Copyright© 2006 by School Services of California, Inc.

                                      Volume 19                   For Publication Date: August 18, 2006             No. 18

Ask SSC . . .
 

Will All School Districts Benefit from a Successful Outcome
of the Lawsuit Over the Mandate Claim Audit Process? 

Q.        We understand that a group of school districts led by Clovis Unified School District is suing the State Controller over the mandate audit process. If a successful outcome is achieved, will all school districts in the state benefit or will it benefit only those districts that are a party to the lawsuit? 

A.      There are several answers to this question. First, if the court finds in favor of the petitioners, only the districts that are named parties to the petition will get immediate relief under the court’s ruling. All other districts that have had costs disallowed through a State Controller’s Office (SCO) audit would not be provided direct relief through this action. 

However, for districts that have received an unfavorable SCO audit and have submitted an Incorrect Reduction Claim (IRC) to the Commission on State Mandates for which the issues are the same as those ruled upon by the court, it is likely that the Commission will find in favor of the districts’ appeal, based on the court’s finding in the Clovis case. (We note that the Commission was careful to refer to the court’s ruling in the science graduation requirements case at its July 2006 hearing.) Thus, these districts will likely benefit as a consequence of a favorable court decision. However, it is unclear how or when the Commission would take up the IRC filings that would be affected by the court’s decision; therefore, it could be some time between the court’s final decision and the Commission’s action on the IRCs. School district officials should note that, upon receiving a final audit report from the State Controller, you have three years to file an IRC with the Commission.

Finally, we would expect all districts to benefit from a favorable ruling in this case with respect to future SCO audits of mandate claims. A decision by the court that rejects the SCO’s current demand for “contemporaneous records” to support mandate claims would presumably lead to a more reasonable documentation standard. This clarity would allow districts to provide documentation that satisfies the SCO and the court, and thus withstand an SCO audit.

—Robert Miyashiro