwidth (capacity). Currently, ICOE is pursuing expensive capacity increases to the network’s circuits—the individual connections between network sites or those sites and the rest of the network—even though less expensive options have been available. Our review of those circuits’ usage levels and ICOE’s process for determining necessary levels for circuit capacity increases found that ICOE cannot justify the costs associated with some of these increases.

Measurement of the program’s effectiveness has omitted key information, and oversight has been inconsistent.

State law sets forth specific responsibilities and goals for ICOE in administering the K12HSN program and assigns responsibility for measuring the program’s success to the California Department of Education (Education). However, ICOE has not reported on some key measures associated with the network’s performance, such as its reliability, and Education has not required ICOE to do so. As a result, some aspects of the network’s performance and cost‑effectiveness remain unclear.

In addition, we reviewed ICOE’s contract with the Corporation for Education Network Initiatives in California (CENIC), individual agreements between CENIC and Internet service providers on behalf of K12HSN, and staffing and compensation for the K12HSN program. In some of these areas, we found that ICOE could improve its processes, and we have made recommendations discussed in the Other Areas We Reviewed section of this report.

Summary of Recommendations


To help ensure continuous network operations while preserving state resources, the Legislature should appropriate to the K12HSN program an amount that does not exceed $10.4 million for fiscal year 2017–18. If the Legislature wishes to appropriate a lower amount for the program, it should direct ICOE to modify one or more of the planned network upgrades we highlight in this report, either by delaying the upgrade to a subsequent fiscal year or by pursuing a less expensive option.


To better inform decision makers at the state level about the amount of funding necessary to operate and maintain the network, ICOE should formally amend its annual budget documents by November 2017 to specify multiple potential levels of network expenditures for the coming year, and it should detail the specific network upgrades and project costs included in each scenario.

To better guarantee that network upgrades are necessary and are achieved at the lowest possible cost to the State, ICOE should develop a formal methodology for reviewing circuit capacity needs.


To increase transparency in the K12HSN program and help ensure that the State has sufficient information to measure the program’s effectiveness, Education should direct ICOE to report annually on specific performance measures. These performance measures should include cost, network bandwidth, and the frequency and duration of network outages and interruptions.

Agency Comments

ICOE and Education agreed with our recommendations and have identified actions they are currently taking or plan to take to implement them.

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