How did California schools spend billions in COVID aid?

By Robert Lewis and Joe Hong | CalMatters

Picture your manager offering you a look at equal to 4 months salary and telling you to invest it quickly or danger offering it back again. That in essence is what leaders in Sacramento and Washington did for California universities after the COVID-19 pandemic abruptly shutdown school rooms.

The consequence was a sequence of stimulus measures that allotted $33.5 billion in point out and federal funds, a staggering quantity of just one-time funding for the state’s hard cash-strapped educational institutions, equal to a third of all the income they got the 12 months right before the pandemic.

So how did they expend it? Billions have long gone to matters like laptops, air filters and mental health and fitness counselors – cash to assistance young children. But a lot of the funding has arrive with constrained oversight and small transparency, according to an investigation by CalMatters, a nonprofit information group.

Of the $5.9 billion neighborhood training companies have put in so far from the greatest of the stimulus funds, far more than a quarter went to a group for “other” fees, according to the condition.

“I’m just not certain any individual has a excellent deal with on how this income was used,” explained John Affeldt, running legal professional at Community Advocates who will work on educational equity troubles.

CalMatters spent 3 months inspecting school COVID relief expending across the state, reviewing 1000’s of pages of data received through additional than 45 general public records requests.

The documents offer a unique glimpse at how college leaders grappled with the generational obstacle of COVID in pounds and cents. In the East Bay, for illustration, Castro Valley Unified invested most of its stimulus money on payroll. On the Peninsula, Burlingame educational institutions used a lot more than $300,000 on Chromebooks. In Southern California, El Centro Elementary University District used $3.8 million to set up shade buildings for outdoor eating, college assemblies and educating place, and Lengthy Seashore Unified put in approximately $13,000 on audio recorders.

The information also expose the other pandemic winners – organizations that reaped tens of millions as overwhelmed districts, abruptly flush with dollars, started writing checks.

Some are set up companies perfectly-positioned to fill substantial orders for merchandise. Others are new ventures launched by savvy business people to seize some of the windfall, together with a minimal liability organization headquartered out of a UPS fall box that got a $52 million no-bid COVID testing agreement in San Diego.

Just one chain of virtual constitution faculties gave $11 million – practically two-thirds of its stimulus investing last 12 months – to the publicly traded, for-revenue enterprise affiliated with the faculties. And a Southern California general public faculty district invested $440,000 to seek the services of an evangelical group for a plan to aid at-risk youngsters.

Other records reveal obvious issues or misspending. The point out explained to West Contra Costa Unified School District to change virtually $800,000 in unrestricted resources to reimburse its stimulus funds for the reason that the district failed to show certain payroll costs have been tied to the pandemic. Oakland Unified experienced to reimburse approximately $1 million in stimulus funds it evidently misspent on matters like commercial trucks and a conversation method, data present.

Some districts refused to provide CalMatters data displaying the place their dollars is heading. That contains San Francisco Unified, which got a lot more than $186 million in federal stimulus funds.

And nearby academic companies even now have billions of pounds of COVID relief left to devote. If they don’t expend it by different deadlines, they may perhaps have to return it.

In a penned assertion to CalMatters, the condition Section of Instruction claimed it is “encouraged by the affect that stimulus funding is acquiring on the college students and faculties of California,” and that overseeing the cash is a major priority.

“The division has a sturdy monitoring procedure to make certain that (agencies’) expenditures are in accordance with all relevant federal and condition demands,” in accordance to the statement.

Even now, it may well not be adequate. The condition auditor’s office criticized oversight in an Oct report, declaring the condition is not employing the limited facts it receives to recognize abnormal shelling out designs and scrutinize community academic agencies.

“The state Section of Schooling has not taken a incredibly lively part in controlling how the revenue is staying expended,” reported Kris Patel, supervising auditor who led the group driving the Oct report.

Dollars, funds, funds

Eventually, California community educational institutions and charters obtained just about $29 billion in federal stimulus revenue. Billions additional arrived from point out systems lawmakers in Sacramento established.

To get a cross-section of the stimulus paying out, CalMatters requested far more than 30 school districts for their accounting ledgers. These districts provided the 20 major and 10 random agencies across a geographically and demographically various swath of the point out.

Castro Valley Unified put in $263,000 in stimulus cash on Independence Soul Media Education and learning Initiatives, an fairness guide, and $93,000 on restorative justice consultants, data show. Santa Ana Unified gave $393,000 to Angels Baseball LP to rent out the significant league baseball stadium for past year’s significant school graduation festivities.

“There’s a district in the Central Coast space that acquired an ice product truck with their money” to give away ice cream to kids caught at house throughout the early days of the pandemic, mentioned Michael Fantastic, main executive officer of the Fiscal Disaster and Management Aid Team, a condition-developed firm that allows fiscally troubled college districts get their funds in get. “When I was advised that I type of went off.”

A single frequent space of investing was technologies. Some districts used closely on laptops, hot places and other hardware, as very well as laptop programs and aid in get to make the switch to digital education when structures shut down.

Some educators and advocates issue the quantity of higher-tech expending.

“Consulting firms and education and learning assistance providers have been actually aggressive in reaching out to districts to use these money for new applications that they’re now making to provide pupils,” said Amir Whitaker, senior coverage counsel for the American Civil Liberties Union of Southern California.

Pandemic winners

It wasn’t just engineering companies that reaped large paydays from districts flush with stimulus money. Private protecting gear vendors and organizations providing indoor air excellent merchandise obtained plenty of specials. Companies touting COVID tests-related products and services also were in higher desire.

In September 2021, San Diego Unified’s board ratified a no-bid agreement with a business called Responsive Companions LLC – which formed for the duration of the pandemic in April 2020 and lists a UPS fall box in Orange County as its tackle – to run a COVID testing program. The district amended the deal a handful of months later on and the settlement – which operates by way of July 30 – is now value up to $52 million.

The board ratified the initial agreement at a September board assembly with no dialogue, a movie of the meeting reveals. The board approved the amended arrangement in January, all over again, with no general public dialogue.

Faculty officers say the contract was worth it for a district that’s experienced a specially aggressive tests tactic to retain faculties open up – giving much extra tests and tests web pages than many other districts.

Curious paying but minor oversight

The California Digital Academies, a chain of 9 constitution schools across the state, had been in all probability superior positioned than most to climate the pandemic. They didn’t require to stress about social distancing or require to all of a sudden figure out how to teach remotely. Which is mainly because they had been presently teaching pupils completely on line.

So how did the virtual academies use the $18 million in COVID relief cash they used past year? Just about two-thirds of it – $11 million – went to K12 Administration Inc., a subsidiary of the publicly traded company that can help operate the educational facilities, in accordance to data the educational facilities supplied to CalMatters in response to a information ask for. And even though some of that money is shown as going to fork out for computers and peripheral machines for students, $8.6 million went to “student class materials” or “online curriculum” straight from the company, the information display.

The charters and their relationship to the guardian company – Stride Inc., which was previously regarded as K12 Inc. – have been the source of previous authorized challenges. In 2016, following an investigation by the Bay Location Information Group, the state lawyer general’s office introduced a $168.5 million settlement with K12 Inc. over allegations the company and faculties misled dad and mom to increase enrollment and inflated attendance numbers.

CalMatters spoke to various current or previous employees at the virtual academies who labored all through the pandemic. They stated academics and counselors ended up overwhelmed as enrollment grew and questioned why so substantially revenue went to the corporation.

In an e mail, the organization advised CalMatters that the state didn’t supply further funding to address the enhanced enrollment and that the corporation delivers on the internet curriculum, schooling resources, a studying management method and “a prosperity of other items” for college students and instructors.

Most districts and colleges are going through little scrutiny for their pandemic spending selections, outside the house nearby administrative workplaces and boardrooms. Previous fiscal calendar year, the condition Training Office reviewed stimulus paying out at 15 local educational agencies – less than a percent of the approximately 1,700 agencies that bought stimulus money. This calendar year the section is reviewing 50.

These testimonials turned up numerous red flags, ranging from inadequate recordkeeping to outdated conflict-of-curiosity insurance policies to outright misspending.

Hayward Unified, dinged by point out displays above stimulus paying in a overview previous year – has been in a position to solve most of its findings without having dropping dollars. Condition reviewers recognized 6 concerns at the school in fiscal yr 2020-21.

Even now, it’s taken a extended time for the district to verify to the point out it didn’t mishandle cash. Districts are supposed to take care of conclusions in just 45 days. As of this thirty day period, it is been additional than a yr, and one particular getting remains exceptional.

Hayward’s assistant superintendent of Business enterprise Products and services, Allan Garde, wrote in an e-mail to CalMatters that the district has been chaotic hoping to hold schools open up and functioning, and envisioned to take care of the final of the excellent challenges by the close of this month.

The gradual rate of resolution hints at the limits of state authority.