School accountability: Office of the Education Inspector General: school financial and performance audits: charter school authorization, oversight, funding, operations, and networks: flex-based instruction: local educational agency contracting.

Senator Ashby frames this measure as a comprehensive accountability reform, anchored by a newly created Office of the Education Inspector General that would be appointed by the Governor from a slate nominated by the Joint Legislative Audit Committee and serve through 2034. The office would conduct forensic audits and investigations of programs and operations across the Department of Education, local educational agencies, and entities managing charter schools, and would annually report findings to the Legislature’s policy committees. The Inspector General would operate independently of other agencies, with authority to issue subpoenas and coordinate with law enforcement, and would publish an annual accountability report detailing investigations, audit findings, and corrective actions.

Separately, the bill extends robust audit oversight to educational joint powers authorities and charter schools, requiring the state Controller to monitor and report on audits conducted by independent CPAs or public accountants and to enforce conformance with audit standards. It adopts a weighted, risk-based framework to determine which audits receive quality-control reviews, including timing, auditor experience, and previous conformance findings, and it would mandate a public-facing audit guide with enhanced content starting in the 2027–28 fiscal year. The bill also elevates accountability by requiring timely notification of determinations of nonconformance, expanding continuing education requirements for audit engagement partners and staff, and authorizing referrals to the California Board of Accountancy for unprofessional conduct. It extends ineligibility periods for auditors who fail to conform, and it requires charter schools to be informed when auditors are deemed ineligible.

The measure broadens oversight of chartering authorities and contracting practices, adding mandatory reviews of charter school credit and debit card transactions, with feedback to governing boards and, where there is reasonable suspicion of fraud or misappropriation, prompt notification to the Department of Education and county offices. It authorizes prompt investigations by the state board or its designee into false claims or misappropriation by charter schools, subject to probable cause. It also expands governance and transparency requirements for charter schools and their authorizers, including enhanced data sharing on educator assignments, misassignments, and vacancies, and new contracting standards aimed at preventing noncommensurate public spending. The policy would impose state-mandated local program requirements on affected districts, county offices, and chartering authorities.

Interwoven with these changes are substantial shifts in charter school oversight, funding, and network governance. The bill recasts flex-based instruction, requiring funding determinations to be set on a percentage basis and subject to annual reviews by an Advisory Commission on Charter Schools, with networks of flex-based charters identified for state scrutiny and potential consolidated or shared funding analyses. It would create two grant programs—the Charter Authorizer Mentor Grant Program and the Charter School Authorizer Grant Program—to help chartering authorities meet heightened oversight responsibilities, and it would establish a Charter Authorizer Excess Costs Grant Program to address costs that exceed formula funding. The package also accelerates timelines and strengthens reporting around charter petitions, renewals, and performance standards, including pathways for applying new funding determinations to networks and for ensuring that funding aligns with documented program costs and student outcomes.