State Budget 2017-18 Update: Governor Addresses Proposition 51 Implementation

The Governor’s Budget proposal contains good news for school facilities, as well as some challenges. With regard to the implementation of Proposition 51, the Governor stated his willingness to work to have Proposition 51 funds flow to school projects. The challenges will be implementing the audit provisions that Governor Brown wants before allowing Proposition 51 funds to flow. Concerning Proposition 39 energy efficiency funding, the Governor proposes $422.9 million for K-12 school districts and charter schools, which is a significant investment.

CASH has always supported accountability for spending taxpayer funds. We have a stated policy that every public funded school project should be audited. If there are changes needed, we look forward to making those changes as soon as possible. We believe the audit guide concern can be addressed immediately without legislation because the guide is developed by the State Controller, Superintendent of Public Instruction and the Director of the Department of Finance. If legislation is needed to have a long-term statutory authority, CASH believes that can be done through a budget trailer bill. We will have more updates in the coming days as more details become available. Below is a summary of the proposed State Budget relating to school facilities.

K-12 School Facilities

“The recently approved Kindergarten through Community College Public Education Facilities Bond Act of 2016 (Proposition 51) authorizes $7 billion in state general obligation bonds for K‑12 schools to be allocated through the current School Facilities Program in place as of January 1, 2015. As the State Allocation Board and the Office of Public School Construction begin to consider allocation of Proposition 51 resources, it is important to address some of the shortcomings within the existing program that were recently documented in the audit findings issued by the Office of State Audits and Evaluations in a 2016 audit of Proposition 1D School Facilities Program expenditures. In that audit, it was determined that 1,533 projects representing over $3 billion in Proposition 1D funds have been completed without ensuring the bond funds were appropriately expended. The audit found instances in which school districts inappropriately used school facilities bond funding to purchase vehicles, tractors, tablets, golf carts, mascot uniforms, and custodial/ cleaning supplies. To ensure appropriate usage of all School Facilities Program bond funds and effective program accountability and oversight, the Administration will work with the State Allocation Board and the Office of Public School Construction to revise policies and regulations to implement front‑end grant agreements that define basic terms, conditions, and accountability measures for participants that request funding through the School Facilities Program.

To complement this front‑end accountability, the Administration will introduce legislation requiring facility bond expenditures to be included in the annual K‑12 Audit Guide. Independent auditors will verify that local educational agencies participating in the School Facilities Program have appropriately expended state resources.

Once these measures are in place to verify that taxpayers’ dollars are appropriately used, the Administration will support the expenditure of Proposition 51 funds.”

~ CASH Staff