The California State Legislature passed Assembly Bill 97 in June 2013 and Governor Brown signed it into law on July 1, 2013. The legislation created the Local Control Funding Formula (LCFF) and the Local Control and Accountability Plan (LCAP). The LCFF changed the way that school districts in California receive education funding from the state, shifting from a complex categorical program towards a per-pupil based formula. Furthermore, school districts receive “supplemental” and “concentration” funds based on the number of English learners, low-income students and foster youth in the district. The LCAP is a key component of this new funding system and requires that school districts create an accountability document showing how they intend to allocate funds and how they propose to track student outcomes. The 2014-15 academic year was the first full-year of policy implementation, and this thesis investigates how districts around the state created their LCAP. Drawing from research reports, press coverage, and a case study of Claremont Unified School District, this investigation finds that the LCAP has the potential to make the California public education system more equitable and adequate.

As of June 2013, all California public school districts are required to incorporate stakeholder input into their operational goals and expenditures to increase stakeholder trust. Trust is a belief by one party in a transaction that the other party in the transaction will act in a way that is fair and in the interest of both parties. The problem is that no guidance or direction relative to the methods or extent to which stakeholder input should be gathered and incorporated was provided within the new regulations. Lawmakers and stakeholders had no insight into the effectiveness or level of school district compliance relative to the new regulations. The research questions of this qualitative, holistic explanatory case study examined how financial managers in the California public school system are engaging stakeholders and gathering and integrating stakeholder priorities into financial planning and budgets in light of limited guidance. The conceptual framework for this study was that stakeholder trust is required for operational efficiency and is increased through transparency and stakeholder engagement. In this study, data was triangulated through 17 semistructured interviews and multiple sources of historical documents. Through data coding it was found that all school districts in the study were using similar engagement methods to gather input and all districts were engaging all required stakeholder groups. It was also found that these engagement processes increased transparency with the districts' stakeholders. This study contributes to positive social change by providing additional insight into how California public school districts are complying with law established to increase transparency and trust relative to the use of public funds where limited guidance for implementations is provided.