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Allegations of fraud at an LAUSD school: Are you paying for students who aren't there?

Allegations of fraud at an LAUSD school: Are you paying for students who aren't there?
Allegations of fraud at an LAUSD school: Are you paying for students who aren't there? 09:43

If 80% of success is showing up, then the James Madison Bulldogs may need to be more tenacious, and administrators may need to be more truthful, as a teacher there says.

"I suspect this is a $1 million problem, every year, going all the way back," teacher Dan Chang said. 

Chang, a Los Angeles Unified School District teacher, said he only needs to go back to the last day of school — Friday, June 9 — to show that problem at his school. 

"On Friday, I came to school there are no eighth graders on campus," Chang said. 

All of the eighth graders had their "culmination" ceremony just the day before.

"You culminate, and you're done," Chang said. "You don't come back to school."

However, in an email from last year provided by Chang, school principal Cheryl Bloom reminded teachers of the last official day of class that "technically they [the students] are to report on Friday to their classes," requiring teachers to take official attendance and requiring them to certify it officially. 

"I just mark all my eighth graders all absent," Chang said. "They weren't there ... About 10 minutes later, I get a call from the office, and they said, 'Hey, can you mark all your students present?'"

Chang said he was uncomfortable with that and did not change his attendance report. 

"Then, later in the day, everybody showed up as present," Chang said. 

Chang believes someone changed his attendance sheet, but he's unsure who. 

Whether students are present affects how the school gets paid. California uses average daily attendance to calculate funding. Schools get paid student-by-student only when they are present and at a desk. No student means no money.

"Attendance is revenue," Chang said. "It's everything like students in seats. If they're there, you get, essentially, at the middle-school level something like $60 per day, per attendance, per student."

Chang said it rounds out to about $25,000 of taxpayer money. 

Chang said he emailed his principal, "it does not seem right to attest to marking students present when they are not." In an email provided by Chang, Principal Bloom wrote back, "This is how the district deals with the Culmination. Thanks." 

"It just sort of fit what I suspected would happen," he said. 

At Madison Middle, attendance problems were already happening. State records show Bloom was already presiding over a "chronic absenteeism"¹ rate of more than 35% — higher than the District, county, and state. She refused to speak to KCAL News about it. 

LAUSD Superintendent Alberto Carvalho was also keenly aware of District-wide general attendance issues. He's even gone door-to-door to speak to parents about absenteeism in the past. However, he refused to talk to KCAL News about possible attendance fraud.

"The District owes a full public accounting of this," Chang said. 

State Superintendent Tony Thurmond had plenty to say about the system he is ultimately responsible for. 

"If students are absent, they're marked absent," Thurmond said. "That is not something we take lightly, and those actions can come with consequences. And so, we'll be looking into that. I just want to be clear: it is never OK to mark students present when they are absent, even if it means a loss of funding."

His office said the average student funding is higher at $111 per student per day. For the 462 eighth graders that state records show were enrolled at Madison last year, that would be more than Chang's original $25,000 estimate; in fact, it would be $51,282 for one missed day. 

"We shouldn't have gotten that as revenue," Chang said. 

Thurmond said no matter what, falsely marking students as present is never allowed, even if it is the last day of school.

USC Associate Professor Morgan Polikoff knows the value of educational dollars at the Rossier School of Education. 

"These are taxpayer dollars," he said. "They're based on income taxes, and sales taxes, and other kinds of taxes that Californians pay."

KCAL News requested all of LAUSD's eighth-grade attendance records to see how many tax dollars were used District-wide on that day. However, the District has not released them yet. 

Polikoff said that even one day of missed school could cost the school a .5% decrease in funding. 

"It could be a big deal that all your kids are missing on the last day of school," he said. "You're talking about one day out of 180. That's a .5% decrease, approximately. But, .5% times a thousand kids, suddenly you're talking about a lot of money. Absolutely, it could matter."

It mattered enough for Chang to report it to the LAUSD inspector general. In his report, he details this incident and adds that "colleagues" and "several individuals from other schools remarked that this is a widespread practice throughout LAUSD."

He continued by saying he was concerned about "committing some kind of attendance fraud."

Chang said he had not received a response. However, when KCAL News began its investigation the District's Region North superintendent sent out a robocall. 

"LA Unified was recently made aware of violation to district policy," Region North Superintendent David Baca said. "This issue may be highlighted in an upcoming media story."

The District also posted a photo of Senior Reporter Ross Palombo at the school's gate. 

"I can't speak to what they did there," Thurmond said before promising to investigate the allegations again. "I think whenever there's any instance, even the slightest suggestion of wrongdoing, it should be investigated and reviewed and audited because we cannot have that in our system."

Attempting to fix the system is why Chang said he's now running for the school board. Like a bulldog, he's not letting go of a problem that he believes costs far more than money. 

"What really upsets me is that I was asked to lie, to participate in a scheme," he said. "No teacher should have to lie as part of their job. No teacher should have to participate in a scheme like this — that seems, to me, obviously fraudulent."

The system itself may be part of the issue. After looking into this, state regulators said LAUSD's "average daily attendance" is calculated from the beginning of the school year to April. This means that the last day of class in June wouldn't be in that sample and wouldn't, for technical reasons, affect funding. However, regulators added that changing official attendance records is still a serious allegation and could be attendance fraud. They also said this could still affect the school's chronic absenteeism rate and total minutes of instruction.

If it caused the school to fall below the minimum minutes, the District would be subject to serious fines that could be in the millions. 

LAUSD issued a statement shortly before this story first aired. 

Los Angeles Unified has completed its investigation into an isolated practice of 8th grade student attendance reporting at Madison Middle School for a single day in June 2023. The investigation confirmed the reporting did not impact the Average Daily Attendance funding. However, the reporting did affect the lottery funding which is an extremely small portion of the District's budget – dollars that are part of the overall funding distribution as determined at the District level. The total lottery revenue impact in question is slightly above $600. A $600 variance out of a $19B budget singularly tied to one school hardly seems newsworthy. The District has been in contact with the State throughout the investigation, and is in the process of making the necessary corrections and fulfilling any corrective action required by the State. Additionally, the investigation confirmed this was not a widespread practice, it was isolated to Madison Middle School, and administrative action has been initiated with those involved. Los Angeles Unified takes allegations of potential violations to District policy very seriously.

A state auditor said LAUSD has not called for a full audit to ensure the District is accurately taking attendance for taxpayer funding.

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¹Chronic Absenteeism Count: Total count of ALL chronically absent students at the selected entity for the selected population using the available filters. Students are determined to be chronically absent if they were eligible to be considered chronically absent at the selected level during the academic year and they were absent for 10% or more of the days they were expected to attend. Chronic absenteeism is calculated for each student at each reporting level (e.g., school, district, county, and state) based on the expected days of attendance and actual days attended reported by local educational agencies (LEAs) in the California Longitudinal Pupil Achievement Data Systems (CALPADS). Expected attendance days are determined for each student at each reporting level based on the total number of days a student was scheduled to attend. Days attended are determined for each student at each reporting level based on the total number of days the student attended the school. A day attended is defined as any day a student attended for all or part of a school day.

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