$950,000 Loss Called Inevitable for Six Schools


The San Diego Unified School District is helpless to prevent six of its schools from losing a total of $950,000 in federal funds meant for schools with large numbers of low-income students, the board told an audience of about 200 at Tuesday’s meeting.

A federal audit of the distribution of the entitlement program, called Chapter 1, was conducted in February and used San Diego Unified as a representative of all the districts in California. That audit found that the district had used improper criteria to distribute part of the $23 million the district receives under the program, said Supt. Tom Payzant.

In order for the state to continue to receive money under the program, the state must satisfy the federal Department of Education that San Diego is in compliance with the program, Payzant said.

Five elementary schools and a junior high school, all in Paradise Hills, stand to lose the $950,000 beginning with the 1990-91 school year. An appeal of the audit’s findings could freeze all the money the district is entitled to under Chapter 1, according to a staff report.


Traditionally, a school being taken off the Chapter 1 program is given a one-year grace period to prepare itself for the funding cuts. The audit, however, found that the Paradise Hills schools were ineligible for the program this year, and thus have lost their grace period.

“There’s not going to be any grace period, and we don’t have any choice but to comply,” Payzant said. “We are literally talking about putting millions of dollars at stake for all the city schools.”

The federal government requires school districts distribute the funds based on poverty levels, with the schools with the highest poverty levels receiving money, while those that fall below a certain level do not. The San Diego district added an additional criterion based on academic achievement, the only district in the state to do so.

“The district has used that criteria since the mid-1970s, and it was reviewed and approved by the state,” said Noble Shade, director of external funding for the district, who said the federal ruling had not come as a surprise. “I had always felt wary about the district’s criteria.”

Shade said that regulations and interpretations of the law have changed in the last year, bringing the district out of step.

The schools that stand to lose their funding are: Boone, Field, Lee, Paradise Hills and Penn elementary schools and Bell Junior High School.