School District May Lose $70 Million in State Aid

The Long Beach Unified School District may lose a claim totaling more than $70 million in state funds for the district’s voluntary desegregation programs because state auditors say the school system cannot fully document the claim.

In a preliminary report, auditors concluded that the district is not entitled to the money and may actually owe the state another $9 million because of incomplete financial records, sources close to the audit said. In some cases, auditors asked the district to produce records it was no longer legally required to keep, sources said.

Losing the funds would be a staggering defeat for the Long Beach school system, which waged a costly five-year legal battle to be reimbursed for money it spent to desegregate schools.

Long Beach officials and state auditors said they could not discuss the audit report until it becomes final, probably in late January. Long Beach administrators would only say that they are displeased with the conclusions of the preliminary report and plan to challenge them in court, if necessary.