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Jeffrey D. Allred, Deseret News
Ava Matthews practices with other members of the Brighton High School drill team in Cottonwood Heights on Tuesday, Sept. 18, 2018.

SALT LAKE CITY — The Utah State Board of Education may start withholding education funding from school districts or charter schools that don't comply with state laws and rules on secondary school fees.

That announcement came after the release of a critical new legislative audit that found "widespread violations of state law" by the State School Board and local boards of education, high schools and charter schools in their handling of school fees.

State Deputy Superintendent of Operations Scott Jones, addressing the Utah Legislature's Audit Subcommittee Tuesday, told lawmakers that after a process of training and notification on new fee policies, school districts and charter school boards will now be on notice that if they don't comply with state law, they could be subject to the withholding of state funding.

"It's a serious matter and the staff is serious, and we're under the direction of the State School Board," Jones said.

The Performance Audit of Secondary School Fees listed multiple violations of the law among 27 schools that were analyzed.

"These violations involve transparency issues, inequitable access to school-sponsored activities and events and an absence of control and oversight of fees by both state and local education leaders," the audit states.

It concluded that many schools assess fees on students who qualify for fee waivers — a practice that conflicts with a 1994 state court ruling that said "requiring waiver-eligible students to pay to participate in school-sponsored classes or activities violates the students’ constitutional right to access an open system of public education."

Noting "widespread noncompliance," auditors wrote that "penalties for noncompliance must be a real and active part of the school fees system."

The State School Board has been authorized to withhold fees since 1994 under a permanent injunction issued in the class action lawsuit Doe v. the Utah State Board of Education.

Aaron Thorup, Office of the Legislative Auditor General

Yet the audit notes that the state board has never taken that step.

"We found no evidence (the State School Board) has ever enforced this penalty despite a history of violations. Without such accountability from the state level, local education leaders have had little motivation to understand and comply with the law," the audit states.

Under current law and board rule, schools have until Oct. 31 to submit annual assurance forms that certify in writing that they understand school fee laws and have trained their staff on the laws.

As a "proof of principle," the Office of Utah State Board of Education will notify schools and districts that have not met the Oct. 31 deadline that they are out of compliance, then give them 10 days or so to submit their forms, Jones said.

For those schools and districts that still don't submit the forms, "staff will recommend to the board to withhold your funds until such time you're compliant," Jones said.

In the past, only about 50 percent of districts and charter schools have met this requirement, according to the audit.

Jones said a school fees task force is completing its work and will likely recommend other changes to policy and practice that could include other means to ensure compliance and improve transparency.

House Majority Leader Brad Wilson, R-Kaysville, noted, "I think there's a difference between having that as an alternative that could be imposed if this policy were not followed versus that's a natural consequence of the policy" referring to withholding funds.

The audit includes the entire 1994 permanent injunction issued by then-3rd District Judge John A. Rokich on the 1992 lawsuit challenging school fee practices.

The judge's decision notes many of the same violations of school fee requirements as the new audit: unauthorized fees, denial of due process and refusal to waive fees.

It also notes some of the same concerns that prompted the State School Board to order an internal audit of fees and create a school fees task force, such as reported instances of school personnel failing to maintain confidentiality of students and families who applied for fee waivers or telling other students they were making up the difference in fees of students who were eligible for waivers.

Spenser Heaps, Deseret News
FILE - Garrett Riley does laps on the bleacher stairs as the West High School baseball team works out after school in Salt Lake City on Thursday, April 12, 2018.

Kayleen Whitelock, chairwoman of West Jordan High's school community council and a former member of the Jordan Board of Education, said she had three children in high school at once, which meant school fees times three.

“For a family, that’s tough,” she said.

When parents talk to her about fees, it’s primarily about their cost.

“Their concern is they seem high and in our country, we have a ‘free’ public education. Some of them, they do seem high, and some of them you do wonder what are they're using the money for,” Whitelock said.

She said one of her concerns is that school fees are assessed with little scrutiny.

If an art class has a $15 class fee and there are 30 students in the class, does anyone check to see if it really takes $450 to buy supplies?

Whitelock said school fees are a symptom of Utah's underfunded public school system.

Policymakers face the choice of charging more of all taxpayers or assessing fees, which are akin to a user fee. Still, "they add up," she said.

The legislative audit includes excerpts of documents given to students and parents in team, club and class information settings, which spotlight other problems.

One says fee waivers for cheerleading applied only to a $55 cheer participant fee and $10 for transportation. Otherwise, "out-of-pocket payments to cheer will be made in $231 increments during the months of May-August," the document said.

Another notes a $225 "performance production fee," but it was $150 for students who qualify for reduced price school lunch and $100 for those who meet federal guidelines for free school lunch.

"Documents like these can mislead parents of students who qualify for fee waivers, and fees may go unchallenged because parents do not fully understand the law," the audit says.

The performance production fee "is particularly troubling because that (school) charges a separate, discounted fee for students who qualify for free lunch, one of the qualifying criteria for a fee waiver," according to the audit.

Auditors sampled 20 secondary schools from 13 school districts and seven charter schools.

In eight of those schools, auditors found instances of fees that should have been waived for eligible students that were not.

"The fees that were not waived were typically for school-sponsored extracurricular activities and included some activities for which students received associated class credit," the audit states.

Fee waiver eligibility is based on income. If a household qualifies, fees can be waived for school registration, textbooks, textbook and equipment deposits, school supplies, activity cards, extracurricular activities and school lockers; lab and shop fees; gym and towel fees; costs for uniforms and accessories; field trips and assembly fees; costs for class or team trips; and costs of musical instruments used in school classes or activities, according to the State School Board's website.

Although the audit acknowledges recent steps taken by the State Board of Education to identify and correct problems — including forming a task force and taking steps to modify administrative rule — it took issue with its 2018 internal audit's estimate that $71 million in secondary school fees were collected in 2017.

"Based on their audit findings, (State School Board) auditors questioned whether that amount is materially understated," the legislative audit states.

The audit also raises concerns about school fundraising, which it says is "closely tied to school fees and largely unregulated."

Spenser Heaps, Deseret News
FILE - Micah Pruyn Goldstein does laps on the bleacher stairs as the West High School baseball team works out after school in Salt Lake City on Thursday, April 12, 2018.

It called on the State Board of Education to audit fundraising practices to determine the impact of secondary school fundraisers on students, families and communities, and whether fee and fundraising revenue are properly handled.

"We are concerned with the lack of legal clarity regarding fundraising," the audit says.

When schools plan to cover known program costs with fundraising, it "places pressure on students to generate needed revenue. This is especially concerning considering that … students have likely already paid fees beyond what the local board approved," the audit states.

In one unidentified high school reviewed by auditors, some students in the ballroom dance program paid from $690 to $1,140 in fees then fundraised from $180 to $940 beyond that.

Students on a drill team paid approximately $1,900 in fees and fundraised an average of nearly $700.

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According to documents provided to parents, each player on the boys basketball team was expected to “plan on being responsible for fundraising $1,500 through selling ads."

One school reviewed by auditors allowed a parent booster club to take the lead in procuring travel services to be paid with school fee and fundraiser revenue.

"This resulted in more than $30,000 of school funds being used to settle an overcharge from a travel agent. Should booster clubs and other outside groups be explicitly limited in their ability to make purchasing decisions?" the audit asks.