The state Department of Education was ordered Wednesday to refund $250,279 in compensatory education funds, which federal auditors concluded were not spent to benefit economically disadvantaged students, a decision which state officials said could affect millions of dollars in additional federal grants.
The U.S. 9th Circuit Court of Appeals upheld a decision by U.S. Education Secretary William J. Bennett challenging money the state spent between 1978 and 1980 for a series of conferences and meetings for teachers of disadvantaged students.
Objective of Program
The funds at issue were among millions of dollars in federal grants California received under the old Title I program, which provided funds for supplemental education programs at schools in low-income neighborhoods.
State officials said that two additional cases relating to disputed Title I expenditures, still pending before the appeals court, could be affected by Wednesday's decision.
"All told, I can't say how much (money) is involved, but it's in the millions," said Joseph R. Symkowick, chief counsel for the state Department of Education.
However, Symkowick said he had not seen the court's decision and could not determine whether it hinged on the same legal dispute.
No Direct Relationship
Federal auditors initially challenged $743,248 in Title I funds spent on a variety of conferences and meetings they said had no direct relationship to compensatory education programs.
Federal officials later narrowed the challenge to expenditures at several state Board of Education meetings and four educational conferences--including conferences on black concerns, school improvement programs and bilingual education.
California challenged the refund order in federal court, arguing that federal officials improperly limited expenditure of Title I funds to conferences whose primary purpose was compensatory education.
Such a limitation, the state argued, failed to recognize that compensatory education teachers and administrators often learned skills of benefit to their students during individual workshops, even though the workshop was held as part of a conference not directly linked to compensatory education.
A three-judge panel of the San Francisco-based appeals court, in an opinion written by Judge Herbert Y. C. Choy, said that while the state's argument is "persuasive," state officials have provided no evidence establishing the portions of expenses directly related to Title I workshops.
Without such evidence, federal education officials are free to determine standards for expenditure of Title I funds, and restrictions narrowly limiting the ways in which the money can be spent appear to conform with Congress' intent in adopting the program, the court said.
The decision, Symkowick said, "has a pretty dramatic impact, because it's almost like saying you can't go to conferences."
Most educational conferences, he said, are arranged around a variety of topics and to limit them to an area as narrow as compensatory would be "impractical."
Symkowick said state officials also challenged the determination because there had been no specific regulation at the time the money was spent limiting it to single-issue conferences.
"Had there been a rule or regulation, we could have followed it," he said. "The broader issue for us is, can you make rules after the fact, through the auditing process?"
Two other pending cases involve expenditures of Title I funds for school field trips and for parent and teacher lodging during Title I conferences.
Federal officials could not be reached for comment Wednesday.