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Last Updated: 3/12/2012
Budget Issue: Oversight of centers
Program: American Indian Education Centers
Finding or Recommendation: Recommend the Legislature remove the centers from the categorical flexibility provision enacted in February 2009. Reinstating as a standalone catgorical program would allow for much stronger program accountability.
Further Detail

This analysis discusses oversight issues related to the California American Indian Education Centers. For information related to the Governor's proposed budget reduction to the centers, please see our entry for "various non-Proposition 98 programs."

Background. In 1976, the Legislature created the California American Indian Education Centers. These centers are non-profit, community-based organizations whose purpose is to promote academic and cultural achievement for Native American school children in California. The Governor's 2012-13 budget proposes $3.6 million Proposition 98 General Fund to support the centers. This funding is provided to 27 centers located throughout the state. In addition, some of these centers receive funding from federal and tribal sources.

Program Funding Flexed Since 2008-09. As part of the 2008-09 budget package, the Legislature changed state law to allow local education agencies (LEAs) to use Proposition 98 funds that had previously been restricted for certain categorical purposes for any educational purpose. Included in this change was Proposition 98 funding for the centers. In addition to providing flexibility, the Legislature also removed all reporting and monitoring requirements attached to the funding. These provisions are set to continue through 2014-15.

Flexibility for Centers Raises Concerns. In the case of the centers, "flexing" associated funding raises serious concerns. First, there does not appear to be a compelling case for providing the centers with flexibility. This is because the funding for the centers supports a relatively narrow set of purposes. (In contrast, the flexibility granted to school districts was intended to allow them to redirect funds from lower to higher priorities across their entire education program.) Second, the lack of program monitoring and compliance mechanisms for the centers is troublesome given that they are not public entities. Although the centers may be subject to audits to ensure that funding is spent on educational purposes, the California Department of Education (CDE) informs us that nearly all other program monitoring has been eliminated. In contrast, districts' expenditures of flexed funds still are subject to certain financial reporting requirements .

Effectiveness of Centers Currently Unknown. In order to ascertain whether the centers were achieving their stated goals, the Legislature requested in 2005 that the Bureau of State Audits (BSA) review CDE's administration of the program. The BSA audit found numerous deficiencies and concluded that the department did not know how the program was performing. Partly in response to these audit findings, the Legislature amended state law to modify some of the data reporting requirements of the centers and to require CDE to report on program results again in January 2011. Given that the program had been flexed starting in 2008-09, CDE indicates that it did not perform this report. Thus, the effectiveness of the centers at improving educational and cultural achieveivement for Native American school children is currently unknown.

Flexibility Means Data on Program Results Unlikely Prior to Sunset Date. State law next requires CDE to report on program results for the centers in January 2016. The legislation authorizing the centers is then set to expire in January 2017, absent additional legislative action. Given that the flexibility provisions remain in effect through June 2015, we believe it will be difficult for CDE to issue a full report on the program's effectivness by the following January. This means that the Legislature will lack important information on the program's effectiveness when deciding whether to extend the sunset date.

Recommend Improving Program Accountability by Removing Flexibility. Given the above concerns regarding the appropriateness of flexing funding to non-public entities, as well as the lack of information on the program's effectiveness, we recommend that the Legislature remove the centers from the flexibility provision in state law. This would mean CDE would have at least three years of data to report on the program prior to its sunset date. The department indicates that it could require additional staff resources to resume such program monitoring.