View full PDF report
Report Number: 2016-141		Abbreviations
Charter Schools Some School Districts Improperly Authorized and Inadequately Monitored Out-of-District Charter Schools

Introduction

Background

In 1992 the California Legislature enacted the Charter Schools Act of 1992 (Charter Schools Act), which allows teachers, parents, students, and community members to initiate the establishment of charter schools that operate independently of existing school district (district) structures. According to state law, the legislative intent of the Charter Schools Act is for charter schools to improve student learning; to increase learning opportunities for all students, with special emphasis on expanded learning experiences for academically low‑achieving students; to meet measurable student outcomes; to operate under performance‑based accountability systems; and to stimulate continual improvements in all public schools. It also encourages charter schools to develop innovative teaching methods, to create new professional opportunities for teachers, to provide parents and pupils with expanded choices in the types of educational opportunities that are available, and to create vigorous competition in order to improve the State’s public school system. Like districts, charter schools are publicly funded, nondiscriminatory, and tuition‑free.

Charter schools are generally exempt from most laws governing districts, but they are required to comply with select statutes, such as those establishing a minimum age for public school attendance. State law also requires charter schools to meet certain conditions for funding, such as participation in the statewide testing of students. In addition to providing classroom‑based instruction at school sites, charter schools can also open resource centers that must be used exclusively for the educational support of students enrolled in nonclassroom‑based study programs, including independent study, home study, work‑study, and distance and computer‑based education.

Charter School Authorization Process

Charter schools can be authorized by three different types of entities: the governing board of a district, a county board of education, or the State Board of Education (State Education Board). These authorizing entities (authorizers) are responsible for overseeing the charter schools they authorize, as are the charter schools’ own governing boards if nonprofit public‑benefit corporations operate the schools. In fiscal year 2016–17, California had more than 300 charter authorizers and about 1,250 active charter schools that served more than 600,000 students. About 87 percent—or 1,080—of these charter schools obtained their authorizations from districts.

The authorization process begins when a group of parents, teachers, or community members submits a charter petition (petition) to an authorizer for a prospective charter school. State law requires each petition to contain certain components, including either parent or teacher signatures, proposed budgets and financial projections, and a reasonably comprehensive description of required elements, which we list in the text box. In addition, the petition must affirm that the school will not charge tuition and will not discriminate against any student based on ethnicity, national origin, religion, gender, disability, or other protected characteristics.

Upon receiving a petition, an authorizer has 30 days to hold a public hearing on the provisions of the charter, at which time the authorizer must consider the level of support for the petition by members of the community, such as parents and teachers. The authorizer reviews the petition and makes a recommendation to the relevant board (the school district board, the county board, or the State Education Board). Within 60 days of receiving the petition, the relevant board must approve or deny the petition. In the case of a petition submitted directly to the county board of education, these deadlines are extended by 30 days. The relevant board cannot deny a petition unless it makes written factual findings that the petition does one of the following:

• Presents an unsound educational program.


• Indicates that the school is demonstrably unlikely to successfully implement the educational program set forth in the petition.


• Does not contain the required number of signatures—either half the parents of the number of students the school expects to enroll in the first year or half the teachers it expects to employ in the first year.


• Does not contain a declaration that the school will remain nonsectarian, not charge tuition, and not discriminate.


• Does not contain a reasonably comprehensive description of all statutorily required elements.


• Does not contain a declaration of whether the charter school will be the exclusive public school employer of the charter school employees.

Once approved, the petition becomes an agreement—or charter—between the authorizer and the charter school. The authorizer and charter school may also expand upon this agreement by entering memorandums of understanding that further define each party’s legal responsibilities. For example, the authorizer may agree to provide additional services to the charter school for a fee.

State law limits the effective term of a charter school to five years, after which an authorizer may renew the charter. The charter‑renewal process is similar to the initial authorization process, but a charter school seeking a renewal must also satisfy academic performance requirements. State law requires an authorizer to consider increases in academic achievement as the most important factor in determining whether to grant a charter renewal.

Responsibilities of Charter School Authorizers

State law requires that an authorizer perform certain duties, as the text box shows. For example, an authorizer must provide timely notification to the California Department of Education (Education) if it revokes a school’s charter. State law allows an authorizer to take steps to revoke a school’s charter if the authorizer finds that the school has committed a material violation of its charter, failed to achieve or pursue any of its student outcomes, engaged in fiscal mismanagement, or violated any provisions of law. However, as in the charter‑renewal process, state law intends that an authorizer consider increases in student academic achievement for all groups of students as the most important factor in determining whether to revoke a charter.

If an authorizer believes that it has substantial evidence showing sufficient grounds for revoking a charter, it must adhere to the revocation timeline established in state law. Specifically, state law requires the authorizer to first notify the school of its violations and give it a reasonable amount of time to correct each violation unless a violation constitutes a severe and imminent threat to student health and safety. If the school does not take corrective action, the authorizer can then proceed to revoke the charter by providing the school with a written notice of intent to revoke and a notice of facts in support of revocation. Within 30 days of the authorizer’s sending the revocation notice, the authorizer’s board must hold a public hearing to decide whether enough evidence exists to revoke the school’s charter. The board then has another 30 days to issue its decision on charter revocation.

As part of these legal requirements, the Education Code requires an authorizer to fund the cost of performing these duties with supervisorial oversight fees. State law allows an authorizer to charge for the actual costs of supervisorial oversight not to exceed 1 percent of a charter school’s revenue, or 3 percent of its revenue if the authorizer provides substantially rent‑free facilities. Oversight fees are separate from fees associated with any additional services that a charter school may purchase from its authorizer.

Charter School Funding

Like traditional public schools, California charter schools receive funding based on the State’s local funding plan, which generally considers the grade levels a school serves and the average daily attendance of a school’s enrolled students. Under this plan, charter schools receive funding primarily from three sources: state aid, the Education Protection Account, and local revenue. Proposition 30 created the Education Protection Account, which sets aside additional state aid for public schools. Local revenue, on the other hand, refers to the funding that charter schools receive in lieu of property taxes. In the years since the implementation of the local funding plan, state aid has consistently been the biggest source of revenue for charter schools statewide, followed by local revenue and the Education Protection Account. However, the proportions of the funding that charter schools receive from each of these three sources vary.

Charter schools’ organizational structures and degrees of autonomy from their authorizers typically determine how they elect to receive funding. Locally funded charter schools usually have the same governing board as their authorizing districts, and they are highly dependent on those districts for services, such as those for special education and data reporting. These schools typically receive their funding through their authorizers. In contrast, directly funded schools are operated typically by nonprofit public‑benefit corporations. These schools receive their funding from county offices of education, which act as pass‑through agencies for distributing state funding to the charter schools. When nonprofit public‑benefit corporations operate or manage multiple charter schools, the corporations are commonly referred to as charter management organizations (CMOs). CMOs share resources and centralize certain functions among schools—such as hiring, professional development, and advocacy—and they may be involved in submitting petitions for charter schools they propose to operate. In exchange for these services, CMOs typically charge their charter schools management fees or allocate centralized expenses to the schools.

The Charter Schools Named in the Audit Request

In 2002 the Legislature amended state law to provide additional requirements specific to the locations of charter schools, among other things. An analysis by the Senate Committee on Education quoted the bill’s author to state that amendments were needed to address concerns related to a charter school that accumulated a $1.3 million debt in one year. The amount of this debt raised questions about how the school used state and federal funding. For example, the bill analysis stated that one of the school’s sites may have provided sectarian studies and charged tuition, activities that state law prohibits. According to the bill analysis, the district cited the difficulties of keeping track of remote operations as a reason it did not discover the various anomalies sooner. The site in question was located outside its authorizing district’s geographical boundaries and an Assembly Committee on Education hearing for the same bill cited the Legislative Counsel’s conclusion that charter schools do not have authority to establish locations outside the boundaries of their authorizing school districts.

Similarly, the audit request for this report resulted from concerns about management and oversight of out‑of‑district charter schools. Specifically, the request identified as subjects for review Acacia Elementary Charter School (Acacia Elementary), Assurance Learning Academy (Assurance Academy), and Los Angeles County Online High School (LA Online). Each of these three charter schools either operated or currently operates outside its authorizing district’s geographical boundaries. Table 1 provides background information about these out-of-district charter schools.

Table 1
Profiles of the Three Out-of-District Charter Schools Identified in the Audit Request

SCHOOL PROFILE	ACACIA ELEMENTARY	ASSURANCE ACADEMY	LA ONLINE
Authorizing district	New Jerusalem	Acton-Agua Dulce Unified	Antelope Valley Union
District office city	Tracy	Acton	Lancaster
Type of school	Classroom-based	Nonclassroom-based	Nonclassroom-based
Status as virtual or nonvirtual school	Not virtual	Not virtual	Fully virtual
Charter school city	Stockton	Los Angeles	La Crescenta
Charter school county	San Joaquin County	Los Angeles County	Los Angeles County
Annual average daily attendance for fiscal year 2015–16	382	763	255
Grades served	K–5	9–12	9–12
Fiscal years of operation	2013–14 through 2016–17	2012–13 to present	2007–08 through 2016–17
State funding allocation for fiscal year 2015–16	$3.5 million	$8.5 million	$2.4 million

Sources: California State Auditor’s analysis of data from Education and from fiscal year 2015–16 audited financial statements for Assurance Academy and LA Online.

Acacia Elementary was a directly funded charter school authorized by New Jerusalem Elementary School District (New Jerusalem) and managed by Tri‑Valley Learning Corporation (Tri‑Valley). Although New Jerusalem is located in Tracy, Acacia Elementary operated within the boundaries of Stockton Unified School District (Stockton Unified). Tri‑Valley filed for bankruptcy during fiscal year 2016–17, forcing Acacia Elementary to cease operations at the end of fiscal year 2016–17. Chapter 2 discusses the events leading to Acacia Elementary’s closure.

Assurance Academy is a directly funded charter school authorized by Acton‑Agua Dulce Unified School District (Acton‑Agua Dulce Unified) and managed by the Lifelong Learning Administration Corporation. Although Acton‑Agua Dulce Unified is located in Acton, Assurance Academy operates primarily within the boundaries of Los Angeles Unified School District (Los Angeles Unified).

LA Online was a directly funded charter school authorized by Antelope Valley Union High School District (Antelope Valley Union). Portable Practical Educational Preparation, Inc.,‑California (PPEP) operated LA Online through the end of fiscal year 2013–14, at which time PPEP changed its name to Olin Virtual Academy. For the purposes of this report, we refer to both entities collectively as LA Online. LA Online’s board of directors resolved to file for bankruptcy during fiscal year 2015–16, and LA Online ceased operations in February 2017. Although Antelope Valley Union is located in Lancaster, LA Online’s administrative office operated within the boundaries of Glendale Unified School District (Glendale Unified). We discuss the events leading to LA Online’s bankruptcy in Chapter 2.

In addition to reviewing the charter schools and authorizing districts named in the audit request, we also examined the policies and procedures of the districts in which the three charter schools operated (host districts). Table 2 provides background information on the authorizing districts and host districts of the charter schools identified in the audit request.

Table 2
Profiles of the Authorizing School Districts and Host School Districts for the Three Out-of-District Charter Schools That We Reviewed

SCHOOL DISTRICT PROFILE	ACACIA ELEMENTARY			ASSURANCE ACADEMY			LA ONLINE
	AUTHORIZING SCHOOL DISTRICT	HOST SCHOOL DISTRICT		AUTHORIZING SCHOOL DISTRICT	HOST SCHOOL DISTRICT		AUTHORIZING SCHOOL DISTRICT	HOST SCHOOL DISTRICT
	NEW JERUSALEM	STOCKTON UNIFIED		ACTON-AGUA DULCE UNIFIED	LOS ANGELES UNIFIED		ANTELOPE VALLEY UNION	GLENDALE UNIFIED
School district's county	San Joaquin	San Joaquin		Los Angeles	Los Angeles		Los Angeles	Los Angeles
Fiscal Year 2015–16
Number of students enrolled in district	5,015	40,324		7,475	639,337		24,127	26,117
Percentage of socioeconomically disadvantaged students	54%	81%		36%	81%		71%	48%
Number of noncharter schools	1	50		3	732		13	33
Number of charter schools	13	13		14	274		3	0
Number of out-of-district charter schools*	10	0		11	0		2	0

Sources: California State Auditor’s analysis of multiple documents, interviews, and data obtained from Education, and the Accrediting Commission for Schools—Western Association of Schools and Colleges’ directory of schools.
* A single charter school may have a number of different locations. We did not include these locations when calculating the number of out‑of‑district charter schools.

Scope and Methodology

The Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor to determine the adequacy of the financial and academic oversight that authorizing districts provided to three out‑of‑district charter schools: Acacia Elementary, Assurance Academy, and LA Online. We list the objectives that the Audit Committee approved and the methods used to address them in Table 3.

Table 3
Audit Objectives and the Methods Used to Address Them

AUDIT OBJECTIVE		METHOD
1	Review and evaluate the laws, rules, and regulations significant to the audit objectives.	Reviewed relevant laws, rules, regulations, and other background materials.
2	Determine whether the districts that are authorizing multiple charters are adhering to the limitations for authorizing charter schools outside their geographical boundaries.	For Acton-Agua Dulce Unified, Antelope Valley Union, and New Jerusalem, we did the following: Interviewed district staff and obtained the districts’ policies and procedures for authorizing charter schools. Reviewed the districts’ policies and procedures to determine whether they reflect the state law’s limitations for authorizing charter schools that are located outside of an authorizing district’s geographical boundaries. Obtained and reviewed evidence to determine whether Acacia Elementary, Assurance Academy, and LA Online—the three out-of-district charter schools named in Objective 6—attempted to locate facilities within the boundaries of their authorizing districts and whether their authorizing districts attempted to locate sites within their geographic boundaries before authorizing the out-of-district locations. Determined the districts’ total number of out-of-district charter school locations. We also reviewed petitions for Acacia Elementary, Assurance Academy, LA Online and one additional directly funded out-of-district charter school per district to determine whether the petitions complied with state law. Further, we reviewed New Jerusalem’s locally funded out-of-district charter school to determine whether the district followed its authorization process. In addition, we obtained lists of charter school locations from Education and used them to determine the number of out-of-district charter schools statewide. To make the lists more complete, we included addresses from the directory of schools used by the Accrediting Commission for Schools, Western Association of Schools and Colleges.
3	Determine whether the districts’ authorizing processes for charter schools located outside their geographic boundaries meet legal requirements and are rigorous enough to ensure the likely success of the charter schools they authorize. Compare those processes to the authorizing processes of other districts with charter schools located within the district and determine the reasons for any significant differences.	For Acton-Agua Dulce Unified, Antelope Valley Union, Glendale Unified, Los Angeles Unified, New Jerusalem, and Stockton Unified, we did the following: Interviewed district management and staff to identify the process the districts use when authorizing charter schools and to identify any differences in the processes depending on the charter schools’ geographic locations. Obtained and reviewed administrative procedures from each school district related to reviewing petitions and identified gaps that may exist between the districts’ processes and state law. Determined whether the district’s policies for authorizing petitions aligned with the criteria that the State Board of Education uses to evaluate petitions. Compared processes within and among districts. For Acton-Agua Dulce Unified, Antelope Valley Union, and New Jerusalem, we determined whether each district followed its own authorization process for one locally funded in-district charter school, one directly funded in-district charter school, and the out‑of‑district charter school named in Objective 6.
4	Assess the districts’ oversight and monitoring of the financial information for charter schools they authorize that are located outside their respective district’s geographic boundaries and compare those processes to the oversight and monitoring performed by the districts when the charter schools are located within the authorizing district..	For Acton-Agua Dulce Unified, Antelope Valley Union, and New Jerusalem, we did the following: Interviewed district staff and obtained the district’s policies and procedures for performing financial oversight. We determined that the financial oversight policies and procedures the districts provide to charter schools do not differ based on the schools’ geographic locations. Reviewed the districts’ policies and procedures to determine whether they include state law’s requirements for the oversight and monitoring of charter schools. Because state law does not establish a minimum level of oversight that districts must perform, we used best practices from the Fiscal Crisis and Management Assistance Team (FCMAT) and the National Association of Charter School Authorizers to assess the districts’ oversight and monitoring processes. Obtained and reviewed the financial reports for the last three years for Acacia Elementary, Assurance Academy, and LA Online and determined whether the districts followed their monitoring processes for reviewing the schools’ finances. We also compared each district’s monitoring processes to its process for monitoring directly funded in-district charter schools. If a district had revoked one of its charter schools, obtained and reviewed documents that supported the district’s decision and determined whether the conditions justifying the revocation exist in any of the other selected charter schools.
5	Assess the adequacy of the academic oversight performed by the authorizing districts for the charter schools located outside of their geographic boundaries and, to the extent possible, compare the academic oversight performed with that of charter schools operating within the boundaries of the authorizing districts.	For Acton-Agua Dulce Unified, Antelope Valley Union, and New Jerusalem, we did the following: Interviewed district staff and obtained the districts’ policies and procedures for performing academic oversight. We determined that the academic oversight that the districts provide to charter schools does not differ based on schools’ geographic locations. Obtained and reviewed the last three fiscal years’ academic reports that Acacia Elementary, Assurance Academy, LA Online and a directly funded in-district charter school in each district sent to their authorizing districts, as required under their memorandums of understanding with the districts, and determined whether the districts followed their monitoring processes for reviewing the charter schools’ academic performance.
6	For Acacia Elementary, Assurance Academy, and LA Online, perform the following:
	a. Determine whether the selected charter schools are financially stable and are meeting accepted financial norms and state requirements.	Interviewed school staff and obtained policies and procedures about the schools’ accounting and budgeting processes. Determined whether the schools’ financial reporting complied with requirements in state law. Determined whether the schools’ reserves met the minimum levels required by the agreements with their authorizing districts. Reviewed charter schools’ audited financial statements for transactions among charter schools and their related parties during our audit period. We noted that LA Online did not report any related-party transactions, while Assurance’s related-party transactions generally pertained to the shared costs of operating expenses and educational services. We further describe Acacia’s related-party transactions in Chapter 2.
	b. Assess whether the selected charter schools’ three-year financial projections meet the requirements of their respective county offices of education.	We did not find any applicable requirements from the schools’ respective county offices of Education. Nevertheless, we obtained the schools’ financial projections for the last three fiscal years and determined whether the schools’ projections were sufficiently accurate based on whether the variance between each school’s actual revenues and expenses to its projected revenues and expenses exceeded 10 percent. We determined that a variance exceeding 10 percent was not sufficiently accurate. If a projection was not sufficiently accurate, we determined whether the charter school based that projection on reasonable assumptions.
	c. Determine the academic results of the selected charter schools and compare them to county averages and similar noncharter public schools.	Selected similar noncharter public schools for comparison based on school type, grade levels served, number of students, percentage of socioeconomically disadvantaged students, and percentage of English learners. We selected traditional schools in Stockton Unified for comparison to Acacia Elementary, Alternative School Accountability Model schools in Los Angeles Unified for comparison to Assurance Academy, and primarily or exclusively virtual schools statewide for comparison to LA Online because no comparable schools exist in Los Angeles County. Obtained the California Assessment of Student Performance and Progress (CAASPP) results for fiscal years 2014–15 through 2015–16 and compared each charter school’s results to results of the schools we selected for comparison. For fiscal year 2013–14, we obtained the Academic Performance Index because the State did not implement CAASPP until fiscal year 2014–15. Compared the graduation rates and expulsion rates of each charter school and the schools that we selected for comparison. We found that the three charter schools we visited had lower expulsion rates than did similar schools.
7	Determine whether the financial oversight fees of the chartering districts exceed the limits set by state law for charter schools located outside the authorizing districts’ geographic boundaries.	For Acton-Agua Dulce Unified, Antelope Valley Union, and New Jerusalem, we did the following: Obtained the past three years of invoices the districts sent to Acacia Elementary, Assurance Academy, and LA Online, as well as evidence of payment. Determined whether the districts charged the charter schools based on the actual costs of providing oversight and services and whether they charged more than the legal maximum. Identified any additional service fees that the districts imposed and determined whether the charter schools benefited from those services.
8	Review and assess any other issues that are significant to the audit.	We reviewed the FCMAT audit report of Tri-Valley Learning Corporation. In this report, we identified findings related to Acacia Elementary, and we obtained supporting documentation for such findings, when possible.

Sources: California State Auditor’s analysis of Joint Legislative Audit Committee audit request 2016-141 and information obtained from the school districts of Acton-Agua Dulce Unified, Antelope Valley Union, Glendale Unified, Los Angeles Unified, New Jerusalem, and Stockton Unified; Acacia Elementary, Assurance Academy; LA Online, Education; and FCMAT.

Assessment of Data Reliability

In performing this audit, we obtained electronic data files extracted from the data sources listed in Table 4. The U.S. Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of computer‑processed information that we use to support findings, conclusions, or recommendations. Table 4 describes the analyses we conducted using data from these sources, our methods for testing, and the results of our assessments. Although these determinations may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.

Table 4
Methods Used to Assess Data Reliability

DATA SOURCE	PURPOSE	METHOD AND RESULT	CONCLUSION
Education's DataQuest	To determine the enrollment; percentages of English learners and socioeconomically disadvantaged students; school climate; and cohort outcomes for schools and school districts.	We did not perform accuracy and completeness testing on these data because it is a paperless system with any records stored at local educational agencies throughout the state, making testing cost‑prohibitive. Alternatively, we could have reviewed the adequacy of selected system controls that include general and application controls. However, because it was cost‑prohibitive, we did not conduct these reviews.	Undetermined reliability for these audit purposes. Although this determination may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.
Education's Local Control Funding Formula— Funding Snapshot	To determine annual funding summaries for individual school districts and charter schools.	We did not perform accuracy and completeness testing on these data because the system is a paperless system and local educational agencies submit data electronically, making testing cost‑prohibitive. Alternatively, we could have reviewed the adequacy of selected system controls that include general and application controls. However, because it was cost‑prohibitive, we did not conduct these reviews. To gain some assurance of the data’s reliability, we reviewed existing information and found that local educational agencies report data that Education uses to calculate funding exhibits and updates throughout the year. According to Education’s website, county offices of education serve as one mechanism for checking the accuracy of data used in the LCFF Funding Snapshot. Additionally, according to a fiscal consultant with Education, her unit conducts reviews and testing of the data prior to releasing the data on Education’s website.	Undetermined reliability for these audit purposes. Although this determination may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.
Education's California School Directory	To determine all locations of charter schools as of May 2017, to select schools comparable to the charter schools named in the scope and objectives, and to provide background information.	We used this system for a purpose for which it was not originally intended; however, this system was the best source of information for our purpose. We performed data‑set verification procedures and electronic testing of key data elements and did not identify significant issues. We did not perform comprehensive accuracy and completeness testing because the source documents are stored throughout the State, making testing cost prohibitive. To gain some assurance of the data’s reliability, we reviewed existing information and determined that according to Education’s website, local educational agencies are responsible for updating and maintaining information for charter schools and the charter schools’ personnel can review their schools’ data. The school directory data contains only two charter school addresses at most—a street address for the charter school’s main location and a mailing address for the charter school. Since some charter schools have more than two locations, these data are incomplete for the purpose of determining all charter school locations. To improve the completeness of the location data we included addresses from Education’s Charter School Division survey database. We performed data‑set verification procedures and electronic testing of key data elements and did not identify any significant issues. To test the completeness of the data we compared it to the Accrediting Commission for Schools–Western Association of Schools and Colleges’ public directory. We found that 12 of the 29 records we tested were not in the survey data. To further improve the completeness of the data we included addresses for charter schools that have multiple campuses from the Accrediting Commission for Schools—Western Association of Schools and Colleges’ public directory. We did not assess the reliability of these data because not all charter schools have to pursue accreditation through the Accrediting Commission for Schools, Western Association of Schools and Colleges and we only obtained a list of charter schools with multiple campuses which lead to inherent limitations in the completeness of these data for our audit purpose.	Not sufficiently reliable for purposes of determining all locations of charter schools, and undetermined reliability for the other audit purposes. Although this determination may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.
Education's California Assessment of Student Performance and Progress System’s Smarter Balanced Summative Assessments	To determine academic performance of charter schools and comparable entities.	We did not perform accuracy and completeness testing on these data because the system is a primarily paperless system, making testing cost‑prohibitive. Alternatively, we could have reviewed the adequacy of selected system controls that include general and application controls. However, because it was cost‑prohibitive, we did not conduct these reviews.	Undetermined reliability for these audit purposes. Although this determination may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.

Sources: California State Auditor’s analysis of multiple documents, interviews, and data from the entities listed in the Table.

---

Back to top