Isabel Dueñas teaches her transitional kindergarten students how to read at San Miguel Catholic School in the Watts neighborhood of Los Angeles.
Credit: Archdiocese of Los Angeles
Los Angeles Unified has settled a three-year-old lawsuit with the Catholic Archdiocese of Los Angeles over how much federal Title I funding low-income students within the Archdiocese are entitled to receive. The district agreed to pay the $3 million it illegally withheld from Archdiocese schools and to comply with federal regulations requiring transparency and consultation with the Archdiocese it had repeatedly violated.
The agreement covered 2018-19 and 2019-20, when the district first changed the method of determining student eligibility for Title I and cut funding by more than 90%, from $9.5 million for the eligible 13,000 students in the Archdiocese to $757,000.
The LAUSD school trustees signed off on the agreement in a closed session Dec. 11 and did not publicly disclose details after announcing the vote. A district spokesperson declined to comment to EdSource about the decision.
But Paul Escala, Superintendent of the Los Angeles Archdiocese schools, said the agreement sends a clear message. It “ensures that non-public school students who are eligible for these services will get them. While that may seem basic when we’ve operated in an environment where that was not clear and was not being upheld, that is a win for kids,” he said.
“This recognizes that kids who attend Catholic schools in urban Los Angeles not only are they eligible for Title I services but in fact suffer with poverty and needs just like their public school district peers,” he said.
Since its passage in 1968, Congress extended Title I funding to poor students in private schools, including religious schools, to boost their chances for success. However, to avoid directly funding religious schools, Congress decided that districts in which private and religious schools are located should determine student eligibility and consult with the schools on which services, such as counseling, the students should receive.
Districts have a menu of methods for determining Title I eligibility. The simplest and generally most advantageous for private schools is to use Census data to determine the level of poverty in a neighborhood and calculate eligibility as the proportion of low-income students that attend a private school. It’s the method most large urban districts have used, Escala said, including LAUSD and Miami Dade County Public Schools, where Alberto Carvalho was superintendent before becoming LAUSD superintendent in 2022. That approach also meets the spirit of Title I, he said.
An incentive to deny Title I to private school kids
Under incoming Supt. Austin Beutner’s administration, the district changed the eligibility process for 2018-19 without prior notice to require schools to document family incomes through surveys or the number of income-eligible students registered for the federal subsidized meals programs. Along with requiring more time, paperwork, and verification by the schools, the district changed the reporting rules several times in a short period and failed to engage the districts about its decisions meaningfully, the California Department of Education wrote in 2021 in response to a formal complaint by the archdiocese. Along with slashing funding, the district cut the schools served to fewer than two dozen out of 116 schools in the archdiocese. According to the California Department of Education, the district cut its total share allocated to private schools from 2% and 2.6% of $291 million to 0.5%.
Districts have a financial incentive to minimize private schools’ Title I eligibility since the federal government awards Title I funding to districts. After subtracting the amount going to private schools, a district gets to keep unallocated dollars for its own Title I students.
“There’s a moral and ethical question on the table,” Escala said at the time.
In its 58-page report, the California Department called the funding cuts “totally unreasonable.” Its report concluded that the district “engaged in a pattern of arbitrary unilateral decisions,” including giving Archdiocese schools 12 days during a summer break to produce income surveys for families and then removing all of the schools that were unable to meet the deadline. It characterized the district’s approach as a “hide-the-ball approach (that) breached both the spirit and the letter” of the law.
LAUSD appealed the ruling to the U.S. Department of Education, which largely affirmed the California department’s findings in a November 2023 ruling. It gave the district 60 days to consult with the district, as the Title I law required, and fix the inaccurate count of ineligible students. It gave the district 90 days to provide the services that it had denied.
The Archdiocese returned to Los Angeles Superior Court in the spring of 2024 because, Escala said, the district dragged its feet and declined to hand over documents the Archdiocese was entitled to.
The turning point in the case came in on July 16, 2024, when Judge Curtis Kim ordered the district to turn over all relevant documents, emails, and records by Aug. 20 and to pay $82,141 to the diocese in attorneys’ fees.
The documents confirmed what the Archdiocese had assumed, said the Archdiocese’s Chief Academic Officer Robert Tagorda. “For year,s they had insisted that they were following the law. We had suspicions that if you’re cutting us this much, it can’t be lawful. We had the documents to show we had far more low-income students than they had originally counted.”
With revelations of public records, the Archdiocese reached out to LAUSD to resume settlement talks. Within several weeks in November, there was a deal. The terms correspond to what the U.S. Department of Education had recommended, Tagorda said. LAUSD would recalculate how much was owed in 2018-19 and apply the corrections to 2019-20. It would disclose how the Title I obligation was calculated and confer with the Archdiocese on the services to be provided. The Archdiocese also will be able to pool Title I money so that it can direct it to the most intensive-needs schools – a practice that LAUSD had prohibited.
The combined $3 million owed for the two years was far below what had been received the year before the district changed the eligibility method. But staff turnover in the district and the Archdiocese and incomplete records in some schools undermined the claims, Tagorda acknowledged. The eligibility process in years since 2019-20, unaffected by the lawsuit, changed little. In 2023-24, the Archdiocese received $2 million in Title I funding.
Title I rules allow districts to annually change the process of determining eligibility. Escala said the Archdiocese will continue to request that LAUSD return to the proportionality method that produced more funding; LAUSD, by law, must give the rationale each year for denying it.
Escala acknowledged that the Archdiocese could have chosen to litigate the case – and likely won. But the outcome would have potentially taken years and legal expenses that Archdiocese schools don’t have. “We recognized that we could not afford another day, another year, another generation of students not having the ability to fairly access legally entitled services,” he said.
Tagorda said the additional money from the settlement would be used for tutoring, after-school and summer programs, and academic counseling that schools have been requesting.
In an interview with EdSource in March 2022, soon after becoming LAUSD superintendent, Carvalho said he had familiarized himself with the Archdiocese lawsuit. “I’m going to resolve this issue sooner rather than later,” he said. “What I can tell you is that we need more objective, transparent tools by which we assess and fund this guaranteed federal entitlement that’s driven by poverty,” regardless of whether for a public or private school.
It took nearly three years since then, after exhausting appeals and losing one ruling in Superior Court, for the district to resolve the case. Escala said he is optimistic it will be enforced.
“When we came back to the table, it was clear that Carvalho took a personal interest to make sure we have the conditions on his side to get a settlement done. We have seen a change in approach by district staff. He is committed to abide by Title I regulations and consultation that is fair, I take him at this word,” said Escala.
“In the course of these negotiations, trust and faith had to be rebuilt. I think that we’re in a far better place than we were six months ago.”
