January 2016

Student Mental
Health Services
Some Students’ Services Were Affected by a
New State Law, and the State Needs to Analyze
Student Outcomes and Track Service Costs
Report 2015-112

COMMITMENT
INTEGRITY

LEADERSHIP

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 Elaine M. Howle State Auditor
Doug Cordiner Chief Deputy

January 19, 2016 

2015-112

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the California State Auditor presents this
audit report concerning special education mental health services provided to students through
individualized education programs (IEPs). Provisions of Assembly Bill 114 (AB 114)—which took
effect in July 2011—transferred the responsibility for providing these services from county mental
health departments to local educational agencies (LEAs).
This report concludes that in some cases LEAs removed mental health services from student
IEPs because of AB 114 and that the California Department of Education (Education) and LEAs
have not analyzed whether the mental health services provided since AB 114 took effect have
benefited students. Education administers the State’s special education program through special
education local plan areas (SELPAs), which are regional entities comprised of one or more LEAs.
We reviewed student records across four SELPAs and found that LEAs removed mental health
services from some students IEPs because of AB 114, and for other students we found that LEAs
could not explain why services were removed from IEPs. Education has not conducted an analysis
of the educational outcomes of the students who receive mental health services to determine
whether the services are assisting students in accessing their education. This type of analysis is
critical to determining whether the closer connection between these services and educational
outcomes that some expected would occur has actually resulted in improved outcomes for
students receiving these mental health services.
Another expectation at the time the Legislature approved AB 114 was that the transfer in
responsibility for mental health services would result in a cost savings for providing those services.
However, Education has not required LEAs to track their costs to provide the mental health
services in student IEPs and, as a result, none of the LEAs we visited could report the total amount
they spent to provide these services. We also found that, if county mental health departments
use LEAs as contracted providers, the LEAs could access additional funding for mental health
services through the California Medical Assistance Program. As a result, we recommend that
the Legislature amend state law to require all county mental health departments to contract with
LEAs in their county so that the State can maximize the funding for LEAs to provide mental
health services.
Respectfully submitted,

ELAINE M. HOWLE, CPA
State Auditor

621 Capitol Mall, Suite 1200

S a c r a m e n t o, C A 9 5 8 1 4

916.445.0255

916.327.0019 fax

w w w. a u d i t o r. c a . g o v

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January 2016

Contents
Summary 1
Introduction 7
Chapter 1
Assembly Bill 114 Affected Mental Health Services for Some
Students, and Local Educational Agencies Should Better
Document Reasons for Changes to Services 

19

Recommendations 41
Chapter 2
The State Can Improve Fiscal Oversight by Tracking the Total
Cost to Provide Mental Health Services to Students 

43

Recommendations 60
Appendix
Information Related to the Number of Students Served
Who Are Emotionally Disturbed and Eligible for the California
Medical Assistance Program 

63

Responses to the Audit
California Department of Education 

65

California State Auditor’s Comments on the Response From
the California Department of Education 

73

Mt. Diablo Unified School District 

77

Long Beach Unified School District 

79

California State Auditor’s Comment on the Response From
Long Beach Unified School District 
Riverside County Special Education Local Plan Area 
California State Auditor’s Comments on the Response From
Riverside County Special Education Local Plan Area 

81
83
85

Murrieta Valley Unified School District 

87

South East Consortium for Special Education  

89

California State Auditor’s Comment on the Response From
South East Consortium for Special Education 
East Side Union High School District 

91
93

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January 2016

Summary
Results in Brief

Audit Highlights . . .

The federal government provides grant funding to states to ensure
that children with disabilities have access to a free and appropriate
public education and has established, through the Individuals
with Disabilities Education Act (IDEA), the requirements
for the state programs that it funds. These programs include
two main components: special education and related services.
Special education is specially designed instruction to meet the
needs of a student with a disability. Related services, including
mental health services, are services that students with disabilities
require to benefit from special education.

Our review of the effect of Assembly
Bill 114 (AB 114), which transferred to
local educational agencies (LEAs) the
responsibility for providing mental health
services to students through individualized
education programs (IEPs), highlighted
the following:

Federal law requires local educational agencies (LEAs), which in
California consist of school districts and some county offices of
education and charter schools, to evaluate children in all
areas of suspected disability to determine their eligibility for
special education and related services and the nature of the
student’s educational needs. For eligible students, LEAs must
develop an individualized education program (IEP). The IEP is a
core element of IDEA and, as such, it is integral to the purpose
of IDEA. It must describe, among other things, the effects of the
student’s disability on educational performance, the educational
goals for the student, and the special education and related services
the student will receive to assist in his or her educational progress.1
As the state’s educational agency, the State Board of Education,
through the California Department of Education (Education),
oversees the special education program and is responsible for
ensuring that LEAs comply with the requirements of IDEA and
for collecting and reporting data to the public about the special
education program. As part of its responsibilities, Education
distributes federal and state funds to special education local plan
areas (SELPAs), which are made up of individual LEAs or consortia
of LEAs and are created by state law to provide special education
and related services.
In June 2011 the governor signed into law Assembly Bill 114 (AB 114),
which transferred the responsibility for providing mental health
services included in student IEPs from county mental health
departments to LEAs. As a result, LEAs are now responsible for
conducting student mental health assessments, recommending the
1 

Throughout this report, we refer to services in a student’s IEP as services that the student
received. Although it is possible that a student did not actually receive services that were in an
IEP (for example, if a student did not attend counseling sessions), federal regulations require LEAs
to ensure that all special education and related services listed in a child’s IEP are provided.

»» Mental health services and the providers
of those services generally did not change
at the four special education local plan
areas we reviewed.
»» In some cases LEAs removed mental
health services from student IEPs because
of AB 114 and for other students, the
LEAs could not explain why services
were removed.
»» The California Department of Education
(Education) has not performed an
analysis of the educational outcomes
such as graduation and dropout rates for
the subset of students who receive mental
health services to determine whether
student outcomes have improved as a
result of AB 114.
»» Education does not require LEAs to track
their total expenditures for mental health
services, and none of the LEAs we visited
had developed its own methodology for
doing so.
»» None of the four LEAs we reviewed could
determine their total costs to provide
mental health services to students.
»» Two of the four LEAs have not spent all
the funding they received to provide
students with mental health services.
»» Only one of the four LEAs has contracted
with its county to access certain funding
for mental health services through the
California Medical Assistance Program.

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mental health services required to help the student benefit from
special education, and providing those services to the student.
At the time he proposed this shift in responsibility, the governor
stated that the change would lead to greater cost containment
and create a stronger connection between services and student
educational outcomes.
To evaluate the effects of the transfer of responsibilities to LEAs
and whether AB 114 has achieved the governor’s expectations, we
reviewed the special education programs at four SELPAs: Mt. Diablo
Unified School District (Mt. Diablo), Long Beach Unified School
District (Long Beach), Riverside County Special Education Local
Plan Area (Riverside), and South East Consortium for Special
Education (South East), located in Santa Clara County.2 Because
Riverside and South East are SELPAs made up of multiple LEAs,
we selected Murrieta Valley Unified School District and East
Side Union High School District as the LEA at each respective
SELPA for further review. For each SELPA, we reviewed aggregate
data, collected both before and after the transfer, for the types of
mental health services provided to students, the providers of those
services, and the total number of students who had mental health
services listed in their IEPs. Although our analysis of the aggregate
data did not identify changes in the types of services, the providers of
those services, or the number of students served after the transfer
of responsibility to LEAs, it also did not enable us to state with
certainty that no students were negatively affected by the transfer.
For a further look at how the transfer may have affected individual
students, we selected 60 students across the four SELPAs and found
that LEAs had removed at least one mental health service from the
IEPs of 44 of those students in the two years following the transfer of
responsibility to LEAs. We determined that six of these students had
a mental health service removed from their IEP because of AB 114.
It was the practice at all four SELPAs we visited that IEP teams
memorialized each student’s IEP on a written form (IEP document)
explaining what services, among other items, each student’s IEP
included. Therefore, we reached our conclusions by reviewing
the students’ IEP documents and, when possible, identifying
documented reasons for the service changes. When reasons were
not documented in a student’s IEP documents, we interviewed staff
at LEAs and corroborated their statements by obtaining additional
documents from the student’s file. For seven of these 44 students,
LEAs could not explain why a mental health service was removed
from the student’s IEP. In these cases, we concluded that it is
possible that the service was removed because of AB 114.
2 

Throughout this report, we refer to the SELPA known as Riverside County Special Education Local
Plan Area as Riverside. However, it is a separate entity from the county of Riverside and also from
the Riverside Unified School District.

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January 2016

Almost all of the 60 students we reviewed experienced some
change to either his or her mental health services or the amount
of time that the student participated in the regular classroom.
IDEA requires LEAs to notify parents in writing about the reasons
for changes to services or educational placement. However, for
22 of the 60 students we reviewed, the student’s IEP document
did not explicitly state why a mental health service or the student’s
placement changed. In these instances we relied on interviews
with special education staff at the LEA where the student attended
school to direct us to portions of the IEP document or other
information from the student’s file that they claimed were the
reasons for changes to the IEP. In all but the seven cases mentioned
in the previous paragraph, the additional details that LEA staff
presented to us represented plausible reasons why there were
changes to services or student placement. Nevertheless, we believe
that it is important for a student’s IEP document to contain the
explicit reasons for changes to the student’s IEP instead of relying
on staff knowledge to connect service reductions to other parts
of the IEP document or the student file. When LEAs do not
clearly document why a service is added to or removed from a
student’s IEP, or why a student’s educational placement is altered,
they could limit a parent’s ability to participate in an informed
manner in decisions related to the student. Additionally, without
clear documentation, other educators who subsequently become
involved in assessing a student’s progress may have difficulty
understanding why a student is or is not receiving services
that were once listed on the IEP document. We saw similar
documentation problems with a separate group of students who
had received residential treatment through their IEPs. Specifically,
we found that, for the students we reviewed, LEAs did not
always clearly document the reasons for placing students into
residential treatment.
LEAs collect and report to Education outcome data for their
students in special education so that Education can comply with
federal reporting requirements. However, neither Education nor the
LEAs we reviewed perform a thorough analysis of the educational
outcomes on key performance indicators—such as graduation and
dropout rates—for the subset of students who receive mental health
services through IEPs. Without such an analysis, LEAs cannot know
whether significant changes to student services, such as changes in
providers, negatively affect their students. Also, unless Education
analyzes outcome data for the students who receive mental health
services relative to key performance indicators, it cannot provide
information to policymakers about whether student outcomes have
improved as a result of AB 114. Given the governor’s statement
that the transition to AB 114 would create a stronger connection
between services and student educational outcomes, we believe

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it is important that Education and LEAs improve their tracking
of outcomes for students who receive mental health services
through IEPs.
The other expected result of the transfer of responsibility for
mental health services to LEAs was that the State would spend less
on providing mental health services to students with IEPs than it
had previously. However, we found that none of the four LEAs we
reviewed could easily determine their total costs to provide mental
health services to these students. Each LEA we reviewed uses
multiple funding sources to pay for the mental health services they
provide to students, including their unrestricted general fund and
general special education funding. Education does not require LEAs
to track their total expenditures for mental health services, and
none of the LEAs we visited had developed its own methodology
for doing so. Unless LEAs are required to track these expenditures,
the State cannot determine the fiscal impact of the transfer of
responsibilities to LEAs or whether it has realized cost savings
since AB 114 became effective.
Another source of funding for the mental health services on some
students’ IEPs is funding from the California Medical Assistance
Program (Medi‑Cal). One of the four LEAs we reviewed,
Mt. Diablo, contracts with the county mental health department
to receive Medi‑Cal funds as a provider of Early and Periodic
Screening, Diagnostic, and Treatment (EPSDT) services to
Medi‑Cal‑eligible students. EPSDT is a program designed to ensure
that children under 21 who are eligible for full‑scope Medi‑Cal
receive early detection and care services, including mental
health services, so that health problems are averted or diagnosed
and treated as early as possible.3 Under state law, counties are
responsible for providing certain mental health services and have
access to federal EPSDT reimbursements by submitting claims
through the California Department of Health Care Services.
The federal government provides reimbursement for half of the
allowable cost of mental health services, and the State is required
to match this amount. Since legislation in 2011 authorized the
realignment of various programs, counties became responsible for
funding the entire state match for EPSDT mental health services
and may use a variety of funding sources to do so. Counties can
choose whether to provide EPSDT services directly or contract with
outside service providers, which could include LEAs.

3 

Individuals who are eligible for full‑scope Medi‑Cal services are eligible for the full range of
Medi‑Cal benefits, allowing for the most comprehensive Medi‑Cal coverage.

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January 2016

Although LEAs cannot access funding for EPSDT services unless
they contract with their respective counties, such collaborations
could financially benefit both counties and LEAs and increase
the provision of services to children. Counties could benefit
if the LEAs contributed a portion of the local match required
for EPSDT reimbursements. In an October 2011 presentation
hosted by Education related to the transition to AB 114, the
director of the Children’s Center at Desert Mountain SELPA
(Desert Mountain) highlighted her SELPA’s collaboration with
San Bernardino County (San Bernardino) as financially beneficial
for both the SELPA and the county. Specifically, the director
stated that the SELPA contributes a portion of San Bernardino’s
match of federal reimbursements, saving the county funds that it
would otherwise have to contribute as the local entity. Under the
terms of its agreement with San Bernardino, Desert Mountain
was able to access approximately $4 million in federal EPSDT
funds to provide mental health services in fiscal year 2014–15. This
arrangement enables Desert Mountain to provide mental health
services to Medi‑Cal‑eligible students with and without IEPs. Such
a relationship between counties and LEAs across the State could
deliver additional federal funding to the State and increase the
number of students to whom LEAs provide needed mental health
services. However, Mt. Diablo was the only LEA we reviewed that
contracted with its county to access these funds.
Recommendations
Legislature
The Legislature should amend state law to require Education to
report annually regarding the outcomes for students receiving
mental health services relative to key performance indicators, such
as graduation and dropout rates.
The Legislature should amend state law to require counties to enter
into agreements with SELPAs to allow SELPAs and their LEAs to
access EPSDT funding through the county mental health programs
by providing EPSDT mental health services.
Entities We Reviewed
Each SELPA we visited should develop a process to ensure that IEP
teams document, in student IEP documents, the reasons for any
changes to services, including changes to mental health services.
Further, Education should require LEAs to include directly on
the IEP document reasons for any changes to student placement
or services.

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Education should require all LEAs to use the IEP document
to communicate the rationale for placing a student in
residential treatment.
The LEAs we reviewed should annually use Education’s performance
indicators to better understand the effectiveness of their mental
health services.
To ensure that the State knows the amount LEAs spend to provide
mental health services for student IEPs, Education should
develop, and require LEAs to follow, an accounting methodology
to track and report expenditures related to special education
mental health services.
Agency Comments
The SELPAs and LEAs we reviewed all indicated that they
would implement the recommendations that we directed
toward them. However, Education agreed with only two of
the recommendations that we directed to it. Education disagreed
with recommendations related to a lack of documentation
in student IEPs, recommendations related to analysis of
statewide data, and a recommendation regarding changes
to its fiscal oversight.

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January 2016

Introduction
Background
The federal government provides grant funding to states to provide
children with disabilities a free and appropriate public education
and has established, through the Individuals with Disabilities
Education Act (IDEA), the requirements for the state programs
that it funds. In accordance with IDEA, these programs include
two main components: special education and related services.
Special education is specially designed instruction, which is
provided at no cost to the parents, to meet the needs of a student
with a disability. Related services include transportation and other
developmental, corrective, and supportive services that are required
to help students with disabilities benefit from special education.
These related services can include mental health services, such
as psychological services and counseling services. This audit is
focused on the mental health services provided to students within
California’s special education program and changes to state law that
affected how these services are provided to students.
Organization of the State’s Special Education Program
The California Department of Education (Education) oversees
and supervises California’s public education system under the
direction of the superintendent of public instruction. The State
Board of Education (Board) is California’s state educational agency
for elementary and secondary education and is responsible for
ensuring that the State meets the requirements that IDEA assigns
to state educational agencies. The Board fulfills this responsibility
through Education. In this role, Education ensures that California’s
special education program meets federal requirements and collects
and reports data to the public about the special education program,
among other responsibilities.
As shown in Figure 1 on the following page, Education investigates
complaints, performs compliance reviews, and distributes federal
and state funds to special education local plan areas (SELPAs).
SELPAs are single school districts, multiple school districts, or
a district joined with the county office of education to provide
special education and related services. Each SELPA comprises
one or more local educational agencies (LEAs), a category in
California consisting of school districts and some county offices
of education and charter schools. LEAs are responsible for
ensuring that students receive their required special education
and related services.

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Figure 1
Organization of Special Education in California

California
Department
of Education

ROLE IN MENTAL HEALTH
SERVICE PROVISION

ROLE IN MENTAL HEALTH
SERVICE FUNDING

• Ensures that state policies and procedures are
consistent with the requirements of the federal
Individuals with Disabilities Education Act (IDEA)

• Distributes state and federal
funding to SELPAs based on
average daily attendance

• Ensures that special education local plan areas
(SELPAs) and local educational agencies (LEAs)
have established and implemented policies,
procedures, and practices required by IDEA
through compliance reviews

• May retain a portion of general
special education funding to
support administrative activities

• Provides guidance to SELPAs regarding
special education program requirements
• Investigates compliance-related
complaints against SELPAs or LEAs

SELPAs

(133 Total in California)*†
• Ensure that LEAs adhere to federal and
state requirements

• Allocate funding to LEAs based
on a locally developed and
approved plan

• Can be involved in local dispute resolution

• May retain a portion of general
special education funding to
support administrative activities

• Some SELPAs provide mental health services
to students eligible for special education

LEAs

(1,436 Total in California)*
• Identify and assess children who may need
special education
• Determine eligibility for special education
• Develop individualized education programs (IEPs)
for eligible students

• Receive federal and state
funding based on allocation
decisions made by the California
Department of Education
(Education) and SELPAs

• Ensure all special education and related services
that students require are provided to them

Sources:  California State Auditor’s analysis of Title 20 United States Code, sections 1411, 1412, 1413, and 1415; Title 34 Code of Federal Regulations,
Section 300.151; California Education Code, sections 56836.01, 56836.02, 56836.07, and 56836.08; Education’s website; interviews with staff
at selected SELPAs.
*  The total number reported is as of October 2015, although this number will vary over time.
†  The number of SELPAs includes state agencies (state‑operated programs) that are identified as SELPAs for administrative purposes.

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January 2016

Federal law requires LEAs to evaluate children in all
Members of an
areas of suspected disability to determine whether
Individualized Education Program Team
they are eligible for special education and related
services, including mental health services, and the
•  The parents or guardians of a child with a disability.
nature of the student’s educational needs. To be
•  At least one of the child’s regular education teachers.
eligible, a student must be found to have a disability
•  At least one of the child’s special education teachers or
and require special education and related services as
special education providers.
a result of that disability. For every student who is
eligible, LEAs are required to develop an
•  A representative of the local educational agency (LEA) who
individualized education program (IEP). The IEP is a
is qualified to provide or supervise special education and
who knows about the resources the LEA has available to
core element of IDEA and, as such, it is integral to the
provide to students.
purpose of IDEA, which is to ensure that a free and
appropriate public education is available to students
•  An individual who can interpret the instructional
with disabilities. The IEP must describe, among other
implications of student evaluations.
things, the effects of the student’s disability on
•  Other individuals who have knowledge or expertise
educational performance, the student’s educational
regarding the child, at the discretion of the parent
goals, and the special education and related services
or agency.
the student will receive to assist in his or her
•  The child, when appropriate.
educational progress. An IEP team develops the IEP
Source:  Title 20 United States Code, Section 1414.
for each student. As shown in the text box, the
IEP team includes the student’s parents or guardians
and teachers, as well as other representatives from
the LEA. According to data maintained by Education, in the 2014–15
school year nearly 14 percent of those students with an IEP received a
mental health service as part of the IEP.
The Passage of Assembly Bill 114
Through June 2011 state law required county mental health
departments to conduct an assessment of the social and emotional
status of a student and recommend the related services required
to help the student.4 After the county representatives presented
their recommended services to the IEP team, the representatives
of the LEA who were a part of the IEP team were required to adopt
the county recommendation as their own after reviewing and
discussing it. The county was also required to provide the mental
health services that were included in a student’s IEP.
In June 2011 the governor signed into law Assembly Bill 114 (AB 114)
(Chapter 43, Statutes of 2011), which changed how mental health
services become part of an IEP and the parties responsible for
providing those services. The governor’s proposal to make LEAs
responsible for providing the mental health services in IEPs stated
4 

The legislation that gave rise to this model of service provision was Assembly Bill 3632 (AB 3632)
(Chapter 1747, Statutes of 1984), which was signed by the governor in September 1984. This
mandate was suspended for fiscal year 2010–11, when the governor used a line‑item veto to
eliminate funding for the AB 3632 mandate.

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that doing so would lead to greater cost containment and create
a stronger connection between services and student educational
outcomes. The portions of AB 114 relevant to special education took
effect in July 2011 and nullified the portions of state law that made
the counties responsible for conducting assessments, recommending
mental health services to be included on a student’s IEP, and
providing those services. This change made LEAs responsible for
conducting student mental health assessments, presenting the
assessments to IEP teams, and providing all services in IEPs. Figure 2
shows the responsibilities that LEAs and county mental health
departments had before and after AB 114 took effect.
Figure 2
Key Responsibilities Under State Special Education Law Before and After Assembly Bill 114 Took Effect
RESPONSIBLE ENTITY
BEFORE ASSEMBLY BILL 114
AFTER AB 114
(AB 114)
TASK
Determine special education eligibility
Refer students for assessments for mental-health services

NA

Perform assessments for mental-health services
Perform assessments for non-mental-health services
Convene the individualized education program (IEP) team
Participate in IEP team meetings
Recommend the mental health services that students receive as
part of their IEPs
Provide the mental health services included on students' IEPs

Represents county mental health department
Represents local educational agency (LEA)
Indicates the entity primarily responsible for ensuring task occurs
NA Task is no longer applicable after AB 114 took effect because LEAs are now responsible for performing mental health assessments.

Sources:  California State Auditor’s analysis of California Education Code sections 56330, 56322, 56340, and 56345; California Government Code
Section 7572; Chapter 43, Statutes of 2011; Title 2 California Code of Regulations Section 60045.

Education has published guidance to assist LEAs in understanding
the options available for mental health services since AB 114
took effect. This guidance states that an LEA can hire mental

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January 2016

health professionals, such as social workers and psychologists, and
provide services through these staff. State regulations establish
minimum qualifications for individuals who provide mental health
services that vary depending on the type of services the individual
provides. An LEA may also contract out some or all of these duties to
a community mental health provider, another qualified professional,
or the county mental health department.
Funding for Special Education and Mental Health Services
In several of the years preceding AB 114, counties received state funds
to provide mental health services to students with IEPs. Under this
model, counties could also submit reimbursement claims to the State
for additional costs, with some limitations, that they incurred related
to providing the mental health services included in a student’s IEP.
In October 2010, through a line‑item veto, the governor struck the
funding appropriated to reimburse counties for providing mental
health services included in IEPs during previous years. When he
vetoed the funding, the governor stated that it was part of his effort
to maintain a prudent General Fund reserve. This action suspended
the state mandate for county mental health departments to provide
mental health services included in IEPs.
After the reimbursement model was suspended, the Legislature
allocated a specific amount of funding to Education to distribute
directly to SELPAs for the provision of mental health services.
Education also reminded LEAs that, due to the suspended mandate,
under federal law they were responsible for providing the mental
health services included in student IEPs. Later in that fiscal year, the
Legislature appropriated additional funding to assist LEAs in providing
these services. This funding was meant to cover the costs that LEAs
incurred for mental health services in fiscal year 2010–11 while the
state mandate to provide mental health services was suspended.
Since AB 114 took effect in July 2011, funds from federal and state
sources have supported the provision of mental health services to
students with IEPs. Education receives these funds and distributes
them to SELPAs mostly based on average daily attendance.5 Therefore,
SELPAs with LEAs that have a higher average daily attendance
receive more funding than those with lower average daily attendance.
Education designates a portion of California’s federal special education
funding specifically for the purpose of providing mental health services
to special education students. In addition, the State has dedicated
part of its own special education funding for the same purpose.
5 

In fiscal years 2011–12 and 2012–13, according to the requirements of the state budget act,
Education distributed some federal funds based on a different formula that incorporated
information from Education’s California Special Education Management Information System.

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Funds from these two funding sources are considered restricted and
can be used only for mental health services called for in students’
IEPs (mental health funding). Education distributes this mental
health funding to SELPAs, which then allocate it to their LEAs. In
addition, Education distributes general special education funding
(special education funding) to SELPAs. This special education
funding is not limited to any one purpose within the special
education program. In other words, SELPAs and LEAs are free to
use this funding to pay for mental health services for students if they
choose, but they may also use it for other purposes related to special
education. Finally, LEAs can also use their unrestricted general
funding to pay for mental health services that special education
students require, or LEAs may use this funding for other activities
beyond their special education program.
In addition to these sources of funding, LEAs have access to another
funding source. For all students who are eligible for the California
Medical Assistance Program (Medi‑Cal), LEAs can avail themselves
of the LEA Medi‑Cal Billing Option program through the California
Department of Health Care Services (Health Care Services). This
program provides federal reimbursements for 50 percent of the
allowable costs of certain direct services to students, including some
mental health services.
Mental Health Services Available Through Another Program
Students may also receive mental health services through the Early
and Periodic Screening, Diagnostic, and Treatment (EPSDT) program.
This program can provide services for children who are eligible for
full‑scope Medi‑Cal benefits.6 According to the Centers for Medicare
and Medicaid Services, EPSDT is designed to ensure that children
receive early detection and care, so that health problems are averted or
diagnosed and treated as early as possible. The federal program requires
that all medically necessary screening and treatment services be
provided to individuals under the age of 21 years. These services include
screening to detect physical and mental health conditions and any
related treatment that would be required to address these conditions.
Students do not need to be eligible for special education to receive
mental health services through the EPSDT program.
Depending on a child’s eligibility for special education and the dedicated
mental health programs that the State and counties offer, more than
one entity may be mandated to provide a child with mental health
services. In contrast to the special education eligibility requirements,

6 

Individuals who are eligible for full‑scope Medi‑Cal services are eligible for the full range of
Medi‑Cal benefits, allowing for the most comprehensive Medi‑Cal coverage.

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eligibility for Medi‑Cal services for low‑income families and individuals
under 21 is based on medical need rather than educational need.
Therefore, children who are eligible for both the special education
program and one or more of California’s mental health programs may
receive mental health services from either their county mental health
department, the LEA at which they attend school, or both.
SELPAs and LEAs Selected for Review on this Audit
Our audit included four SELPAs and LEAs, as well as information
we obtained from county mental health departments where the
SELPAs we reviewed were located. To select the SELPAs we
would review, we considered a variety of information, including
the number of LEAs in the SELPA, the number of compliance
complaints on record at Education for each SELPA, the number
of mental health services offered by the LEAs within each SELPA
over time, information related to the use of mental health funding,
and the geographic location of the SELPA in the State. At each
SELPA with multiple LEAs, we selected the LEA within the SELPA
that provided the greatest total number of mental health services
between 2010 and 2013, as indicated in its reports to Education.
Table 1 shows the SELPAs we selected and their corresponding
LEAs and counties.
Table 1
Special Education Local Plan Areas and Local Educational Agencies Selected
for Review
SPECIAL EDUCATION
LOCAL PLAN AREA (SELPA)

CORRESPONDING
LOCAL EDUCATIONAL AGENCY (LEA)

CORRESPONDING
COUNTY

Mt. Diablo Unified School District

Mt. Diablo is a single LEA SELPA

Contra Costa

South East Consortium for
Special Education

East Side Union High School District

Santa Clara

Riverside County Special Education
Local Plan Area

Murrieta Valley Unified School District

Riverside

Long Beach Unified School District

Long Beach is a single LEA SELPA

Los Angeles

Source:  California State Auditor’s analysis of information from the California Department of
Education website.

Scope and Methodology
The Joint Legislative Audit Committee (audit committee) directed the
California State Auditor to review the State’s use of mental
health funds and provision of mental health services to students.
Specifically, we were directed to review the effects of AB 114. Table 2
on the following page lists the objectives that the audit committee
approved and the methods used to address those objectives.

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Table 2
Audit Objectives and the Methods Used to Address Them
AUDIT OBJECTIVE

1

Review and evaluate the laws, rules, and
regulations significant to the audit objectives.

2

Review and evaluate the California Department
of Education’s (Education) responsibilities with
respect to the oversight and administration
of federal and state special education law as
it relates to mental health issues. Determine
whether the State is complying with relevant
laws, regulations, and policies in monitoring
funding streams and outcomes for students
with mental health issues.

METHOD

Reviewed relevant laws, rules, regulations and other background materials related to the provision of
mental health services both before and after they were affected by Assembly Bill 114 (AB 114).
•  Interviewed staff at Education and reviewed documents to determine what oversight activities
Education performs. Mental health services are one form of related services that must be
provided to students with disabilities when such services are required for the students to benefit
from special education. Federal law does not specify how the State will meet the requirement
to provide mental health services but instead requires states to provide special education and
related services to children with disabilities. Therefore, we reviewed Education’s compliance with
these more general requirements. We determined that the federal government has accepted
Education’s plan for general oversight of the special education program and that Education is
performing the key tasks that it outlines in that plan.
•  For each of the special education local plan areas (SELPAs) visited under objective 4 and each
of the local educational agencies (LEAs) visited under objective 8, reviewed the documentation
that the SELPA or LEA submitted to Education to show that the entity met the federal maintenance
of effort requirements. We determined that Education had ensured the entities we reviewed met
the federal requirement to maintain the same level of funding from one year to the next.
•  Reviewed Education’s activity related to data collection and reporting and compared
it to key federal and state requirements. We determined that Education complies with
these requirements.

3

Review and evaluate the impact on the number
of students with disabilities placed in residential
programs both in‑state and out‑of‑state, before
and after the enactment of AB 114. To the extent
possible, provide information on the reasons
students are placed in these programs, and
determine whether those reasons have changed
over a five‑year period.

•  Analyzed summary data regarding the number of students who received residential treatment
services before and after AB 114 took effect from 2010–11 through 2014–15. Interviewed staff at
Education and the SELPAs and LEAs we reviewed to determine their perspective on the trends in
residential placements over this five‑year period.
•  At each SELPA visited under objective 4, selected students who were in residential treatment
in school year 2010–11 and reviewed subsequent individualized education programs (IEPs) for
each student to determine whether the reasons for placement changed, whether the district
documented the consideration of potential harmful effects of placement, and whether the
district documented a rationale for placing the student into a more restrictive environment. At
three SELPAs, we selected five students apiece for review. At the other SELPA, we selected all of
the students who met our criteria, which resulted in us reviewing three students.
•  Interviewed staff at LEAs to determine reasons for residential placement when those reasons
were not documented in a student’s IEP document.

4

From a selection of at least four SELPAs, review
and assess the complaint process and determine
whether each SELPA’s process is effective,
including whether the SELPA makes parents,
guardians, and students aware of the complaint
process. Further, for a selection of complaints
from each of the SELPAs, determine whether the
process for addressing complaints was followed.

•  As shown in Table 1 on the previous page, selected Mt. Diablo Unified School District (Mt. Diablo),
Long Beach Unified School District (Long Beach), Riverside County Special Education Local Plan
Area (Riverside), and South East Consortium for Special Education (South East).
•  Reviewed federal and state laws and regulations to determine what information should be
provided to parents, guardians, and students regarding complaint processes, and how frequently.
•  Interviewed SELPA staff to determine the entities’ procedures for providing notice of complaint
processes to parents.
•  Evaluated up to three IEP documents apiece for 15 students at each SELPA and determined
whether the IEP documents showed that parents, guardians, or the students were offered the
procedural safeguard notice.
•  Obtained seven complaint records pertaining to each SELPA, and evaluated whether the
appropriate processes were followed.

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15

January 2016

AUDIT OBJECTIVE

5

METHOD

For a five‑year period, using the SELPAs identified
in objective 4, provide the following information,
to the extent possible, disaggregated by
students for whom an IEP identifies as
emotionally disturbed, students whose IEP may
also call for mental health services, and students
receiving mental health services who qualify
or do not qualify for the California Medical
Assistance Program (Medi‑Cal) services:
a.  Compare the number of students each SELPA
served under Assembly Bill 3632 (AB 3632) to
the number served under AB 114.

•  Obtained data from Education and analyzed the number of students with mental health services
in their IEP in years 2010–11 through 2014–15 at the four SELPAs identified under objective 4.
•  Using data from Education and data from the California Department of Health Care Services,
identified the number of students with an IEP that included mental health services, the
number who were eligible for Medi‑Cal, and the number whose IEP identified them as
emotionally disturbed, by year, and the number at each SELPA visited. This information is
presented in the Appendix of this report.
•  Statewide, compared the number of students with mental health services in their IEP to the total
number of students with IEPs.
•  Calculated the rate at which each SELPA continued to provide mental health services to students
from one year to the next before and after AB 114 took effect.

b.  Determine whether the type and frequency
of service, and the providers of services,
changed under the transition from AB 3632
to AB 114.

•  Obtained data from Education and determined the following:
–  How often each SELPA identified under objective 4 provided each mental health service.
Compared the most common services in 2010–11 to the most common services in 2014–15.
–  For mental health services that students received in 2010–11 and 2011–12, whether the
frequency at which the student received the service changed and, if so, whether it was more
or less frequent in 2011–12.
–  The named provider for the mental health services included in student IEPs from 2010–11
through 2014–15. Compared 2010–11 to 2014–15 to determine whether providers for these
services had changed.

6

c.  For a selection of students served under
AB 3632, determine whether their IEPs were
changed as the result of the SELPAs’ transition
to AB 114. To the extent possible, assess
whether the IEP changes were allowable and
the reason was documented.

•  Selected 15 students from each SELPA identified under objective 4 who received at least
one mental health service through their 2010–11 IEP. Reviewed subsequent IEPs for these
students to determine if the mental health service levels changed and whether the reasons for
those changes were recorded in the IEP document.

To the extent possible, determine whether
changes in treatment were made by service
providers as a result of the transition from the
AB 3632 to the AB 114 process.

•  Identified a staff member at each of the LEAs reviewed under objective 8 who provided mental
health services before and after AB 114 became effective.

•  Interviewed staff and reviewed other available information at the LEAs where these students
attended school to determine the reasons for changes to services when those reasons were not
recorded in the students’ IEP documents.

•  Interviewed those staff members to determine the factors that influence treatment decisions and
whether the transition to AB 114 affected mental health treatment.
•  Determined that, according to the staff we interviewed, methods of treatment were not changed
as a result of AB 114.

7

Determine whether the State has a mechanism
in place to evaluate the transition from AB 3632
to AB 114.

•  Interviewed staff at Education to determine whether Education completed an evaluation of the
transition to AB 114 and whether they were aware of any other transition evaluations. According
to Education’s associate director of special education, Education analyzed the status of the
transition to provide policy guidance and support to LEAs though the AB 114 Workgroup and
devoted extra resources to track and analyze data, monitor complaints, develop and vet policy
guidance, and administer funding. We reviewed materials from Education’s website that show
it performed some of these activities. However, we saw no evidence that Education performed
an evaluation to determine whether the transition was effective. The associate director noted
that the 2011 budget bill did not direct Education to perform this type of analysis and that the
Legislature did not provide Education funding for one.
•  Reviewed AB 114 to determine whether it contains a requirement to evaluate the transition in
mental health service provision and determined that it does not.
continued on next page . . .

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AUDIT OBJECTIVE

8

Identify state and federal funding sources
for mental health services for students with
disabilities for the past five fiscal years. Further,
for the SELPAs selected for objective 4 and from
a selection of LEAs, compare their mental health
budgets to their costs. Determine the source
of funds the SELPAs used to pay for any excess
mental health costs.

METHOD

•  Reviewed Education’s summary of funding sources for mental health services and verified
that the information in that summary matched the annual budget act for fiscal years 2010–11
through 2014–15. Identified any additional funding sources through our review of SELPA and LEA
budgets, revenues, and expenditures as described below.
•  Reviewed California State Controller reports regarding the amounts counties claimed in
reimbursements for their fiscal year 2010–11 mental health costs.
•  Obtained financial information from the SELPAs we visited in objective 4 and a selection of
one LEA at each SELPA as shown in Table 1. Because two of the SELPAs we reviewed, Mt. Diablo
and Long Beach, are single‑LEA SELPAs, we reviewed a total of six entities’ fiscal records.
•  Compared the budgeted expenditures, actual revenue, and actual expenditures that each entity
recorded for its restricted mental health funding for fiscal years 2010–11 through 2014–15.
•  Determined that Riverside and South East did not spend more than they received in mental
health funding in the fiscal years we reviewed. Interviewed staff at each LEA to determine how
the LEA covers any excess costs to provide mental health services through an IEP.
•  Interviewed program and financial staff at each LEA and SELPA to determine how each entity
used available Medi‑Cal funding to pay for services.

9

For the selection of LEAs identified in
objective 8, review and assess the following:
a.  Each LEA’s process for hiring mental health
services staff, including how each LEA
ensures the staff are qualified. In addition, for
LEAs that contract for services, determine the
qualifications of the mental health services
providers, identify who the providers are, and
determine who is responsible for contracting
these services. To the extent possible,
compare the qualifications of licensed and
nonlicensed LEA employees and contracted
services providers (that is, nurses, therapists,
psychologists, etc.).

•  Reviewed state regulations to determine what qualifications are required to provide mental
health services to students.

b.  Review and assess each LEA’s process for
identifying students needing a special
education assessment for mental health
services, including the criteria for denying an
assessment for mental health services.

•  Reviewed relevant federal and state laws and regulations related to activities for identifying
students who require assessment, known as child find activities. Also reviewed child find policies
and procedures we identified through other states’ education departments and online research
to identify best practices related to child find. Obtained and reviewed the child find policies
for each SELPA and LEA we reviewed and compared those policies to the relevant laws and
regulations to ensure the policies contained key activities. Also reviewed the policies of each
SELPA and LEA we visited to identify whether they included any best practices that we had found.

•  Interviewed LEA staff to determine LEA procedures for hiring mental health service providers
and for contracting for mental health services, including whether those procedures include
verification that staff and contracted personnel meet the requirements in state regulations for
providing specific mental health services.
•  At each of the four LEAs we reviewed under objective 8, judgmentally selected five staff mental
health providers and five contracted mental health personnel. Interviewed SELPA or LEA staff
to determine what specific mental health services each selected staff or contracted personnel
member provided to students. Determined whether the selected providers met the qualifications
required by state regulations.
•  Compared the qualifications of selected mental health staff to those of contracted mental
health personnel.

•  Interviewed staff at the SELPAs and LEAs we reviewed and obtained documentation of the
activities they perform to demonstrate compliance with their stated policies and procedures.
•  Reviewed federal regulations to determine the requirements for denying special education
assessments, including the required components of notice of a denial of an assessment.
•  Interviewed staff at each LEA to determine whether the LEAs had denied a mental health
assessment in school year 2014–15.
•  Determined that among our four selected LEAs, two LEAs, East Side Union High School District
and Murrieta Valley Unified School District, had not denied any mental health assessments
in 2014–15. We reviewed the reason why Long Beach would deny assessments and found
that reason consistent with federal law. Determined that Mt. Diablo had no specific criteria
for denying assessment requests. Therefore, we reviewed a judgmental selection of five of
Mt. Diablo’s denials from 2014–15 and determined that all of the denials we reviewed complied
with the key components of the federal requirements.
c.  Review and assess how each LEA measures
and tracks the outcomes for students
receiving mental health services.

•  Identified the key outcome indicators in Education’s state performance report that are relevant to
students receiving mental health services.
•  Interviewed staff at each LEA to determine how the LEA tracks the outcomes for those students
against the key performance indicators we identified. Assessed the practices and procedures
for gaps that would cause the LEA to inadequately track the outcomes for these students.
Interviewed staff at Education regarding its tracking of outcomes for students who received a
mental health service through an IEP.

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January 2016

AUDIT OBJECTIVE

10

11

METHOD

To the extent possible, compare the number of
students with diagnosed mental health issues
in California to the number of students actually
receiving services as part of an IEP.

•  Searched for and reviewed available estimates of the number of school aged children in
California with diagnosed mental health issues.

Review and assess any other issues that are
significant to providing mental health services
to students.

•  At the county mental health department that corresponds to the SELPAs selected in objective 4,
we reviewed the available service records for the students that we selected for review under
objective 5(c) for a three‑year period.

•  Using data we obtained from Education, determined the total number of students in California
whose IEP states that they will receive mental health services.

•  Interviewed staff at the county mental health departments to determine how to match county
mental health services with the services listed on student IEP documents.
•  Determined whether county mental health departments provided additional services to each of
the selected students beyond what was included in the students’ IEPs.
Sources:  California State Auditor analysis of Joint Legislative Audit Committee audit request number 2015‑112, and information and documentation
identified in the table column titled Method.

Assessment of Data Reliability
In performing this audit, we obtained electronic data files extracted
from the information systems at Education and Health Care
Services. The U.S. Government Accountability Office, whose
standards we are statutorily required to follow, requires us to assess
the sufficiency and appropriateness of the computer‑processed
information that we use to support our findings, conclusions, and
recommendations. Specifically, we obtained student and service
data from Education’s California Special Education Management
Information System (CASEMIS) for the period from July 1, 2009,
through June 30, 2015. For each school year, we used these data
to identify students with an IEP and, for those students, whether
their IEP included mental health services or residential treatment
services, or indicated an emotional disturbance disability. Further,
we used these data to compare the type, frequency, and providers
of mental health services before and after the implementation of
AB 114. To evaluate these data, we performed data‑set verification
procedures and electronic testing of key data elements and did
not identify any significant issues. However, we did not perform
accuracy and completeness testing of the CASEMIS data because
the source documents required for this testing are stored at
various locations throughout the State, making such testing
cost‑prohibitive. Thus, we determined that Education’s CASEMIS
data were of undetermined reliability for the purposes of this
audit. Although this determination may affect the precision of the
numbers we present, there is sufficient evidence in total to support
our audit findings, conclusions, and recommendations.
Additionally, we obtained Medi‑Cal eligibility data from Health
Care Services’ Fiscal‑Intermediary Access to Medi‑Cal Eligibility
system (beneficiary eligibility system) for the period from
January 1, 2009, through June 30, 2015. We used these data to

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identify Medi‑Cal eligibility for students in the special education
program. To evaluate these data, we performed data‑set verification
procedures and found no errors. We also performed electronic
testing of key data elements and found no issues in the fields
used for this analysis. However, we did not perform accuracy and
completeness testing of the beneficiary eligibility system data
because the source documents required for this testing are stored
at various locations throughout the State, making such testing
cost‑prohibitive. Thus, we determined that Health Care Services’
beneficiary eligibility system data were of undetermined reliability
for the purposes of this audit. Although this determination may
affect the precision of the numbers we present, there is sufficient
evidence in total to support our audit findings, conclusions,
and recommendations.

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January 2016

Chapter 1
ASSEMBLY BILL 114 AFFECTED MENTAL HEALTH
SERVICES FOR SOME STUDENTS, AND LOCAL
EDUCATIONAL AGENCIES SHOULD BETTER DOCUMENT
REASONS FOR CHANGES TO SERVICES
Key Points
»» Aggregate data show that after responsibility for providing
mental health services to students with individualized education
programs (IEPs) was transferred to the local educational agencies
(LEAs) in July 2011 because of Assembly Bill 114 (AB 114),
the most commonly offered types of mental health services
and the providers of those services generally did not change
at the four special education local plan areas (SELPAs) that we
reviewed. The number of students who received these mental
health services remained steady or grew at three of the SELPAs.
»» The 60 student records we reviewed showed that LEAs removed
mental health services from student IEPs in the two years after
AB 114 took effect. However, in many cases LEAs made these
changes based on factors independent of the change to state law,
such as student graduations or students progressing to the point
of no longer needing the mental health service.
»» The LEAs we reviewed and the California Department of
Education (Education) do not know whether student outcomes
have been affected by AB 114 because none of these entities track
aggregate outcomes for all students who receive mental health
services. As a result, the State cannot know whether AB 114 has
resulted in a benefit to students’ educational progress, as some
believed it would at the time it was enacted.
Some Aggregate Data Allow for Limited Conclusions About How
Students Were Affected by AB 114
To assess how the transfer of the responsibility for mental health
services to LEAs has affected students, we attempted to identify
whether students who were offered mental health services
through an IEP before AB 114 took effect subsequently had those
services inappropriately reduced or eliminated. However, to draw
any definitive conclusions, we would need to review IEPs for
students throughout the State who had a mental health service
in their IEP prior to the enactment of AB 114 and follow their
record of subsequent care after the change in law. In lieu of this
cost‑prohibitive approach, we began our analysis by reviewing

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Although we did not see any
indications in the aggregate that
the transfer of responsibility
for the provision of mental health
services to LEAs negatively affected
students, we cannot state with
certainty that some students were
not affected.

aggregate data for four SELPAs for the types of mental health
services provided to students, the providers of those services,
and the total number of students who had mental health services
in their IEPs. Although we did not see any indication from our
aggregate analysis that the transfer of responsibility for the
provision of mental health services to LEAs negatively affected
students, we cannot state with certainty that some students were
not affected.
The four SELPAs we reviewed generally continued to offer
students the same types of mental health services before and after
AB 114 took effect. We identified the three most common types of
mental health services in student IEPs during the 2010­–11 school
year—the year before AB 114 took effect—and compared those
services with the most common service types during the 2014–15
school year for each SELPA we reviewed. Although the rankings
changed, Table 3 shows that each SELPA we reviewed continued
to provide the most common mental health services before and
after the transition in responsibility. For example, at Riverside
County Special Education Local Plan Area (Riverside), behavior
intervention services dropped from the second to the fourth
most common mental health service type in the 2014–15 school
year, but Riverside offered that service to more students than it
did before AB 114 took effect. The table also notes a decline in
residential treatment services at Long Beach Unified School District
(Long Beach). We discuss this decline, and Long Beach’s perspective
that the decline represents a positive change because it is serving
students in a less restrictive environment, later in this chapter.
Additionally, although AB 114 transferred responsibility for the
provision of mental health services from county mental health
departments to LEAs, the provider of the most common mental
health services generally had already been the LEA where the
student attended school. We expected that prior to AB 114 taking
effect, the county mental health department would be the provider
of these services in most instances. However, in the year before
the transfer of responsibility to the LEAs, the named provider in
student IEPs for the most common mental health services at the
four SELPAs generally was the LEA, rather than the county. In
contrast, counties and LEAs both appeared as the named provider
for less common mental health services in the year before AB 114
took effect. The only exception was Long Beach, where these
less common mental health services were provided by the LEA.
However, by school year 2014–15, the county was generally not
the provider for IEP mental health services at the four SELPAs,
regardless of how commonly the service was provided. The
predominant provider for services was the LEA or an agency with
which the LEA contracted for service provision.

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January 2016

Table 3
Most Common Mental Health Services Offered in School Year 2010–11 and 2014–15
SPECIAL EDUCATION LOCAL PLAN AREA

Mt. Diablo Unified School District

MENTAL HEALTH SERVICE

RANKING IN THE 2010–11 SCHOOL YEAR
(NUMBER OF TIMES OFFERED IN IEPs)*

RANKING IN THE 2014–15 SCHOOL YEAR
(NUMBER OF TIMES OFFERED IN IEPs)

Individual Counseling

1 (462)

2 (239)

Counseling and Guidance

2 (275)

1 (445)

Psychological Services

3 (135)

4 (46)

Comment: Behavior intervention services became the third most common service in the 2014–15 school year.
Long Beach Unified School District

Individual Counseling

1 (442)

2 (218)

Behavior Intervention Services

2 (321)

1 (481)

Residential Treatment Services

3 (166)

5 (32)

Comment: Psychological services replaced residential treatment services as the third most common service in the 2014–15 school year.
Riverside County Special Education
Local Plan Area

Individual Counseling

1 (432)

– 1 (1,549)

Behavior Intervention Services

2 (385)

4 (672)

Counseling and Guidance

3 (368)

2 (1,124)

Comment: Social work services became the third most common service in the 2014–15 school year.
South East Consortium for
Special Education

Behavior Intervention Services

1 (613)

2 (505)

Counseling and Guidance

2 (376)

1 (755)

Individual Counseling

3 (303)

– 3 (462)

Source:  California State Auditor’s analysis of data obtained from the California Department of Education’s California Special Education Management
Information System.
*  Individualized Education Program.
Higher ranking
Lower ranking
– No change

We also reviewed the number of students with at least one mental
health service in an IEP at the four SELPAs. The number of
students who require a mental health service to access their free
and appropriate public education may fluctuate from year to year
depending on student population and the needs of those students
in any given year. Therefore, we focused our efforts on whether the
data showed a decline in the number of students served since this
transfer. As shown in Figure 3 on the following page, at Mt. Diablo
Unified School District (Mt. Diablo), South East Consortium for
Special Education (South East), and Riverside, the total number of
students who received a mental health service through an IEP did
not decline, but rather increased or remained generally consistent
after AB 114 took effect in July 2011. In contrast, the number of
students at Long Beach whose IEP included a mental health service
grew in the 2011–12 school year, the first school year after AB 114
took effect, but dropped in subsequent school years. The district
attributes this drop in the number of students receiving mental

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health services at Long Beach to pre‑AB 114 levels in part to an
early intervention program it implemented to treat students before
their mental health affects their education. However, it did not
provide us with an analysis or other documentation that supports
its claim that the early intervention program it implemented is the
cause for the decline in the number of students to whom it provides
mental health services through an IEP.
Figure 3
Total Number of Students with a Mental Health Service in an Individualized Education Program at Four Special
Education Local Plan Areas for School Years 2010–11 Through 2014–15
School Year

748

2010–11

Mt. Diablo Unified
School District

716

2012–13
Total special education local
plan area (SELPA) enrollment 2013–14
in 2014–15: 31,923
2014–15

732
745

0
2010–11

Long Beach Unified
School District
Total SELPA enrollment
in 2014–15: 79,709

Pre-Assembly Bill 114 (AB 114)
AB 114 in effect

776

2011–12

800

400

1,200

853

2012–13

1,018

2013–14

996
0

400 855 800

1200

2,800

3,200

1600

2000

2400

2800
3200

1,381

2011–12

2,178

2012–13

2,637

2013–14
2014–15

0

400

2010–11

800

1200

1600

2000

2400

3,146

2800
3200

991
1,113

2011–12

South East Consortium
for Special Education 2012–13
Total SELPA enrollment
in 2014–15: 126,984

2,400

1,261

2010–11

Total SELPA enrollment
in 2014–15: 271,799

2,000

1,101

2011–12

2014–15

Riverside County
Special Education
Local Plan Area

1,600

1,112

2013–14

1,193
1,312

2014–15

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

Number of students

Sources:  California State Auditor’s analysis of data obtained from the California Department of Education’s (Education) California Special Education
Management Information System and data from Education’s California Longitudinal Pupil Achievement Data System.

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January 2016

The Majority of Changes to Services Were Unrelated to AB 114, but
LEAs Can Improve Documentation of The Reasons
Because we were able to draw only limited conclusions from the
aggregate data, we selected and reviewed the IEPs of 60 students
across the four SELPAs to evaluate the impact on students from the
transfer of responsibility for special education mental health services
from counties to LEAs. It was the practice at all four SELPAs we visited
that IEP teams memorialized each student’s IEP on a written form
(IEP document) explaining what services, among other items, each
student’s IEP included. Most of the reductions in student mental health
services that we observed when we reviewed students’ IEP documents
were not related to the changes to state law. Instead, most service
reductions were due to factors that were independent of AB 114, such
as a student graduating or cases in which IEP teams decided that the
student had progressed to the point that he or she no longer required
the mental health service to be able to access his or her education.
However, we found that IEP teams did not always record in the IEP
document their rationale for why a service was removed from the
student’s IEP. Consequently, we relied in part on explanations from
LEAs, which we corroborated by reviewing supporting documentation
in order to reach our conclusion about whether the changes were
related to AB 114. When IEP teams do not record in the IEP document
the reasons why IEP service levels change, they may affect a parent’s
ability to participate in the IEP process and create difficulties for
subsequent educators and IEP teams in understanding the reasons why
a student does or does not receive a particular service.
For the Students We Reviewed, Most Reductions in Mental Health Services
Were Not Due to AB 114
Services in a student’s IEP must be designed to meet the student’s
goals and educational needs, and therefore it is reasonable to expect
that service levels will change from year to year for any given student,
including cases in which a student stops receiving mental health services
altogether. To determine whether AB 114 affected the rate at which
students stopped receiving all mental health services through an IEP, we
identified three student groups: students who received a mental health
service in school year 2009–10, in 2010–11, and in 2011–12, respectively.
We then tracked these groups of students into the next school year to
see whether they continued to have a mental health service listed in their
IEP documents. Figure 4 on the following page shows that each SELPA
we reviewed had consistent year‑to‑year rates of retention, both before
and after AB 114. For example, at South East, 63 percent of the students
who received a mental health service in 2009–10 continued getting a
service in 2010­–11. This retention rate was similar in the following year:
66 percent of students who received a mental health service in 2010–11
continued getting a service in 2011–12, the year after AB 114 took effect.

At each SELPA we reviewed, the
retention rate of students receiving
a mental health service remained
consistent before and after AB 114.

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If AB 114 had negatively affected service rates, we would have expected
the student groups from 2010­–11 and 2011–12 to show a lower retention
rate in the number of students who retained services. However, this was
not the case at the four SELPAs we reviewed, which leads us to conclude
that AB 114 did not likely affect the rate at which students experienced a
complete end to their mental health services.
Figure 4
The Rate at Which Students at Four Special Education Local Plan Areas Retained Mental Health Services in the
Following School Year

Number of Students

1,400

Mt. Diablo Unified School District

1,400

1,200

1,200

1,000

1,000

800

800

600

600

400

400

200

200

0

0
Year 1

Number of Students

1,400

Long Beach Unified School District

Year 2

Riverside County Special Education Local Plan Area

Year 1

1,400

1,200

1,200

1,000

1,000

800

800

600

600

400

400

200

200

0

Year 2

South East Consortium for Special Education

0
Year 1

Year 2

Year 1
Year 1
2009–10 (Pre-AB 114*)
2010–11 (Pre-AB 114)
2011–12 (AB 114 in effect)

Year 2
Year 2
2010–11 (Pre-AB 114)
2011–12 (AB 114 in effect)
2012–13 (AB 114 in effect)

Source:  California State Auditor’s analysis of data obtained from the California Department of Education’s California Special Education Management
Information System.
*  Assembly Bill 114.

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January 2016

However, as described in the previous section, using aggregate
data alone limited our ability to assess how students were affected
after AB 114 transferred responsibility to LEAs for the provision
of mental health services. To better understand whether and how
students were affected by this change in responsibility, we reviewed
a total of 60 student files, 15 from each of the four SELPAs we
visited, for students who received at least one mental health service
in the 2010–11 school year, just before AB 114 took effect. For each
student, we tracked the mental health services the student received
for two additional school years and found that most of the students
experienced some change in the number of mental health services
they received, including both increased and decreased service
levels.7 In total, 44 of the 60 students we reviewed had one or more
mental health services removed from their IEP after the changes
AB 114 made to state law. For these 44 students, we reviewed the
IEP document to determine why the IEP team removed the service.
When the IEP document did not contain explicit reasons why
the service was removed, we asked staff at the LEA in which the
student attended school to explain why the service was removed.
We then attempted to corroborate the statements staff made by
reviewing details recorded in the student’s IEP document or with
other available information.
In some cases, students who had been receiving mental health
services before the transfer of responsibility stopped receiving all
of their mental health services. Twenty‑nine of the 44 students
who had a mental health service removed stopped receiving all
mental health services within this period. For 21 of these students,
the LEAs stopped providing services for reasons unrelated to the
change in responsibility created by AB 114. Specifically, these
students graduated from high school or stopped attending school,
their IEP teams determined that they had improved in their
performance and no longer required the service to be able to
access a free and appropriate public education, or the IEP teams
determined a different mix of services that did not include mental
health services was more appropriate. For example, at Mt. Diablo
one student file we reviewed showed that the student received
mental health services in school year 2010–11 and then met her
associated goal in 2011–12. Due to her progress, the student no
longer received mental health services, although she continued in
special education to meet other needs. However, for eight of these
29 students, either the LEAs could not explain why they removed

7 

Five students we reviewed moved out of the SELPAs we selected for this audit before the 2012–13
school year (the second year after AB 114 took effect). For those students, we reviewed only
changes to mental health services that occurred in the school year immediately following when
AB 114 took effect.

Twenty‑nine of the 44 students we
reviewed who had a mental health
service removed stopped receiving
all mental health services within
this period.

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all mental health services or the removal of all mental health
services from the student’s IEP appeared connected to AB 114. We
discuss these students in greater detail in the next section.
The remaining 15 students of the 44 who had a mental health
service removed had some but not all of the mental health services
on their IEP removed. Similar to the students who had all of their
mental health services removed, we determined that some of
these service removals were attributable to positive outcomes,
such as a student meeting the behavior and social skills goals
contained in their IEP. In other cases, we saw evidence that an
IEP team determined that a different combination of mental
health services would better benefit the student than the existing
array of services, which led the IEP team to remove some mental
health services from the student’s IEP. However, for five of these
15 students, either the LEAs could not explain why they removed
the services or the reason appeared related to AB 114.
AB 114 Was the Reason for Some Changes to Mental Health Services,
but the Effect on Students Is Unclear
For 13 of the 44 students we
reviewed who had a mental
health service removed from their
IEPs, either the LEAs could not
satisfactorily explain the reason
for removing the services or the
removal was related to AB 114.

For 13 of the 44 students we reviewed who had a mental health
service removed from their IEPs, either the LEAs could not explain
the reason, there was no evidence to support their explanation
for removing the services, or the removal was related to AB 114. For
seven of these 13 students, five from Riverside and one each from
Mt. Diablo and Long Beach, the LEA could not satisfactorily explain
why the services were removed. In all but one of those cases, staff at
the LEAs where the students attended school offered an explanation
for why services were removed from student IEPs, but there
was no evidence supporting the explanations. For example, for
three students at Riverside, LEA staff indicated that it was possible
services changed because of county mental health department
recommendations. However, we could not corroborate the reasons
we were provided with any information presented in these students’
IEP documents. Because the IEP team for these students did not
document the reasons why they removed services from students’
IEPs, neither we nor these LEAs can know whether the removal
was related to AB 114. Therefore, it is possible that these students
were negatively affected by the transfer of responsibility that AB 114
created. We address this lack of documentation in the next section.
After reviewing the students’ IEP documents and discussing service
changes with the LEAs in which the students attended school, we
concluded that each of the six remaining students had a service
removed for reasons related to AB 114. Specifically, three of these
students’ services changed because the IEP team believed that
the county mental health department had previously included

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January 2016

services on the IEP that were not educationally related. Two of
these students were from Long Beach and one was from an LEA
within South East. Before AB 114 took effect, state law required
that the LEA adopt the recommendation of the county mental
health department after the IEP team reviewed and discussed the
recommended services. IEP team meeting notes and statements
from the special education directors where these three students
attended school indicated that the students stopped receiving
specific mental health services because the LEA did not believe
those services were related to the students’ ability to access a free
and appropriate public education. Long Beach’s special education
director stated that the IEP team removed the services from student
IEPs because the county had used medical criteria to determine the
student’s need instead of assessing the student’s educational needs.
However, we saw no evidence in the IEP documents we reviewed
that either Long Beach or South East’s LEA had reassessed the
students’ needs to determine that removing these services would
not affect their ability to access their education. Therefore, in
these three cases the LEAs lacked assurance that the services they
removed would not negatively affect the students’ access to a free
and appropriate education.
Finally, the remaining three students affected by AB 114, all of
whom were from LEAs within South East, lost services from their
IEPs for reasons connected to their eligibility for the California
Medical Assistance Program (Medi‑Cal). In the first two cases,
notes included in the students’ IEP documents show that in the
year after AB 114 took effect, IEP teams decided that the students
would obtain the mental health services that had previously been
on their IEPs through the Medi‑Cal program. As a result, the IEP
teams for these students removed these services from the students’
IEPs. Although we found no evidence in these first two cases that
the LEA encouraged the family to seek their services through
Medi‑Cal instead of leaving them on the IEP, this was not true for
the third student. In this case, the IEP team removed individual
counseling from the student’s IEP and noted that the parent would
follow up with a local nonprofit that provides services to children
who are Medi‑Cal eligible. The student services director where the
student attended school stated that this student had been receiving
services from an outside provider for many years before this
change. She also stated that after AB 114 transitioned responsibility
for mental health services, it was her LEA’s practice to remove
mental health services from IEPs if students were receiving the
same mental health services from outside providers who worked
with Medi‑Cal and if those students were eligible for or enrolled
in Medi‑Cal.

In these three cases the LEAs lacked
assurance that the services they
removed would not negatively
affect the students’ access to a free
and appropriate education.

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This school district’s practice does not align with federal
requirements for which services should be included in an IEP.
Federal criteria for which services LEAs should incorporate on a
student’s IEP do not include whether the student is eligible to receive
the service through other public programs. Instead the Individuals
with Disabilities Education Act (IDEA) directs LEAs to include and
consider several factors when determining which services a student
requires to access a free and appropriate public education. These
factors are advancement toward attaining the student’s annual goals,
the student’s ability to be involved and make progress in the general
education curriculum, and the student’s ability to be educated
and participate with other children. However, these factors do not
include consideration of who will provide the service or how the
LEA will pay for the cost of the service. As mentioned earlier, student
educational needs are the primary factor in determining whether a
service should be included in an IEP. Although LEAs are allowed to
seek reimbursement for the cost of IEP services from public benefit
programs, that is a financial matter and should not affect whether the
service is included in the student’s IEP.
The effect on these students from
having these mental health services
removed from their IEPs is not clear.

The effect on these students from having these mental health services
removed is not clear. All six of these students continued to receive
mental health services, from either their county mental health
department or their LEA, after these services were removed from
their IEPs. The most recent records we were able to obtain for these
students show that five of the six students either had graduated high
school or were continuing in special education, and the other student
left special education after entering high school. However, none of
these outcomes is complete assurance that these students were not
affected negatively when, because of AB 114, LEAs removed at least
one of their mental health services from the students’ IEPs.
LEAs Did Not Always Ensure That IEP Documents Included the Reasons
for Changes to Student IEPs
IDEA requires IEP teams to share information based on each team
member’s understanding of the student’s needs; determine goals
for the student that, if met, would support the student’s education;
determine what services the LEA should provide the student
to ensure that he or she obtains a free and appropriate public
education; and create an IEP document that details the services and
goals for that student. Federal law also requires LEAs to give prior
written notice to a child’s parents whenever the IEP team proposes
to initiate or change the educational placement or the provision of
a free and appropriate public education to the child, which includes
the services the LEA is offering the student. The notice must
contain a description of the proposed action, an explanation of
why the agency proposes the action, and any assessments, results,

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January 2016

records, or reports used as a basis for the change. Reflecting the
federal requirement, Education issued a letter in July 2012 to SELPA
directors, LEA superintendents, and school principals, among
others, which stated that changes to services in an IEP require
documentation that the student’s needs have changed, resulting
in the need to adjust the related services. Education also reviews
compliance with this federal requirement in its verification reviews,
and its policy is to create a corrective action plan if it finds the LEA
has not met legal requirements.
Earlier in this section, we described how in some cases we could
not find explicit reasons for reductions to student services in
the students’ IEP documents and instead asked LEA staff why a
service was changed. In many of those cases, the staff provided
plausible explanations for why services were removed that we
could corroborate with other information contained in the
students’ IEP documents or other supporting documents to
which they pointed us. However, we believe that it is important
for the student’s IEP document to stand on its own and contain
clear reasons why services are removed instead of relying on staff
knowledge to connect various areas of the IEP document or other
supporting documents to service reductions. Almost all—54 of
the 60—students we reviewed had a change to their mental health
services or their educational placement in the two years after
AB 114 took effect. For 22 of these 54 students, the IEP team did
not document the rationale for changes in mental health services
or educational placements offered to students in the two years after
AB 114 took effect. For 17 of those 22 students, the IEP document
did not include the reason the IEP team reduced the student’s
placement in the regular classroom or the mental health services
the student received. For the remaining five students, the IEP teams
increased the student’s placement in the regular classroom or the
mental health services that the LEA provided. The educational and
placement outcomes for these 22 students were mixed, but 14 of
the students graduated or were still in school and receiving mental
health services.
Although Education stated that it directs two review processes
to ensure that LEAs follow the federal requirement related to
documenting the reason for changes to student placement and
services, its oversight could use improvement. Education requires
LEAs to review their compliance with this federal requirement
once every four years during their special education self‑reviews,
which address student progress, goals, and services contained
in IEP documents. Further, the associate director stated that
Education also monitors LEAs’ processes for making changes
to IEPs as part of the verification reviews it performs. However,
Education only ensures that LEAs meet the legal requirements
for completing IEPs and providing prior written notice, none of

Although Education stated that
it directs two review processes
to ensure that LEAs follow the
federal requirement related to
documenting the reason for
changes to student placement
and services, its oversight could
use improvement.

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which specify that IEP teams must include reasons for changes in
the IEP document. The associate director noted that Education
expected that LEAs’ documentation of reasons for changes would
improve after the transition to AB 114, as they would be responsible
for the entire process instead of sharing responsibility with other
entities. However, despite Education’s expectations and prior
communication, LEAs have not always included clear reasons in
IEP documents for the changes IEP teams make. Therefore, we
believe Education could do more to remind LEAs about this federal
requirement, communicate its expectations for how LEAs will meet
it, and monitor their compliance.
Changes to IEP documents need
to be well documented for various
reasons, most significantly so
that parents have an adequate
understanding of the process.

Changes to IEP documents need to be well documented for various
reasons, most significantly so that parents have an adequate
understanding of the process. Federal law requires LEAs to obtain
a parent’s agreement to amendments to IEPs. Further, the law
gives parents the right to examine all records relating to their
child, to participate in IEP meetings, and to obtain an independent
evaluation. Failure to document relevant information could
prevent parents from exercising these important rights and may
place them at a disadvantage when considering whether to agree
to the amendments. Although IEP teams discuss the provision of
services for the student with parents during IEP meetings, if this
information is not recorded in the IEP document, parents cannot
easily reference it at a later date. In addition, educators and future
IEP teams need to be able to readily understand why changes
were made to students’ IEPs, particularly in those situations where
students move between schools or LEAs.
Education Lacks Adequate Information About the Frequency of
Mental Health Services
We attempted to analyze whether the frequency with which
students received mental health services was affected by AB 114.
However, for one SELPA we reviewed, South East, there were a
significant number of students for whom frequency data were not
available in Education’s California Special Education Management
Information System (CASEMIS). Federal law requires that student
IEPs include the frequency with which a student will receive the
services. For example, the IEP must indicate whether the student
will receive individual counseling services daily, weekly, monthly, or
annually. However, Education does not require LEAs to report this
information, either in aggregate or by student. Education’s associate
director for special education stated that the department does not
collect data about the frequency of services because Education is
not required to do so in order to meet its reporting obligations

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January 2016

under federal or state special education law. He also stated that he
believes the information by itself would lack the required context
that examining a student’s full record can provide.
However, collecting and analyzing data about the frequency of
services would provide Education with information it could use as
it oversees the special education program. Although the context
of a student’s full record could be helpful for determining why the
frequency of an individual student’s services changed, aggregated
information about the overall occurrence of services could also
be beneficial. For example, if Education collected and analyzed
aggregate data about the frequency of mental health services, it
could compare the frequency of counseling services a LEA offers
students in one year to the frequency in the following year. If, after
performing this analysis, Education observed that a LEA had an
overall trend toward offering a particular counseling service less
frequently, it could then follow up with the LEA and ask further
questions about the reasons for the changes in service levels.
For the SELPAs we reviewed, we identified all students who
received a mental health service in the 2010–11 school year where
these specific services continued in 2011–12. We then compared
the frequency with which the student’s IEP continued to include
these specific services between the two years. We were able to
analyze the frequency of these services at Mt. Diablo, Riverside, and
Long Beach and found that for most of these services the frequency
did not change in 2011–12. However, frequency data were available
for fewer than 10 percent of these services in South East. Therefore,
we do not present a conclusion related to that SELPA.
County Mental Health Departments Continue to Provide Additional
Services to Students Outside the IEP Process
Counties continue to provide to special education students mental
health services that are not required by the students’ IEPs. As
discussed in the Introduction, county mental health departments
can provide mental health services to children outside of the IEP
process through the Early and Periodic, Screening, Diagnostic, and
Treatment program. We reviewed 60 students in four counties
and found that 40 students, or 67 percent, had received additional
services from county mental health departments, beyond those
related to special education, during the two years after AB 114 took
effect. For example, we noted an instance in which a county mental
health department provided five different services to a student
during the 2012–13 school year that were outside the services
indicated in the student’s IEP document, as shown in Figure 5 on
the following page.

Of the 60 students we reviewed in
four counties, 40 received additional
services from county mental health
departments, beyond those related
to special education, during the
two years after AB 114 took effect.

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Figure 5
Example of Student Who Received Additional Services Outside the Individualized Education Program

2010–11 School Year
Services Provided by County and
Not Listed on Student's Individualized
Education Program (IEP)
•
•
•
•
•
•
•

Treatment Planning
Assessment
Crisis Intervention
Case Management
Collateral Services*
Medication Management
Face-to-Face Activity

2012–13 School Year
Services Provided by County
and Not Listed on Student's IEP
•
•
•
•
•

Group Treatment
Medication Management
Record Review
Case Management
Individual Treatment

Pre-Assembly Bill 114
Services and Providers Listed
on Student's IEP
COUNTY

• Individual Counseling and Guidance
• Group Counseling and Guidance
DISTRICT OR DISTRICT CONTRACTOR

• Individual Counseling
• Group Counseling

Assembly Bill 114 In Effect
Services and Providers Listed
on Student's IEP
DISTRICT OR DISTRICT CONTRACTOR

• Individual Counseling
• Group Counseling and Guidance

Sources:  California State Auditor’s analysis of student records from local educational agency within the South East Consortium for Special Education
and patient records from the Santa Clara County Department of Behavioral Health Services.
Note:  From our review of the mental health services students received through an IEP, we determined that the services students receive can change
over time based on the student’s need for the services. Therefore, changes in the overall number of services this student received do not necessarily
reflect a failure of any agency to provide an adequate level of service to the student.
*  According to state regulations, collateral services are provided to a significant support person in the beneficiary’s life for the purpose of meeting
the needs of the beneficiary in terms of achieving the goals of their client plan. Collateral services may include consultation and training of the
significant support person(s) to assist in better utilization of specialty mental health services by the beneficiary and to assist in better understanding
of mental illness, and family counseling with the significant support person(s).

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January 2016

Only one of the four SELPAs we reviewed continued to work
with the county mental health department after the law changed,
but students from all four SELPAs we reviewed received non‑IEP
mental health services from all of the counties we reviewed after
AB 114 took effect. Specifically, Mt. Diablo continues to contract
with the Contra Costa County mental health department to
provide IEP‑related mental health services to its Medi‑Cal‑eligible
students. In contrast, Long Beach, Riverside, and South East do
not have similar contracts with their respective county mental
health departments as service providers. However, the county
mental health departments that correspond to these three SELPAs
continued to provide non‑IEP mental health services to the
majority of the special education students we reviewed.
As discussed earlier, many of the students we reviewed stopped
receiving mental health services from their LEAs for a variety of
reasons. The reasons services stopped often related to common
occurrences, such as students’ improved performance, completion of
high school, or adjustments to the mix of services to better address
the student’s needs. Similarly, nearly half of the students we reviewed
who received a non-IEP service from their county in 2010–11 had
experienced a complete end to their non-IEP mental health services
by the 2012–13 school year. The decline in county mental health
services not listed on IEP documents indicates that the two types of
entities, LEAs and county mental health departments, which have
different mandates to provide care to students, were both decreasing
services to many of these students at the same time.
Fewer Students are Receiving Residential Treatment Services, but
LEAs Do Not Always Clearly Document Their Decisions Regarding This
Treatment in Students’ IEP Documents
After AB 114 took effect, LEAs began reassessing student
placements in residential treatment as part of the transfer of
responsibility for mental health services. Education and LEAs
believe that LEAs can often better serve students in a less restrictive
environment, which has resulted in fewer students being placed
into residential treatment. However, LEAs are not always clearly
recording in students’ IEP documents their decisions regarding
residential placement or their considerations of the potential
harmful effects of a more restrictive environment.
LEAs Are Reassessing Placement of Students in Residential Treatment,
With a Focus on Serving Them in the Least Restrictive Environment
We reviewed the number of students receiving residential treatment
services—which requires one of the most restrictive educational
placements—before and after AB 114 and found that the total

The reasons services stopped often
related to common occurrences,
such as students’ improved
performance, completion of high
school, or adjustments to the mix
of services to better address the
student’s needs.

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number of students receiving residential treatment services has
dropped since AB 114 took effect. Education’s CASEMIS manual
defines residential treatment as a 24‑hour, out‑of‑home placement
that provides intensive therapeutic services to support students’
educational programs. The number of students throughout
the State whose IEP contained residential treatment services—
including students at the four SELPAs we reviewed—decreased
from the 2010–11 school year to the 2014–15 school year, as shown
in Table 4. Among the SELPAs we reviewed, Long Beach and
Riverside showed the steepest declines in the number of students
receiving residential treatment services. The results of this analysis
suggest that AB 114 had an effect on the total number of students
who received residential treatment services.
Table 4
Number of Students With Residential Treatment Services in Their
Individualized Education Program by Special Education Local Plan Area
SCHOOL YEAR
2010–11

2011–12

2012–13

2013–14

Mt. Diablo Unified School District

18

12

≤10

Long Beach Unified School District

166

179

166

101

30

Riverside County Special Education
Local Area Plan

30

31

22

≤10

≤10

≤10

≤10

≤10

≤10

≤10

1,024

1,022

845

811

772

South East Consortium for
Special Education
All other special education local
plan areas

≤10

2014–15

≤10

Source:  California State Auditor’s analysis of data obtained from the California Department of
Education’s California Special Education Management Information System.
Note:  The count of the number of students with residential treatment services included in their
individual education program may include the same student being tallied in more than one special
education local plan area (SELPA) during a given school year. This condition would result if the
student transferred between SELPAs during a school year. Also, to protect student privacy, the table
presents numbers of 10 or less with the notation ≤10.
Pre‑Assembly Bill 114

When presented with the analysis regarding the reduction in
residential placements, Education and the SELPAs we reviewed
provided several possible explanations for the decline. In general,
the reasons were related to compliance with the federal requirement
to provide special education and related services within the least
restrictive environment that still allows students to access a free
and appropriate public education. As discussed in the Introduction,
before AB 114 took effect, county mental health departments made
all recommendations about the mental health services that would
appear in a student’s IEP, which would result in decisions to provide
a student residential treatment services. However, Education

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explained that after AB 114 took effect, IEP teams made decisions
about how individual students’ needs could best be met, and
in some cases decided that the student could be better served
in a nonresidential environment with additional assistance. All
four SELPAs agreed that LEAs can now better serve students in
less restrictive environments because they now have complete
control in tailoring students’ IEPs to meet their needs. In addition,
the special education director at Long Beach believes that data
entry errors, wherein students were incorrectly reported as being
in residential treatment, could be contributing to the apparent
reduction in residential placements. The explanations provided by
Education and the LEAs could conceivably result in a decline in
residential placements. However, simply examining the aggregate
number of students in those placements cannot corroborate
these explanations.
To further understand LEA decisions to remove students from
residential treatment, we reviewed the files for a selection of
students across the four SELPAs who were receiving or had
received residential treatment services. Specifically, we reviewed
records for 18 students who were receiving residential treatment
services in school year 2010–11 and continued receiving special
education services in school year 2011–12—five each from Long
Beach, Riverside, and Mt. Diablo, and three from South East. We
reviewed each student’s placement in school years 2010–11 through
2012–13. Our review showed that some students transitioned out
of residential treatment for a variety of reasons, including when IEP
teams determined that the student had shown improvement and no
longer needed that level of treatment. Six of these 18 students were
transitioned into a less restrictive environment, and for five of these
six students, the IEP team recorded in the IEP document that the
student’s improvement was the reason for the student’s transition
out of residential treatment. For example, an IEP team at Riverside
transitioned a student out of residential treatment and into a less
restrictive day treatment program after the IEP team noted that the
student had measurably improved, followed direction from staff,
and gone three months without a behavioral incident. Because
the IEP documentation was so poor for the sixth student, who
was from Long Beach, we were unable to determine whether that
student was removed due to an improvement. Another four of
the 18 students graduated from high school while in residential
treatment and exited the IEP process entirely, one student dropped
out of school while in the residential setting, and another moved
and did not continue receiving residential treatment services at
the student’s new SELPA. The remaining six students we reviewed
stayed in residential treatment through the 2012–13 school year.

Simply examining the aggregate
number of students in residential
placements cannot corroborate the
explanations provided by Education
and the LEAs.

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LEAs Did Not Always Note on the IEP Document the Reasons for
Residential Treatment or the Potential Harms of the Placement

We found that LEAs did not clearly
document the reasons for placement
into residential treatment.

Although LEAs most often had evidence demonstrating the reasons
why they removed students from residential treatment, we found
that LEAs did not clearly document the reasons for placement
into residential treatment. State regulations require the IEP team
to document its rationale for placing the student in a setting other
than the school and classroom that the student would otherwise
attend if he or she did not have a disability, also referred to as
the least restrictive environment. We expected that LEAs would
include the rationale on the student’s IEP document but found
this was not the case. The IEP documents we reviewed generally
contained a section related to the educational setting of the student
and provided space for the IEP team to describe why the student
would not participate in the regular classroom and extracurricular
and nonacademic activities, as shown in the example in Figure 6.
However, we found that none of the IEP documents we reviewed
for the 18 students we selected contained a statement in this part
of the IEP document that met the requirement. For example, the
IEP document for one student from Mt. Diablo merely stated that
the student was placed outside of a regular classroom because the
student was benefiting from services received from the nonpublic
school program. In this case, we concluded that the IEP team was
using the circular argument that the student required residential
placement simply because that student was currently benefiting
from that specific residential placement. We would have expected
that the IEP team would include a statement explaining how
the student’s disability affected his or her ability to participate
in the regular education environment, the additional services that
the student would require to access his or her education, and a
conclusion that the services the student required were not available
in a less restrictive environment than the residential setting. We
found similarly vague or incomplete statements in the other IEP
documents we reviewed at each SELPA we audited.
When we asked LEA staff why the rationale for placement was
not clearly written into this section in the IEP documents, they
suggested that the rationale could be evidenced in different places
in the document, and Mt. Diablo’s special education director
further suggested that the rationale could be found in additional
documentation in the student file. However, none of the locations
within the IEP document that the LEAs directed us to and none
of the additional documentation within the student files that staff
at LEAs provided for review contained an appropriate rationale
for placing the 18 students we reviewed in residential treatment.
In some cases, staff at LEAs pointed to descriptions of the
student’s behaviors, such as aggression or disobedience, but these

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descriptions lacked an explanation as to why the student’s behaviors
created a need for residential placement or why the student’s needs
could not be met in a less restrictive environment.
Figure 6
Example of Individualized Education Program Educational Setting Page From Mt. Diablo Unified School District

MT. DIABLO UNIFIED SELPA
Offer of FAPE *
EDUCATIONAL SETTING
Name Student Name
Physical Education

General

Specially Designed

Other APE †

District of Service Mt. Diablo Unified
School of Attendance School Name
School Type Nonpublic residential school
Federal Setting Residential facility
Federal Preschool Setting
All special education services provided at student’s school of residence?
Yes No (rationale)
educational and behavioral needs cannot be met at her school of residence

Student’s

100 % of time student is outside the regular class & extracurricular & non academic activities
0
% of time student is in the regular class & extracurricular & non academic activities
Student will not participate in the regular class & extracurricular & non academic activities 100%
because Student receives educational benefit from accessing her education through the Residential program

Source:  Student file at Mt. Diablo Unified School District.
*  FAPE:  Free and Appropriate Public Education.
†  APE:  Adapted Physical Education.

In addition to not adequately recording the rationale for placement
decisions in the IEP document, LEAs did not always properly note
their consideration of the potentially harmful effects resulting from
the student’s placement in residential treatment. Federal regulations
require that, when selecting the least restrictive environment,
LEAs must consider any potentially harmful effect on the child
or on the quality of services that he or she receives. In a review of
the 18 files previously described, we found that Long Beach, South
East, and Mt. Diablo did not include the required consideration
of the potential harmful effects of placement decisions in any of
the IEP documents we reviewed at those LEAs. At Riverside we
found that IEP teams included their consideration of the potential
harmful effects in the IEP documents for three of the five students
we reviewed, and in all but one IEP document for each of the other
two students. Long Beach’s special education director stated that the
LEA’s consideration of potential harmful effects was not included
within the IEP documents because federal regulation requires only
that they be considered, not specifically recorded within the student’s
IEP document. However, we believe it is prudent for LEAs to include

unique

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this information directly in the IEP document to avoid any confusion
and minimize the research needed to answer questions about IEP team
decisions in this area if a student moves or IEP team members change.
In another instance, a director of special education at an LEA in South
East explained that the IEP team did not have a clear understanding
of what would be appropriate documentation for its consideration of
potential harmful effects.
All four SELPAs claimed that in 2010–11, when the county was
responsible for placing students into residential treatment, the IEP
teams had difficulty in obtaining information from the county regarding
the reasons why residential treatment was the most appropriate
placement for the student. According to the SELPAs, this resulted in
the IEP teams lacking the information necessary to appropriately record
in the IEP document the rationale for the student’s placement.
Nevertheless, we would expect to find that in subsequent years when
IEP teams became responsible for placement decisions, they would
have appropriately documented the rationale for those decisions.
However, as discussed previously, this did not occur. Without clearly
indicating in the IEP document the rationales and the potential harmful
effects of placement in residential treatment, IEP
teams cannot easily demonstrate that they are
addressing the legal requirements when placing
Selected Indicators and Targets From the
California Department of Education Individuals
students in a more restrictive environment.
with Disabilities Education Act Annual
Moreover, if the student moves to another LEA or
Performance Report
SELPA, the new IEP team may not fully understand
the prior team’s decisions or the student’s needs.
INDICATOR
TARGET
Therefore, it is important that as LEAs continue to
Graduation rate
73 percent graduate with a
consider the most appropriate educational placement
regular diploma
for their special education students, they clearly
Dropout rate
Less than 22 percent
indicate in the student’s IEP their rationale for the
Statewide assessment 95 percent participation with
placement decisions and the harmful effects that they
approximately 89 percent proficient,
have considered may result from those placements.
depending on subject and grade
Suspension
and expulsion

Less than 10 percent of LEAs with
significant discrepancies in the rate
of suspensions or expulsions for
more than 10 days for children with
individualized education programs

Participation
in general
education classes

76 percent of students participate
for more than 80 percent of the day

Post‑school outcomes

69 percent of students enrolled
in any post secondary education,
training program, or employment
within one year of leaving
high school

Source:  California Department of Education’s federal fiscal
year 2013 Individuals with Disabilities Education Act Annual
Performance Report.

LEAs Could Improve Their Monitoring of Special
Education Student Outcomes
California has established performance targets
for its special education program to comply
with federal requirements. IDEA requires each
state to establish targets for indicators of special
education performance and to report annually to
the U.S. Department of Education and the public on
these targets. To comply with these requirements,
Education has established 17 performance indicators
with targets for its annual performance reports. The
text box shows the six indicators that we determined
could be used to measure the educational outcomes

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of special education students who receive mental health services,
as listed in the annual performance report Education submitted to
the U.S. Department of Education in 2015.8 SELPAs are required
by state law to forward LEA data on individual students to
Education, which in turn compiles aggregate data for its annual
performance report.
Although LEAs collect data on their students as part of Education’s
reporting process, the LEAs we reviewed varied in the extent to
which they use those data to track the educational outcomes of
special education students who receive mental health services. For
example, Education has established a graduation target for special
education students, but East Side Union High School District
(East Side) does not use the graduation rate information for the
subset of special education students who receive mental health
services to monitor its program. Instead, its director of assessment
and accountability noted that the IEP team is responsible for
ensuring that special education students achieve optimal outcomes.
Specifically, she noted that East Side’s IEP teams have primary
responsibility for tracking student outcomes related to graduation,
as the transition plan they create includes a target graduation date
and the teams meet at least annually to review student progress
in transitioning out of high school. However, when LEAs do not
review aggregate outcomes for special education students who
receive mental health services, they are unable to determine
whether significant changes to special education services, such as
changes in mental health service contractors, negatively affected
their students systematically. For example, if a contractor ceased
operations and an alternative provider was selected by East Side, it
would not evaluate whether fewer students were graduating after
they received services from the new provider, or whether more
students were being suspended as a result of the change.
The special education director at Long Beach informed us that
Long Beach performs routine analyses of the aggregate educational
outcomes of the LEA’s special education students. These analyses
focus on better understanding the development of special education
students and identifying any negative trends. Similarly, he stated
that these analyses can determine whether a school site places a
disproportionate percentage of its special education students in
residential treatment. However, the Long Beach director told us
that his LEA has not performed specific analyses related to special
education students who receive mental health services because
there have not been any specific concerns within Long Beach that
would require the LEA to disaggregate those students from other
high‑risk populations.
8 

The U.S. Department of Education required the California Department of Education to submit its
annual performance report in February 2015 using data from the 2013–14 school year.

Although LEAs collect data
on their students as part of
Education’s reporting process,
LEAs varied greatly in the extent
to which they use those data to
track the educational outcomes
of special education students who
receive mental health services.

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None of the LEAs we reviewed
measure the outcomes in six areas
for the subset of their special
education students who receive
mental health services, nor do
they examine how those outcomes
change over time.

The other two LEAs we reviewed either are performing analyses
on their students who receive mental health services or plan to
do so. The executive director of special education at Murrieta
Valley Unified School District (Murrieta Valley), part of Riverside,
confirmed that for the past several years, her LEA has been
reviewing outcome data published by Education. She provided
a presentation she created for the LEA’s staff comparing student
educational outcomes at Murrieta Valley and associated targets.
She stated that the LEA is in the process of analyzing its data in
a more comprehensive manner for students receiving mental
health services and informed a parent stakeholder group about
this effort. Mt. Diablo performs an analysis of special education
student outcomes that comes the closest to looking at the outcomes
for students receiving mental health services among the LEAs we
reviewed. Specifically, it runs reports on the graduation rates for
its various school sites and programs over the last five years, some
of which are specific to special education students who receive
mental health services. However, Mt. Diablo did not provide us any
information related to the collective group of students receiving
mental health services. None of the LEAs we reviewed measure the
outcomes in all six areas described in the text box on page 38 for
the subset of their special education students who receive mental
health services, nor do they examine how those outcomes change
over time for these students.
From a statewide perspective, Education does not perform any
analysis of the outcomes of students who receive mental health
services. According to the associate director of its special education
division, Education does not analyze the statewide performance
indicators for any subsets of populations, such as special education
students receiving mental health services, unless responding to a
specific request. The associate director noted that Education has the
data on these students and can run specialized reports if requested,
but that it is not required to do so and has limited resources
to perform such an analysis. Specifically, he noted that IDEA
establishes a single category for special education that includes
all related services, and that IDEA does not establish any special
classification or place additional expectations or requirements
on Education concerning mental health services. Consequently,
Education produces its annual IDEA performance report with the
outcome measures for all special education students in the State
rather than focusing specifically on those students receiving mental
health services.
Education and LEAs could significantly improve the quality of
mental health programs by performing data analysis and follow‑up.
As we mentioned in the Introduction, the governor expected that
the passage of AB 114 would strengthen the connection between
student services and educational outcomes. However, as we

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discussed earlier, this connection does not currently exist outside of
the IEP teams. Given that the Legislature separately funds mental
health services for special education students in the State’s budget,
indicating an emphasis on students receiving these services, we
would expect Education to take the lead in performing analyses and
follow‑ups. By tracking and analyzing this information, Education
would be able to demonstrate to the Legislature how its investment
in these mental health services affects special education student
outcomes, and it could intervene to address any negative trends it
identifies. Similarly, LEAs would be able to identify whether service
trends, such as changes in providers or reductions in mental health
services over time, are associated with improving or deteriorating
educational outcomes for students and could then alert IEP teams
concerning problems or negative trends they identify. For these
reasons, we believe it is important that Education and LEAs
improve their tracking of outcomes for students who receive
mental health services through IEPs.
Recommendations
Legislature
The Legislature should amend state law to require Education to
report annually, beginning March 2017, regarding the outcomes for
students receiving mental health services in the six key areas we
identified. The report to the Legislature should include outcome
data for the most recently completed school year and should
compare the outcomes for students receiving mental health services
with the outcomes for other special education students. Subsequent
reports should also identify any trends in outcome data from
one year to the next. Education should also provide comments in
the report on the trends that it identifies and any actions it plans
to take to improve the outcomes for students who receive mental
health services.
Entities We Reviewed
To ensure that it provides mental health services through an IEP to
all students who require such services, Long Beach should analyze
the number of students to whom it provides these services and
determine whether the annual decline can be attributed to its
early intervention program. If the decline cannot be attributed to
the early intervention program, Long Beach should reassess its
process for determining whether students require mental health
services through an IEP and make any necessary improvements to
that process.

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To ensure that all LEAs comply with federal special education
requirements, Education should require them to include directly
in a student’s IEP document reasons for any changes to student
placement or services.
To better communicate this information to parents and future
IEP teams, each SELPA we visited should develop a process to
ensure that IEP teams record, in student IEP documents, the
reasons for any changes to services, including changes to mental
health services, and student placements.
To enable it to review additional areas of its special education
program for quality assurance, Education should collect
information about the frequency of the provision of each service
contained in all students’ IEPs. Education should then use this
information to annually review the frequency of mental health
services and follow up with SELPAs when it observes a significant
reduction in the frequency of services.
To ensure that LEAs comply with federal and state requirements,
Education should require all LEAs to use the IEP document to
communicate the rationale for residential treatment and any
potential harmful effects of such placement.
To ensure that they comply with federal and state requirements,
each SELPA we visited should develop a process to ensure that
IEP teams record, in student IEP documents, the rationale
for residential treatment and any potential harmful effects of
such placement.
To better understand the effectiveness of the mental health services
in their special education programs, the LEAs we reviewed should
use the six performance indicators we identified to perform analysis
annually on the subset of students receiving mental health services.
Education should analyze and report to the Legislature, by
May 30, 2016, on the outcomes for students receiving mental health
services statewide, including outcomes across the six performance
indicators we identified, in order to demonstrate whether
those services are effective. Once it has reported this statewide
information, Education should provide each LEA throughout
the State a report regarding the outcomes for the students the
LEA served.

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Chapter 2
THE STATE CAN IMPROVE FISCAL OVERSIGHT BY
TRACKING THE TOTAL COST TO PROVIDE MENTAL HEALTH
SERVICES TO STUDENTS
Key Points
»» None of the four local educational agencies (LEAs) we reviewed
could determine their total costs to provide mental health
services through individualized education programs (IEPs),
because the California Department of Education (Education)
does not require LEAs to track these expenditures. As a result,
the State cannot determine whether it now costs less to provide
these services, as some expected it would after Assembly Bill 114
(AB 114) took effect.
»» LEAs we reviewed use multiple sources of funding to provide
students with mental health services through an IEP, but
Mt. Diablo Unified School District (Mt. Diablo) and Murrieta
Valley Unified School District (Murrieta Valley), which is part of
Riverside County Special Education Local Plan Area (Riverside),
have not spent all of the funding they receive that is dedicated for
that purpose.
»» Only one of the four LEAs we visited, Mt. Diablo, has contracted
with its county to obtain California Medical Assistance Program
(Medi‑Cal) funding through the Early and Periodic Screening,
Diagnostic, and Treatment (EPSDT) program. Requiring
counties to collaborate with special education local plan areas
(SELPAs) and LEAs could financially benefit LEAs and counties
and increase the number of children to whom LEAs provide
mental health services.
»» The four LEAs we reviewed used staff or contracted personnel
who met all the minimum requirements included in state
regulations for the provision of mental health services, although
the LEAs did not always maintain records to document the
qualifications of their contracted personnel.
LEAs Do Not Track How Much They Spend to Provide Mental Health
Services to Special Education Students
Each of the four LEAs we reviewed—Mt. Diablo, East Side
Union High School District (East Side), Murrieta Valley, and
Long Beach Unified School District (Long Beach)—used more
than one source of revenue to provide students with mental

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health services through an IEP. As discussed in the Introduction,
LEAs receive funding from a few different sources that can be
used to provide the mental health services included in student
IEPs. The most restricted funding that Education distributes to
LEAs is federal and state mental health funding, which can be
used only to provide mental health services called for in student
IEPs (mental health funding). However, LEAs can also use their
general special education funding (special education funding) for
any purpose related to special education, including for mental
health services. LEAs can also pay for mental health services
using money from the unrestricted portion of their general fund
(unrestricted funding), which is not specific to the special education
program. At all four LEAs we reviewed, special education directors
and fiscal analysts stated that in addition to spending their mental
health funding, they also used their special education funding or
unrestricted funding to provide mental health services to students.

No statewide information exists
that summarizes the total amount
spent to provide the mental health
services in student IEPs.

Although LEAs use multiple funding sources to provide the mental
health services in student IEPs, they are not required to track or
report to Education the total cost of providing these services.
State law requires LEAs to follow the definitions, instructions, and
procedures published in the California School Accounting Manual
(accounting manual). The accounting manual, which is published by
Education, does not define a unique code or identifier for tracking
mental health expenditures. Although Education requires LEAs
to report how much of their mental health funding they spend,
it does not require them to track or report total expenditures for
mental health services. For example, if an LEA spends $100,000
of mental health funding, it must report that expenditure to
Education. However, an LEA that spends $100,000 of its unrestricted
funding on mental health services is not required to report that
spending to Education as money spent on mental health services.
Therefore, no statewide information exists that summarizes the total
amount spent to provide the mental health services in student IEPs.
At the local level, none of the four LEAs we reviewed followed a
formal process for tracking all IEP mental health expenditures,
although Long Beach and Mt. Diablo had taken steps to attempt
to quantify the amount they spend on mental health services.
Specifically, Long Beach tracked the amount of unrestricted
funding it transferred from its general fund to pay for mental health
services—roughly $1.4 million in total from fiscal year 2011–12
through 2014–15. However, according to its director of fiscal
services, Long Beach also used its special education funding to pay
for some mental health services, but she was unable to determine
the amount spent. Similarly, Mt. Diablo’s fiscal analyst informed
us that his LEA used its own accounting codes to track the mental
health expenditures it used special education funding to pay for.
Based on the information he provided, for fiscal years 2011–12

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January 2016

through 2014–15, the LEA’s total mental health expenditures
from special education funding were $22.5 million. However, the
fiscal analyst stated that Mt. Diablo also uses Medi‑Cal funding
to provide mental health services to both special education and
general education students but he could not determine the amount
spent to provide IEP mental health services. Consequently, none
of the LEAs we reviewed could easily determine the total cost of
providing mental health services to students in special education.
Without a statewide requirement for LEAs to track and report
mental health expenditures, the State cannot determine the fiscal
impact AB 114 has had on LEAs, or whether AB 114 has resulted
in cost savings, as was discussed at the time the Legislature was
considering the bill. Before AB 114 took effect, the Legislature
annually appropriated a specific amount of funding for mental
health services in student IEPs, and counties could submit
reimbursement claims for state‑mandated costs that exceeded the
appropriation—with no apparent limit on the amounts counties
could request. Through this process, the State could track the
amount that was spent on these services. However, since AB 114
took effect in July 2011, Education has not required comprehensive
tracking of mental health expenditures.
When we discussed the tracking and reporting of mental
health‑related expenditures with Education, the associate director
of special education explained that neither state nor federal law
requires Education to track expenditures related to specific special
education services. Nevertheless, this information would be valuable
for policy and funding decisions about the mental health services
provided by LEAs and SELPAs. Because Education is responsible
for distributing mental health funding and overseeing the special
education program, it is important for it to collect this information
and make it available to policymakers, even though Education
informed us that there is no legal requirement for it to do so.
The associate director also explained that there would be a need
to create guidelines to define what is considered a mental health
service expenditure, because definitions of these services are not
specified in state law and the definitions of mental health services
in federal regulations are not considered to be an exhaustive list.
However, in January 2012, Education issued guidance to LEAs that
describes the allowable uses for mental health funding. Specifically,
this guidance describes the general categories of expenses for
which LEAs can use mental health funding and establishes that the
expenditures must be related to services in a student’s IEP. With
this existing guidance as a foundation, we do not believe it would
be a difficult task for Education to establish instructions for LEAs
about which expenditures to track using a newly developed mental
health expenditure code.

Since AB 114 took effect in July 2011,
Education has not required
comprehensive tracking of mental
health expenditures.

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Without this information, the
Legislature and the public cannot
know whether the transfer of
responsibility brought by AB 114
has reduced the cost to provide
these services.

Finally, the director of Education’s fiscal services division (fiscal
services director) raised several concerns with tracking IEP‑related
mental health expenditures. The fiscal services director stated
that Education cannot add a new accounting code for IEP mental
health expenditures to its existing accounting structure without
losing the specificity of its accounting for other costs. For example,
if some of the existing costs an LEA incurs under the accounting
code for nonpublic school spending are related to IEP mental
health services, a new accounting code to track spending for those
services would reduce Education’s ability to track other types
of nonpublic school spending. He further believed that placing
responsibility on LEAs to track these mental health services costs
would be burdensome and that, following Education’s normal
practice for updating its accounting manual, it would take over a
year to implement a new accounting code. Despite these challenges,
we believe it is important for Education to be able to explain how
much LEAs spend on IEP mental health services. Without this
information, the Legislature and the public cannot know whether
the transfer of responsibility brought by AB 114 has reduced the
cost to provide these services.
Two LEAs We Reviewed Have Not Spent All of the Mental Health
Funding They Received
LEAs can choose to spend all or only a portion of the mental
health funding they receive annually. The State has not established
a deadline by which LEAs must spend the mental health funding
they receive from state sources. In effect, this allows LEAs to carry
over all or a portion of their state mental health funds indefinitely.
In contrast, LEAs must spend federal mental health funding by the
end of the second federal fiscal year after receipt. Both East Side
and Long Beach spent most or all of their state and federal mental
health funding in fiscal years 2010–11 through 2014–15. However,
Mt. Diablo and Murrieta Valley retained larger cumulative balances
of their restricted mental health funds at the end of each fiscal year,
although Mt. Diablo spent more than it received in three of the past
five fiscal years. Figure 7 shows the mental health budget, revenues,
and expenditures at each of the four LEAs we reviewed.

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January 2016

Figure 7
Budget, Revenues, and Expenditures for Restricted Mental Health Funding at Four Local Educational Agencies
Mt. Diablo
Unified School District*

$7

Budgeted Expenditures
Actual Revenue Received
Actual Expenditures

6
5
4
3
2
1
0

Long Beach
Unified School District

6
5
4
3
2
1
0
$7

Murrieta Valley
Unified School District†

Dollars in Millions

$7

6
5
4
3
2
1
0

East Side Union
High School District

$7
6
5
4
3
2
1
0
2010–11

2011–12

2012–13

2013–14

2014–15

Fiscal Year
Source:  California State Auditor’s analysis of district mental health budget, revenue, and expenditure reports for fiscal years 2010–11 through 2014–15.
Note:  Expenditures may be higher than revenues for some years because local educational agencies can carry over unspent federal mental health funding
for a limited time period and unspent state mental health funding indefinitely. Also, local educational agencies may transfer less restricted funding and
spend that funding as mental health funding.
*  Mt. Diablo Unified School District’s budgeted expenditures for fiscal years 2011–12 and 2012–13 were significantly higher than its actual revenues and
expenditures because the district budgeted revenues along with its prior unspent revenues to arrive at budgeted expenditure amounts.
†  Murrieta Valley Unified School District (Murrieta Valley) did not budget any expenditures for its restricted mental health funding for fiscal years 2010–11
and 2011–12. Murrieta Valley’s director of special education stated that in 2010–11 the district’s special education local plan area was responsible for
managing the district’s mental health funding, and therefore the district did not develop a budget for this funding. She further stated that in 2011–12
the district used other resources to provide mental health services to students instead of its mental health funding because the district was concerned
that the dedicated mental health funding would not be permanent.

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Mt. Diablo initially built up a balance of mental health funding,
but the balance has since decreased. Mt. Diablo’s special education
director stated that the LEA used some of its special education
funding and unrestricted general funding to pay for mental health
services, rather than using its mental health funding. Although she
was not with the LEA at the time, the director believes that it may
have wanted to keep a balance of mental health funding to help
lessen the impact of any potential future funding shortfall and to help
Mt. Diablo pay for mental health services that it had not previously
been directly billed for. She anticipates that the LEA will use up the
remaining accumulated balance by the end of fiscal year 2015­–16
and will use all of its mental health funding allocation in subsequent
fiscal years. Table 5 shows the accumulated balance of mental health
funding at Mt. Diablo and Murrieta Valley over time.
Table 5
Balance of Restricted Mental Health Funding at End of Fiscal Year for
Two Local Educational Agencies
FISCAL YEAR

MT. DIABLO UNIFIED SCHOOL DISTRICT

MURRIETA VALLEY UNIFIED SCHOOL DISTRICT

2010–11

$1,763,645

–

2011–12

1,354,870

$782,487

2012–13

150,002

1,090,433

2013–14

586,321

1,248,399

2014–15

504,650

1,347,929

Sources:  California State Auditor’s analysis of revenue and expenditure reports from Mt. Diablo
Unified School District and Murrieta Valley Unified School District for fiscal years 2010–11
through 2014–15.

Murrieta Valley has increased its balance of mental health funding
during the past several years, although the rate of increase has
recently tapered off. In contrast to Mt. Diablo, Murrieta Valley
has added to its balance of funding each fiscal year since 2011–12.
In recent years, the LEA has annually received about $1.4 million
in mental health funding, and its accumulated surplus as of
June 2015 is more than $1.3 million. According to the executive
director of special education at Murrieta Valley, the LEA took some
time to fully ramp up its mental health program after AB 114 took
effect. The LEA informed us that since it took over responsibility
for mental health services, the number of students it has assessed
as needing mental health services has increased, and because it
now has a history of budgets to better understand its mental health
costs, it will be better able to match its spending to its funding.

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LEAs may create an unnecessary hardship on their school districts’
budgets by spending other sources of funding while accumulating
a balance of mental health funding. Both Mt. Diablo and Murrieta
Valley informed us that they spent their special education or
unrestricted funds for some of their mental health services. As
discussed in the previous section, Mt. Diablo has spent about
$22 million of its special education funding to provide mental
health services. However, Mt. Diablo could have lessened the effect
on its overall special education program by spending its mental
health funding first before it resorted to other funding sources.
Additionally, Murrieta Valley did not track the expenditures for
mental health services that it made using its special education
funding or unrestricted funding. Consequently, Murrieta Valley
does not know the degree to which those mental health services
are affecting its ability to spend funds in other areas.
When we discussed LEA funding balances with representatives
at Education, they were not concerned about these balances
except under certain conditions. Education’s associate director
for special education stated that he would not be concerned
about an LEA maintaining a surplus of mental health funding
unless the LEA experienced a corresponding drop in service levels.
The associate director and his staff informed us that in fall 2013,
Education analyzed service levels at LEAs that had mental health
funding balances in fiscal years 2011–12 and 2012–13. However,
when they contacted these LEAs, they discovered that there
were multiple reasons for spending or service patterns, with no
consistent theme. Although it concluded that this area deserves
further inquiry, Education has not yet completed the protocol for
this type of monitoring activity. Because an accumulated balance
of funding could be an indicator that an LEA is not fulfilling its
obligations to provide mental health services to students, it is
important that Education regularly perform this monitoring activity
and follow up with LEAs that show both a balance of mental health
funding and a decline in mental health service levels to determine
whether accumulated balances are a cause for concern.
LEA and County Collaboration Could Allow LEAs to Access Medi‑Cal
Funding to Provide Additional Mental Health Services
As discussed in the Introduction, LEAs can access Medi‑Cal
funding through the LEA Medi‑Cal Billing Option program for
certain special education mental health services. In addition to
this program, one of the four LEAs we reviewed, Mt. Diablo, has
been able to access roughly $1.3 million in federal funding per year
through Medi‑Cal, along with other related funds it receives from
its county, to provide services over the past few years. Mt. Diablo’s
special education director informed us that her LEA contracted

Although it concluded that this area
deserves further inquiry, Education
has not yet completed the protocol
for this type of monitoring activity.

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with the county in order to become a provider of EPSDT services
to students and to receive EPSDT Medi‑Cal funding from the
county. As discussed in the Introduction, EPSDT is a program that
provides children under 21 who are eligible for full‑scope Medi‑Cal
with early detection and care, including mental health services, so
that health problems are averted or diagnosed and treated as early
as possible. Mt. Diablo’s agreement with Contra Costa County
provides it with an additional source of federal funding to pay
for mental health services for its Medi‑Cal‑eligible students. The
special education director at Long Beach and the executive director
of special education at Murrieta Valley stated that although they
used the LEA Medi‑Cal Billing Option program, they were unable
to reach an agreement with their respective counties to access
EPSDT funding. Because she had only been in her position since
July 2015, the special education director at East Side did not know
why her LEA had not pursued any Medi‑Cal funding.
Under state law, counties are responsible for providing certain
mental health services and can receive federal reimbursements
for these services by submitting claims through the California
Department of Health Care Services (Health Care Services).
Through the EPSDT program, the federal government provides
reimbursement for generally half of the allowable expenditures
for mental health services, and the State must provide the
other matching portion. Since legislation in 2011 authorized
the realignment of various programs, counties became responsible
for funding the entire state match for EPSDT mental health services
and may use a variety of funding sources to match it. County
mental health plans can choose whether to provide certain EPSDT
services directly or contract with outside service providers, which
could include LEAs. The counties that correspond to the LEAs
we visited informed us that prior to AB 114 they accessed EPSDT
funding to provide mental health services to Medi‑Cal‑eligible
students. However, because state law assigns counties responsibility
for providing certain mental health services and seeking
reimbursements, LEAs cannot access funding for those EPSDT
services unless they contract with their respective counties.
Collaboration between counties
and LEAs could improve access
to mental health services for all
Medi‑Cal-eligible students by
ensuring that all mental health
services for these students
are coordinated.

This type of collaboration between LEAs and counties could
improve access to mental health services for all Medi‑Cal‑eligible
students by ensuring that all mental health services for
these students are coordinated. LEAs are responsible for ensuring
that students receive the mental health services specified in their
IEPs, but counties are responsible for providing other mental
health services to students. If LEAs contract with counties as
mental health service providers, more Medi‑Cal‑eligible students
than just those in special education could receive a wider range
of EPSDT mental health services through their schools, including
both mental health services related to a student’s IEP and those

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that are not related. By providing a common access point for
some Medi‑Cal‑eligible students to receive certain mental health
services, responsibilities for services and coordination of care could
potentially be improved.
Although county collaboration with SELPAs or LEAs as
mental health service providers could improve student access
to mental health services by helping ensure coordination of
care, not all SELPAs or LEAs may be able to immediately
become mental health service providers. State law requires
county mental health plans to ensure that their contracted mental
health service providers meet certain requirements in order to
provide services. For example, the head of service must be a
licensed mental health professional or mental health rehabilitation
specialist. Because these professional requirements are different
from those that SELPA and LEA staff are required to possess
to provide related services under IDEA, these entities may not
currently have staff with the necessary qualifications to meet these
requirements. However, county guidance and assistance to SELPAs
and LEAs included as part of a contractual arrangement could
help ensure that these entities meet the requirements specified in
state law.
Contractual arrangements between counties and SELPAs could
also ensure that these entities are maximizing the amount of federal
funding to provide mental health services. In an October 2011
presentation hosted by Education related to the transition
to AB 114, the director of the Children’s Center at the Desert
Mountain SELPA (Desert Mountain) highlighted her SELPA’s
collaboration with San Bernardino County (San Bernardino)
as financially beneficial for both the SELPA and the county.
Specifically, the director stated that the SELPA contributes to the
county’s effort to match the federal reimbursements. Under this
arrangement, San Bernardino does not need to provide the full
amount of the federal match that the State expects local entities
to contribute, and Desert Mountain receives EPSDT funding that
it uses to provide mental health services to Medi‑Cal‑eligible
students with and without IEPs. According to financial information
provided by Desert Mountain SELPA, for fiscal year 2014–15, its
agreement with the county allowed it to access almost $4 million in
federal funds through Medi‑Cal. In the absence of this agreement,
the SELPA would need to find another source of revenue in order
to provide the same level of services. If California’s other SELPAs
established agreements with their county mental health plans,
these entities in total could potentially receive millions of dollars
in federal reimbursements for mental health services provided to
Medi‑Cal‑eligible children.

County guidance and assistance
included as part of a contractual
arrangement could help ensure
that SELPAs and LEAs meet the
requirements specified in state law.

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Other counties have also begun working with LEAs as mental
health service providers to allow them to access EPSDT funding.
We spoke with staff at the Riverside University Health System—
Behavioral Health, the former Riverside County Mental Health
Department, who informed us that they are currently collaborating
with one LEA, Palm Springs Unified School District, to allow it
to become a mental health service provider and access EPSDT
funding. They also stated that they are currently discussing
collaboration with Riverside for the SELPA to provide mental
health services and receive EPSDT funding. We also spoke with
the deputy director of Children’s System of Care at the Los Angeles
County Mental Health Department, who stated that although his
department conducted some outreach to LEAs after AB 114 took
effect to discuss collaboration, no SELPAs or LEAs contacted the
department to become specialty mental health service providers.
However, the deputy director informed us that his county has
contracts with the Los Angeles Unified School District and
Pasadena Unified School District that make these districts specialty
mental health service providers and allow the districts to access
EPSDT funding.
The LEA Mental Health Staff and the Contractors We Reviewed
Were Qualified, but LEAs Should Improve Some Hiring and
Contracting Practices
All of the LEA staff and contracted mental health providers we
reviewed met the minimum requirements in state regulations to
provide mental health services to students. However, the minimum
qualifications contained in the job descriptions for some positions
we reviewed at Mt. Diablo and Long Beach did not meet the
requirements in state regulations at the time we began our review.
Additionally, Mt. Diablo did not have a formal, written process
for verifying employee mental health licenses at the time of hire
or throughout employment. Finally, at each LEA we reviewed we
found that the LEA or its SELPA had not retained copies of all
contractor qualifications and therefore could not demonstrate that
it had verified its contractors’ qualifications.
Although the Staff We Reviewed Were Qualified Under State
Requirements, Some LEAs Could Improve Their Hiring Practices
State regulations require persons
providing mental health services in
a special education setting to hold
specific credentials or licenses based
on the type of service they provide.

State regulations require persons providing mental health services
in a special education setting to hold specific credentials or licenses
based on the type of service they provide. In general, the regulations
allow an individual to hold one of several different licenses or
credentials to meet the requirements for a specific type of mental
health service. For example, individuals who provide counseling

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and guidance services can meet the requirements by holding one of
six different types of licenses or credentials. The qualifications
required to provide mental health services range from licenses
that require higher levels of education and experience, such as a
marriage and family therapist license, to credentials that require
less education and experience, such as a pupil services credential.
To obtain a marriage and family therapist license, applicants must
complete an advanced degree and 3,000 hours of supervised
work experience. In contrast, to obtain a pupil services credential,
applicants generally must obtain a bachelor’s degree; complete some
postgraduate course work, including a practicum with school‑aged
children; and pass a state‑administered basic skills exam.
We judgmentally selected five staff members at each of the
four LEAs we reviewed and determined that all 20 individuals met
the requirements in state regulations for the mental health services
they provide to students. We interviewed the special education
director at each LEA to identify the mental health services those
staff provide to students and found that all staff possessed a license,
credential, or the education that permitted them to provide the
services the LEA special education director indicated they were
responsible for providing. Some LEA staff members were qualified
because of licenses, such as marriage and family therapist or clinical
social worker licenses, and others were qualified because of pupil
services credentials.
Although all staff members we reviewed met the minimum
requirements, not all of the LEAs we reviewed established
minimum qualifications for their mental health staff that would
ensure that staff members were properly qualified when hired. The
minimum qualifications for all positions we reviewed at East Side
and Murrieta Valley met the minimum qualifications outlined in
state regulations. However, this was not the case at Mt. Diablo and
Long Beach. Specifically, at Mt. Diablo the minimum qualifications
for the LEA’s behavioral health specialist positions allowed staff in
these positions to perform counseling and guidance services if they
were eligible for one of two mental health professional licenses.
However, state regulations require that individuals who provide
counseling and guidance be fully licensed or registered and under
the supervision of a license‑holder, which is different from being
license eligible. At Long Beach, the minimum qualifications for an
autism supervisor position do not require a license or credential,
and the minimum level of education required is a bachelor’s degree.
However, state regulations require all persons who design or plan
behavioral interventions, which this autism supervisor position
does, to possess at least a master’s degree if the individual is not
licensed or credentialed.

Not all of the LEAs we reviewed
established minimum qualifications
for their mental health staff that
would ensure that staff members
were properly qualified when hired.

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Both Mt. Diablo and Long Beach acknowledged that the minimum
qualifications for their positions did not meet the requirements
of state regulations. The special education director at Mt. Diablo
stated that the minimum requirements for the behavioral health
specialist positions we reviewed were outdated and that she would
never hire someone into these positions without a license. In
September 2015, after we discussed this issue with Mt. Diablo, it
updated the minimum requirements for the two behavioral health
specialist positions to comply with the requirements in state
regulations. At Long Beach, a personnel analyst acknowledged that
the minimum qualifications for the autism supervisor position do
not meet the requirements of the regulations but informed us that
no one has been hired into that position since the regulation that
established the minimum requirements took effect in July 2014.
The personnel analyst stated that Long Beach is in the process of
updating the minimum requirements for this position and that it
expects to be done with this process by January or February 2016.
Murrieta Valley, East Side, and Long Beach were able to
demonstrate that they verified that all selected staff members
possessed the required qualifications for their positions; however,
Mt. Diablo did not have formal, written procedures in place to
verify that staff had the licenses required for their position, both
at the time of hire and during the course of their employment. We
reviewed qualifications for five mental health staff at Mt. Diablo and
found that Mt. Diablo did not verify that one of these staff members
possessed a current, valid license at the time of hire. We also found
that Mt. Diablo did not verify that another staff member’s license
remained current during her employment. In both cases, there was
no direct negative effect on students because the staff members
held current, valid licenses at the time of hire and continue to
maintain their licenses. However, Mt. Diablo did not have a record
of current licensure for either employee.

Mt. Diablo’s lack of a formalized,
systematic process for ensuring
that mental health staff members
possess current, valid licenses
created a risk that unlicensed staff
members would provide mental
health services to students.

Mt. Diablo’s personnel director stated that the district has a process
to ensure that all licenses are verified before the date of hire. However,
this process was not documented, and the personnel director, who
was not in her position at the time this staff member was hired,
did not know how Mt. Diablo hired the staff member mentioned
previously without first verifying her license. Further, the personnel
director acknowledged that Mt. Diablo did not have a process to verify
that staff members keep their licenses current after they are hired.
Mt. Diablo’s lack of a formalized, systematic process for ensuring
that mental health staff members possess current, valid licenses at
the time of hire and during the course of their employment created a
risk that Mt. Diablo could have unlicensed staff members providing
mental health services to students. After we discussed this issue
with the personnel director, the Mt. Diablo personnel department
implemented a procedure for verifying staff licenses both at the

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January 2016

time of hire and during the course of employment. According to
the personnel director, Mt. Diablo has since reviewed personnel
records to verify that all employees requiring licenses have current,
valid licenses.
LEAs Generally Use Contractors to Provide Higher‑Level or Different
Services to Students, but Do Not Always Obtain Documentation of
Contractor Qualifications
The special education directors at the LEAs we reviewed indicated
that they typically use contractors to provide either higher‑level
mental health services or different types of mental health services
than LEA staff provide. As characterized by one special education
director, higher‑level services include services that are more intensive
or of longer duration than services provided by school psychologists.
Murrieta Valley and Mt. Diablo use contractors to provide higher
levels of services than those provided by LEA staff. According to the
executive director of special education at Murrieta Valley, after it
first attempts to address student needs using its staff, the LEA uses
contractors hired by its SELPA to provide services to students who
need a higher level of intervention. Similarly, the special education
director at Mt. Diablo stated that the contractors her LEA uses
provide a higher‑intensity level of service than her staff school
psychologists provide. The special education director at East Side
stated that the LEA uses contractors to provide different, but not
necessarily a higher level of services than East Side staff members
provide, such as behavioral intervention services. The LEA also uses
contractors to supplement its staff when the workload is high. Finally,
at Long Beach the special education director stated that contractors
are most often retained to provide the same types of services that
LEA staff provide when LEA staff members are not available,
although they also sometimes provide specialized services that
LEA staff members cannot provide, such as counseling for special
education students undergoing gender transformation.
We judgmentally selected five contracted personnel at each LEA
and determined that these contractors were qualified to provide
the specific types of mental health services received by students.9
We determined that each contracted individual possessed the
license, credential, or educational background that state regulations
required to provide the mental health services that the LEA or
SELPA special education director indicated they provided. In some
cases, this meant that the contractor held a bachelor’s degree, which
exceeded the minimum education required for certain services,
9 

For Murrieta Valley, we reviewed contractors hired by its SELPA office, Riverside, because,
according to the special education director at Murrieta Valley, the LEA does not hire its own
contractors but instead uses those hired by its SELPA.

LEAs typically use contractors to
provide either higher‑level mental
health services or different types
of mental health services than LEA
staff provide.

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such as implementing a behavior intervention plan, while in other
cases the contractor possessed a marriage and family therapy
license, permitting the individual to provide a variety of services,
including psychological services and counseling and guidance.
We noted that the contracted personnel we reviewed maintained
licenses that require higher levels of education and experience more
often than LEA staff did. Our selection of both staff and contractors
was not a statistical sample, and therefore our comparison of
the qualifications cannot be projected to all staff and contractors
at the LEAs we reviewed. Nevertheless, 13 of the 20 contracted
personnel we reviewed held a mental health professional license
or license internship, whereas only five of the 20 LEA staff we
reviewed held licenses or license internships that qualified them
to provide mental health services. The remainder were qualified to
provide the particular mental health service because of a credential
or education status.
Despite using contractors to
provide mental health services
to special education students,
the LEAs did not always maintain
documentation of the qualifications
of the contractor personnel who
served their students.

Despite using contractors to provide mental health services to
special education students, the LEAs we visited did not always
maintain documentation of the qualifications of the contracted
personnel who served their students. State regulations require
contractors to provide LEAs with copies of qualified personnel’s
credentials or licenses that allow them to perform the services they
provide. However, East Side, Mt. Diablo, and Long Beach did not
have contractor qualifications on file for any of the contractors
we selected for review when we began our work in June 2015.
At Murrieta Valley, we reviewed contractor qualifications from
three of its SELPA’s contractors. The SELPA had lists of the
contractor’s mental health personnel for all three contractors and
copies of licenses and credentials for two of the contractors,
which they were able to provide upon request. The executive
director at Riverside stated that the SELPA does not have copies
of licenses and credentials for the third contractor because that
contractor has multiple sites with a central location that maintains
copies of personnel qualifications, which she can easily access.
She indicated that the SELPA retains copies of most contracted
personnel’s qualifications to ensure that they are qualified to
provide the services they offer, and that Riverside would be willing
to implement a policy to retain copies of credentials and licenses for
all contractors. After our conversation with the executive director
about this issue, Riverside provided us with a copy of a spreadsheet
it stated it would use to track the receipt of copies of contracted
personnel’s qualifications.
By not having copies of qualifications on hand, the LEAs we
reviewed cannot demonstrate that they have ensured that the
individuals their contractors hired to serve their students are
qualified. After we requested evidence their contracted personnel

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were qualified, all entities we reviewed were able to obtain this
evidence from their contractors. When asked about their processes
for verifying that contracted personnel are qualified, the special
education directors stated that it is the contractor’s responsibility
to hire qualified individuals. While it is true that contractors are
required to demonstrate that their personnel are qualified, it is
important that LEAs hold their contractors accountable for doing
so. After we discussed this concern with the special education
director at Mt. Diablo, it implemented a practice requiring
contractors to provide Mt. Diablo with personnel lists and copies
of their credentials and licenses. The director of special education
at East Side informed us that her LEA would retain contractor
qualifications in the future. In contrast, the director at Long Beach
agreed with the concept of retaining contractor qualifications but
stated that it is not legally required to maintain such files and does
not currently have the personnel to do so.
Education does not believe that LEAs should be required to retain
copies of contractor qualifications. According to Education’s
director of special education, LEAs should receive and review
contractor personnel lists, verify that contractors have valid
credentials or licenses for each of the individuals on the lists, and
ensure that the contracted personnel on the lists are qualified
to provide the services they provide to the LEA by checking
their credentials and licenses against the minimum qualification
requirements established in state regulations. However, he stated
that after this process is complete, LEAs should not be required to
retain the personnel lists, credentials, or licenses, because such a
requirement would be overly burdensome and the information is
available through other sources, such as the agencies responsible for
issuing licenses and credentials. We believe the benefit of retaining
contractor qualifications outweighs any potential burden on the
LEAs because it would allow LEAs to defend the use of specific
contracted personnel. This would be especially important in cases
in which the LEA staff receive an inquiry from members of IEP
teams, such as parents or other interested parties that are not those
involved in the initial review of the contractor qualifications.
LEAs and SELPAs Have Developed Child Find Processes That Meet
Legal Requirements and Incorporate Best Practices
A recent health care study indicates that more children in the
State suffer from a severe emotional disturbance than the number
of students receiving mental health services in special education.
In 2013 the California HealthCare Foundation (foundation)
issued a report in which it stated that 7.6 percent of children
in California suffer from a severe emotional disturbance. Using
this information and 2013 population projections from the 2010

Education does not believe that
LEAs should be required to retain
copies of contractor qualifications.

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census, we calculated that, according to the foundation’s estimate,
approximately 700,000 children in the State suffer from a severe
emotional disturbance. Using data obtained from Education’s
California Special Education Management Information System
(CASEMIS), we found that between more than 104,000 and
120,000 students in California received mental health services in
an IEP for the period from July 2010 through June 2015.
LEAs are not required to provide mental health services for all
children as part of an IEP. Instead, LEAs are required to locate and
evaluate students with disabilities to determine their needs,
and then provide special education and related services including
mental health services to those students with disabilities who
require the services to receive a free and
appropriate public education. Therefore, not
all students who have a disability, such as an
State and Federal Legal Requirements
emotional disturbance, will qualify for special
and Best Practices for Child Find
education or related services, including mental
health services. However, we believe that this
Federal legal requirements
factor alone appears insufficient to explain why
•  Develop policies and procedures to identify, locate, and
such a wide gap exists between the number of
evaluate all children with disabilities residing in the state
students the foundation’s estimate suggests
who need special education and related services.
struggle with a severe emotional disturbance and
State legal requirements
the number of students receiving a mental health
•  Each special education local plan area shall establish
service through an IEP. Therefore, it is important
written child find policies and procedures for use by its local
that Education investigate whether California is
educational agencies (LEAs).
providing special education and related services to
•  Child find policies and procedures must reach students
all eligible students.
attending private school.

•  Child find policies and procedures must reach homeless
children and wards of the state.
Best practices
•  Child find outreach should include the following:
–  General untargeted public awareness.
–  Outreach to parents.
–  Communication with referral personnel and agencies,
such as physicians’ offices and daycare facilities.
•  LEAs should do the following:
–  Educate general education staff on child find,
identification, and the referral process.
–  Use universal screening.
Sources:  Title 34 Code of Federal Regulations, Part 300.111;
California Education Code, Section 56301; Arkansas and Arizona
Department of Education websites; and various online articles
and research publications by education advocates.

To identify children who may benefit from special
education, federal and state law require the State
and LEAs to develop policies and procedures
known as child find. Each of the four SELPAs we
visited has developed policies and procedures
for child find, and the LEAs we reviewed have
adopted the policies and procedures of their
respective SELPAs. The four LEAs we reviewed
had child find policies and procedures that met
legal requirements and included best practices
that we identified, as shown in the text box. The
LEAs also provided documentation illustrating
how they generally performed the steps or actions
included in their child find procedures. As a
result, we believe LEAs are well positioned to
identify children with mental health needs who
may qualify for special education and related
mental health services.

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LEAs Properly Notified Parents of Complaint Options, and Education
Addressed Parents’ Complaints
Education and LEAs are required to provide parents with procedural
safeguards—sometimes referred to as educational rights under
IDEA—that include information on filing complaints to address
parents’ concerns regarding their child’s education. IDEA requires
Education and LEAs to establish and maintain procedures to ensure
that students with disabilities and their parents are guaranteed
their procedural safeguards. Among other things, the procedural
safeguards must include information about the opportunity for
any party to present a complaint with respect to the identification,
evaluation, or educational placement of the student or the provision
of a free and appropriate public education. The ability to present
a complaint regarding their students’ services enables parents to
address concerns they may have regarding their children’s education.
LEAs are required to inform parents of these rights in specific
instances, such as at each IEP meeting, but at least annually.
The four LEAs we visited use various methods to notify parents of
their complaint resolution options, as required by law. For instance,
we found that LEAs informed parents of their complaint resolution
options through the procedural safeguard notice at IEP meetings.
By presenting this notice, LEAs ensure that at least annually parents
are reminded of their complaint resolution options. SELPAs and
LEAs also made complaint resolution information available through
their websites and presented the information at their community
advisory committee meetings or included it within the committees’
parent handbooks. The presentation of complaint resolution
options to parents through these means provides assurance
that parents are made aware of their ability to address concerns
regarding their children’s education.
To resolve parents’ complaints, Education has developed systems
and procedures that meet federal and state requirements. Federal
law requires Education to provide due process complaint and
mediation systems, and federal regulations require it to provide
a state complaint system. Education satisfies the requirement to
provide due process complaint and mediation systems by contracting
with the Office of Administrative Hearings (Administrative Hearings)
for the provision of due process hearings and mediations. Due
process hearings and mediations primarily address disputes between
parents and LEAs regarding the determination of a student’s special
education needs and placement. Education fulfills the requirement
to provide a state complaint system by having its staff investigate
compliance complaints—complaints alleging that an LEA has not
adhered to specific IDEA requirements, such as failing to hold an

59

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California State Auditor Report 2015-112

January 2016

Selected State and Federal Compliance, Due
Process, and Mediation Complaint Requirements
Compliance Complaints
•  Allegations should be confirmed with the complainant.
•  A notice of the complaint should be sent to all parties.
•  The investigator should send a request for information
to the local educational agency (LEA).
•  The resulting written decision should address
each allegation.
•  The investigation report should include, among
other things—a summary of the allegations, California
Department of Education conclusions, and LEA
required actions.
•  The report should be mailed to complainants within
60 days of receipt of complaint.
Due Process Complaints
•  All parties must be notified of the hearing request and the
scheduled date for the hearing.
•  A list of free and reduced‑cost representatives must be
included in the hearing notice.
•  The LEA is provided 30 days to resolve the complaint to the
satisfaction of the parents before the hearing occurs.
•  Final decision must be mailed to each party within
45 calendar days after the expiration of the 30 day period.*
Mediation Complaints
•  All parties must be notified of the request and the
scheduled date for the mediation.
•  Each session in the process must be scheduled in a timely
manner and must be held in a location that is convenient to
the parties to the dispute.
•  If a resolution is reached, the parties shall execute a legally
binding agreement.
Sources:  Title 20 United States Code section 1415; Title 34
Code of Federal Regulations sections 300.152 and 300.515;
Title 5 California Code of Regulations sections 4660, 4662, and 4664;
California Education Code sections 5600.3 and 56043; California
Department of Education complaint investigation procedures;
and Office of Administrative Hearings mediation and due process
request procedures.
*  Extensions may be granted.

IEP team meeting within 30 days of a parent’s
request. Additionally, state and federal laws and
regulations specify procedural requirements that
must be adhered to while resolving complaints.
We reviewed a total of 20 compliance complaints,
six due process complaints, and two mediation
complaints pertaining to the LEAs at the
four SELPAs we visited that were submitted
during the period from July 2012 through
June 2015. We found that Education and
Administrative Hearings followed their respective
procedures and met the relevant state and federal
requirements shown in the text box. Because
Education and Administrative Hearings are
providing these services and processing
complaints appropriately, parents are able to
address concerns they may have regarding their
students’ free and appropriate public education.
Recommendations
Legislature
The Legislature should amend state law to require
counties to enter into agreements with SELPAs
to allow SELPAs and their LEAs to access EPSDT
funding through the county mental health plans
by providing EPSDT mental health services. If
individual counties can demonstrate good reason
why this type of arrangement is not possible
or beneficial, the amended law should allow
the counties to opt out of the collaboration by
seeking a time‑limited waiver from Health Care
Services. The Legislature should require Health
Care Services to make a final determination as
to whether counties will be allowed to opt out of
the required collaboration. The Legislature should
require counties seeking a waiver to specify
what barriers exist to working with SELPAs and
their LEAs and how the county is attempting to
remove those barriers.

 California State Auditor Report 2015-112

January 2016

Entities We Reviewed
To ensure that the State knows the amount LEAs spend to provide
mental health services for student IEPs, before the start of the
2017–18 fiscal year, Education should develop, and require all
LEAs to follow, an accounting methodology to track and report
expenditures related to special education mental health services.
To ensure that LEAs provide mental health services as required,
Education should, on an annual basis, identify LEAs with
accumulated balances of mental health funding and analyze
whether the LEA has had a corresponding drop in mental health
service levels. For all LEAs that Education determines have both
an accumulated balance and a corresponding drop in services,
Education should follow up with the LEA to determine whether the
LEA is meeting its obligations to provide mental health services to
students as part of the special education program.
To ensure that all staff it hires are qualified to provide mental health
services, Long Beach should update its minimum qualifications
for the autism supervisor position to comply with state regulatory
requirements no later than March 2016.
To ensure that the licensed staff it hires are qualified at the time of
hire and throughout their employment, Mt. Diablo should follow
its formal procedures to ensure that staff possess required licenses
when hired and that their licenses remain current while employed.
To ensure that they can demonstrate that the contracted personnel
who provide mental health services are qualified, the LEAs
and SELPAs we reviewed that hold contracts for mental health
services should annually obtain and retain copies of contractor
personnel lists and the credentials or licenses for personnel
who provide mental health services to students in the LEA or
SELPA. Further, Education should require all LEAs and SELPAs
that hold such contracts to annually obtain and retain copies
of contractor personnel lists and the credentials or licenses for
contractor personnel who provide mental health services to
students in their respective LEA or SELPA.
To ensure that the State provides special education and related
services to all eligible students, Education should investigate the
difference between the estimated number of school aged children
statewide who have a severe emotional disturbance and the number
receiving mental health services through an IEP and determine the
reason for such a discrepancy. Education should then take any steps
necessary to assist LEAs in identifying and providing services to
children who are severely emotionally disturbed.

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California State Auditor Report 2015-112

January 2016

We conducted this audit under the authority vested in the California State Auditor by Section 8543
et seq. of the California Government Code and according to generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives
specified in the Scope and Methodology section of the report. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.
Respectfully submitted,

ELAINE M. HOWLE, CPA
State Auditor
Date: 

January 19, 2016

Staff: 
 
 
 
 
 
 
 
 

Linus Li, CPA, CIA, Audit Principal
Vance W. Cable
Bob Harris, MPP
Jim Adams, MPP
Brian D. Boone, CIA, CFE
Nisha Chandra
Matthew Hayes
Sean D. McCobb, MBA
Amanda Millen, MBA

Legal Counsel: 

Joseph L. Porche, Staff Counsel

IT Audit Support:  Michelle J. Baur, CISA, Audit Principal
Ben Ward, CISA, ACDA
Richard W. Fry, MPA, ACDA
For questions regarding the contents of this report, please contact
Margarita Fernández, Chief of Public Affairs, at 916.445.0255.

 California State Auditor Report 2015-112

January 2016

Appendix
INFORMATION RELATED TO THE NUMBER OF STUDENTS
SERVED WHO ARE EMOTIONALLY DISTURBED AND ELIGIBLE
FOR THE CALIFORNIA MEDICAL ASSISTANCE PROGRAM
The Joint Legislative Audit Committee requested that we
determine the number of students during the five‑year audit
period, from school year 2010–11 through 2014–15, at each of the
four selected special education local plan areas (SELPAs) who
had a mental health service in their individualized education
program (IEP) and report the number of students who are and
are not identified as emotionally disturbed and who do or do not
qualify for California Medical Assistance Program (Medi‑Cal)
services.10 Student IEPs can indicate both a primary and a
secondary disability that contributes to the student’s eligibility
for special education and related services. To count emotionally
disturbed students, we identified students whose IEPs indicated
that either the primary or the secondary disability was an emotional
disturbance. We considered students eligible for Medi‑Cal if the
student was eligible for mental health services under Medi‑Cal in
the same year in which the student had mental health services in his
or her IEP. Table A shows a summary of these data for each of the
four SELPAs we reviewed.
Table A
Number of Students by Special Education Local Plan Area With a Mental Health Service in Their Individualized
Education Program by Category of California Medical Assistance Program Eligibility and Emotional
Disturbance Disability
SPECIAL EDUCATION
LOCAL PLAN AREA

Mt. Diablo Unified
School District

Total students

CALIFORNIA MEDICAL
ASSISTANCE PROGRAM
(MEDI‑CAL) ELIGIBLE

SCHOOL YEAR
EMOTIONAL
DISTURBANCE DISABILITY

2010–11

2011–12

2012–13

2013–14

2014–15

157

136

120

112






130

5

169

190

199

239

239

5



172

155

110

109

106

5

5

277

274

271

264

288

748

776

716

732

745

continued on next page . . .

10 

The focus of the audit was on students who were potentially affected by Assembly Bill 114,
namely those receiving mental health services. Accordingly, the numbers we present do not
include students who were identified as emotionally disturbed but did not have a mental health
service in their IEP.

63

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California State Auditor Report 2015-112

January 2016

SPECIAL EDUCATION
LOCAL PLAN AREA

Long Beach Unified
School District

MEDI‑CAL ELIGIBLE

EMOTIONAL
DISTURBANCE DISABILITY

Total students

2012–13

2013–14

2014–15



287

306

288

241

174

5

228

355

344

362

340

5



131

146

124

132

98

5

5

207

294

262

261

243

853

1,101

1,018

996

855






211

232

429

524

585

5

324

348

677

956

1,185

5



249

293

386

377

392

5

5

477

508

686

780

984

1,261

1,381

2,178

2,637

3,146

Total students
South East
Consortium for
Special Education

2011–12




Total students
Riverside County
Special Education
Local Plan Area

SCHOOL YEAR
2010–11






136

175

195

232

255

5

307

333

357

376

406

5



128

158

157

166

201

5

5

420

447

403

419

450

991

1,113

1,112

1,193

1,312

Sources:  California State Auditor’s analysis of data obtained from the California Department of Education’s California Special Education Management
Information System and data obtained from the California Department of Health Care Services’ Fiscal‑Intermediary Access to Medi‑Cal Eligibility system.

 = Yes
5 = No

 California State Auditor Report 2015-112

65

January 2016

*

1

*  California State Auditor’s comments begin on page 73.

 66

California State Auditor Report 2015-1 12
January 2016

Elaine M. Howie, State Auditor
December ?15, 2015
Page 2

Although LEAs report data to Education on all students in special education. including
those students receiving mental health services as part of their Individualized Education
Program (IEP), Education does not and is not required by state or federal law to
calculate performance andior outcome measures for any particular subgroup of special
education students. Therefore, if the Legislature requires Education to compile the
additional reports within the specified timeline, additional funding would be required to
support the increase in staff resources necessary for disaggregating data to distinguish
students in special education receiving mental health services, and analyzing that data
for each of the identified six key areas.

Education also does not concur with this recommendation which specifies that the
Legislature require Education to provide comments on any trends identi?ed when
compiling the requested data and stipulate actions Education would take to improve
outcomes for students in special education who receive mental health services.

Commenting on any trends that are identified in comparing the requested data from
year to year and proposing action to improve outcomes assumes that, from the
aggregate data, Education would be able to accurately pinpoint underlying issues
associated with a lack of progress toward the statewide target in the six key areas for
these students. Although analyzing aggregate data to ascertain general trends in
outcomes for students in special education who are also receiving mental health
services may be a useful endeavor for informational purposes, the data does not
provide the level of detail necessary for Education to extrapolate a root cause of poor
performance on statewide targets. Therefore, Education?s conclusions on various trends
and proposed actions for improvement would only be speculation because student
outcomes can be affected by a vast array of variables, many related to individualized
circumstances for each student, which are not represented by the aggregate data
Education collects. Consequently, Education is concerned that implementing this
recommendation could result in drawing erroneous, misleading conclusions that are not
appropriately anchored in germane. indicative data.

Chapter 1 Recommendation No. 2:

To ensure that all LEAs comply with federal special education requirements, Education
should require them to include reasons for any changes to student placement or
services directly in a student's document.

Education?s Comments and Corrective Actions

Education does not concur with this recommendation. Although the JDEA requires LEAs
to provide "prior written notice," or PWN, when proposing or refusing to initiate or

California State Auditor Report 2015-112 67
January 2016

Elaine M. Howie, State Auditor
December 15, 2015
Page 3

change the identification, evaluation, or educational placement of the child or the
provision of a free, appropriate public education to a child; required elements of the IEP
do not include documenting the reason why an IEP service level or placement
changed.

In addition, the IDEA mandates that states minimize the number of state rules,

regulations, and policies to which LEAs are subjected, and report to LEAs and the

USDOE on any state rules, regulations or policies that constitute "State-imposed

requirements? not required by the IDEA. Furthermore, state mandates that exceed 
federal IDEA requirements may result in LEAs seeking reimbursement from the state.

Chapter 1 - Recommendation No. 3:

To enable it to review additional areas of its special education program for quality
assurance, Education should collect information about the frequency of the provision of
each service contained in all students' IEPs. Education should then use this information
to annually review the frequency of mental health services and follow up with SELPAs
when it observes a significant reduction in the frequency of services.

Education's Comments and Corrective Actions

Education does not concur with this recommendation. Education questions the value of 
collecting data on the frequency of provision of mental health services and analyzing

aggregate results to identify LEAs for follow-up. Given that decisions on the type and

frequency of services students receive are made by IEP teams for individual students,

and that individual student populations and student needs change regularly. changes in

type and frequency of services are to be expected.

Education does, however, concur with the auditor's report that aggregated results ?allow
for limited conclusions of how students were affected by AB 114." Similarly, aggregated
frequency data, drawn from thousands of discrete IEP team decisions concerning
individual students, provide little insight on the relative effectiveness of any LEA's IEP
development process or service delivery system.

Nevertheless, should the Legislature determine that Ed ucation?s collection of frequency
data on mental health services would be of benefit to the state, Education would need
additional rescurces to develop calculation methodologies, provide training and
technical assistance to LEAs, and to review and validate data. In addition, it would be
necessary for Education to develop procedures for LEAs regarding; (1) submittal of data
reports; (2) completion of aggregation and analysis tasks necessary to review changes



68

California State Auditor Report 2015-1 12
January 2016

Elaine M. Howie. State Auditor
December 15, 2015
Page 4

in frequency of services; and (3) identification of LEAs experiencing significant
reductions in frequency of services.

Chapter 1 - Recommendation No. 4:

To ensure that LEAs comply with federal requirements. Education should require all
LEAs to use the IEP document to communicate the rationale for residential treatment
and any potential harmful effects of such placement.

Education?s Comments and Corrective Actions

Education does not concur with this recommendation due to concerns for exceeding
federal requirements. Specifically, the IDEA contains a detailed description of the
federally required elements of the these required elements do not include
documenting the rationale for residential treatment.

OSEP commentary on the LRE regulations states that, consistent with the PWN
requirement in 34 C.F.R. 300.503, parents must be "informed" ofthe placement options
that were actually considered and the reasons why those options were rejected (71
Federal Register 46588 (August 14. 2008)). Under federal law an LEA can choose, but
is not required to provide its PWN regarding any change of placement in the IEP
document itself. Furthermore, as stated by OSEP. "There is nothing in the Act that
requires a detailed explanation in children's IEPs of why their educational needs or
educational placements cannot be met in the location the parents request? (7'1 Federal
Register 46588).

State law does require that the IEP document the rationale for placement in other than
the pupil?s school and classroom in which the pupil would attend if the pupil were not
disabled.

Chapter 1 - Recommendation No. 5:

Education should analyze and report to the Legislature, by May 30, 2016. on the
outcomes for students receiving mental health services statewide, including outcomes
across the six performance indicators we identified, in order to demonstrate whether
those services are effective. Once it has reported this statewide information, Education
should provide each LEA throughout the State a report regarding the outcomes for the
students the LEA served.

California State Auditor Report 2015-112 69

 

January 2016
Elaine M. Howle, State Auditor
December 15, 2015
Page 5
Education?s Comments and Corrective Actions
Education does not concur with this recommendation. Education is concerned that 

statewide data on outcomes for students in special education receiving mental health
services in the identified six performance indicators may erroneously measure the
effectiveness of the mental health services received by those students.

Student performance on the six performance indicators identified by the CSA relies on

numerous factors related to each individual student's circumstances. This level of detail

is not captured in the aggregate data received by Education. For example. if an LEA

does not meet the statewide target for graduation rate for students in special education

receiving mental health services, Education cannot conclude with any certainty that the 
deficient percentage is due to those students receiving ineffective mental health

services.

Furthermore, the effectiveness or appropriateness of mental health services is only one

of many factors that may impact whether or not a student graduates or otherwise

progresses. Students in special education often receive an array of related services; it

would be inapprOpriate to attribute such significance and causality to one particular

group of services they receive based on aggregate statewide data andlor aggregate

LEA level data. Although the aggregate data Education collects can be useful for

identifying general trends in student outcomes and for prompting LEAs to examine their
programs in certain areas, this data should not be used to determine the effectiveness 
of mental health services provided across the state.

Chapter 2 - Recommendation No. 1:

To ensure that the State knows the amount LEAs spend to provide mental health
services for student before the start of the 2017-18 fiscal year, Education should
develop, and require all LEAs to follow, an accounting methodology to track and report
expenditures related to special education mental health services.

Education's Comments and Corrective Actions

Education does not concur with this recommendation. Education is concerned that, (1)
establishing new codes to track mental health costs could result in Education losing

other information that it currently collects; and (2) additional burden or costs that LEAs

may incur to track expenditures to this level of specificity could outweigh the perceived

benefits of having this information.

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California State Auditor Report 2015-1 12
January 2016

Elaine M. Howie, State Auditor
December 15, 2015
Page 6

Chapter 2 - Recommendation No. 2:

To ensure that LEAs provide mental health services as required, Education should. on
an annual basis, identify LEAs with accumulated balances of mental health funding and
analyze whether the LEA has had a corresponding drop in mental health service levels.
For all LEAs that Education determines have both an accumulated balance and a
corresponding drop in services, Education should follow up with the LEA to determine
whether the LEA is meeting its obligations to provide mental health services to students
as part of the special education program.

Education?s Comments and Corrective Actions

Education concurs with this recommendation. Education will continue to develop and
implement monitoring processes to identify LEAs with accumulated balances of mental
health funding and to determine whether LEAs have incurred an annual decrease in
mental health service levels.

Chapter 2 - Recommendation No. 3:

Education should require all LEAs and SELPAs that hold contracts for mental health
service providers to annually obtain and retain copies of contractor personnel lists and
the credentials or licenses for contractor personnel who provide mental health services
to students in their respective LEA or SELPA.

Education?s Comments and Corrective Actions

Education concurs with this recommendation. Education's certification process includes
a review of staff background checks and personnel qualifications for staff employed by
nonpublic schools and nonpublic agencies through current certification processes.
Requiring LEAs to maintain their own records of contractor qualifications would provide
assurance that contractors not holding nonpublic school or nonpublic agency
certification are appropriately qualified to provide services for which they are contracted.

Chapter 2 - Recommendation No. 4:

To ensure that the State provides special education and related services to all eligible
students, Education should investigate the difference between the estimated number of
school aged children statewide who have a severe emotional disturbance and the
number receiving mental health services through an IEP and determine the reason for
such a discrepancy. Education should then take any steps necessary to assist LEAs in
identifying and providing services to children who are severely emotionally disturbed.

California State Auditor Report 2015-112
January 2016

Elaine M. Howie, State Auditor
December ?15, 2015
Page 7'

Education?s Comments and Corrective Actions

Education does not concur with this recommendation. Based on the current required
data, Education cannot determine what percentage of students receive mental health
services overall from all sources in the community. it is not clear what percentage of
students may have experienced a short-term emotional disturbance, perhaps resulting
from a traumatic event, which may or may not qualify a student for special education
services. Therefore, additional information would be needed such as the type, duration,
and extent of cases involved in the estimated population.

For example, Education found no detail concerning the California HealthCare
Foundation's estimate that 7.6% of California children suffer from a severe emotional
disturbance. Without such information it is dif?cult to determine what percentage of
those children have a disability and, because of that disability, need special education
and related services to enable them to receive a free, appropriate public education
(FAPE). More information would be needed concerning the basis of the 16% estimate,
including the type, duration, and extent of cases involved in the estimated population.

This 7.6% estimate is not substantiated by data from the Desert Mountain SELPA,
which is one of the SELPAs widely considered as having the broadest base of mental
health services. The Desert Mountain SELPA is the primary mental health service
provider in its geographic area of San Bernardino County. It is the primary contractor for
the San Bernardino Mental Health Plan in the Mojave Desert area. it serves all students
eligible for mental health services, notjust those with IEPs. In 2014-15, the Desert
Mountain SELPA reported providing mental health services to 6,578 students. They also
reported serving 116,?13 students in general education. This generates a percentage of
only 5.6 percent. But this is an over?generalized statistic. It is important to note that of
the 6,578 students receiving mental health services, 1,728 were students with 
Clearly, not all students requiring mental health services are considered eligible for
special education and related services. Further, the Desert Mountain SELPA serves a
total of 13,352 students with IEPs. In their experience, approximately 12.9 percent of
students with lEPs receive mental health services. Applying that percentage to a
statewide population of 717,961, results in an estimate of 92,918 students receiving IEP
based mental health services. This is consistent with the 93,485 students with lEPs
reported receiving mental health services statewide in December 2014.

Education currently takes steps to ensure that LEAs provide special education and
related services to all eligible students. Education monitors LEAs for effective policies
and procedures through comprehensive LEA monitoring processes. in instances in
which Education finds local procedures lacking, Education requires corrective action

71

72 California State Auditor Report 2015-1 12
January 2016

Elaine M. Howie, State Auditor
December 15, 2015
Page 8

and provides technical assistance. These measures are effective as the auditors
reported that the LEAs reviewed are successfully fulfilling Child Find requirements.

If you have any questions regarding Education's comments or corrective actions, please
contact Chris Drouin, Interim Director, Special Education Division, by e?mail at
cdrouin?cde.ca.eov. or by phone at 916-445?4602.

Sincerely,

Michelle Zumot

Chief Deputy Superintendent of Public Instruction



California State Auditor Report 2015-112

January 2016

Comments
CALIFORNIA STATE AUDITOR’S COMMENTS ON THE
RESPONSE FROM THE CALIFORNIA DEPARTMENT
OF EDUCATION
To provide clarity and perspective, we are commenting on the
California Department of Education’s (Education) response to our
audit. The numbers below correspond to the numbers we have
placed in the margin of Education’s response.
The page numbers on Education’s redacted draft copy of the audit
report do not correspond to the page numbers of the final
audit report. The content Education refers to appears on page 38
of this report.

1

We did not perform an analysis of the level of staff that Education
might require to fulfill our recommendation. Although we briefed
Education multiple times on the issues we identified during
the audit, Education did not present us with any information
demonstrating that its existing resources would be insufficient
to implement this recommendation. Accordingly, we cannot
verify the accuracy of Education’s claim that, to comply with our
recommendation, it would need additional resources.

2

We disagree that Education would find itself limited to speculation
when reporting to the Legislature about year-to-year trends in
the outcome data for students receiving mental health services.
If Education were to complete the analysis we describe in our
recommendation, it would compare the outcomes for students who
receive mental health services to outcomes for students who do
not receive mental health services. This would allow Education to
determine whether the students receiving mental health services
are substantially different from the rest of the special education
population with regard to outcomes. If this is not the case,
Education could comment that this particular subgroup of students
does not appear to be performing any better or worse than the rest
of their special education peers. Conversely, if Education’s analysis
showed that the students who receive mental health services were
substantially different in their outcomes, Education could comment
that the students were performing better or worse than their special
education peers and, if worse, suggest the need for additional
assistance and the type of assistance to be provided to the group
of students with lower outcomes. This analysis could also enable
Education to create a baseline for specific cohorts of students
receiving mental health services and track their progress.

3

73

 74

California State Auditor Report 2015-112

January 2016

4

Local educational agencies (LEAs) are already required to
document their reasons for changing special education and related
services or a student’s educational placement. Our recommendation
would result in additional direction from Education about the
specific document that LEAs must use to record that information.
We question whether further direction to LEAs about the specific
document they must use to meet existing requirements would
increase costs.

5

On page 31 of our report, we present an example of the potential
benefit that an analysis of aggregate service frequency data could
provide in assisting Education to oversee how effectively LEAs
provide mental health services. As we explain on that page,
Education could use this aggregate data to compare the frequency
with which LEAs offer specific services from one year to the next.
If Education observed a significant reduction in the frequency with
which a LEA offered a specific service, it could then follow up with
the LEA to determine the reason why services are being offered less
frequently to its student population. We believe that this analysis
would be of value because it could assist Education in detecting
whether LEAs are systematically reducing the frequency of their
services, a potential indicator that the LEA is not providing access
to a free and appropriate education to its students.

6

Education uses our report language out of context and
mischaracterizes our conclusion with regard to aggregate data. For
the reasons discussed on pages 19 through 22, our conclusion on
page 23 that aggregate data offered us the ability to reach limited
conclusions was with respect to whether a change in state law had
negatively affected individual students. This is separate and distinct
from whether or not aggregate data could be useful to Education in
improving its oversight activities.

7

We did not direct this recommendation to the Legislature. We
believe that Education should implement this recommendation
and that it can and should do so without waiting for direction from
the Legislature.

8

It is not clear to us why Education is concerned about exceeding
federal requirements. As we indicate in our report on page 36, state
regulations already require IEP teams to document their rationale
for an educational placement in a setting other than the setting
that the student would otherwise attend if he or she did not have a
disability. Further, as we note on page 37, federal regulations require
that when selecting the least restrictive environment for a student,
LEAs must consider the potential harmful effects of the placement.
As both requirements already exist, we believe that further
direction about where to record each of these elements would not
be particularly burdensome. In fact, all four special education local

 California State Auditor Report 2015-112

January 2016

plan areas that we reviewed as part of this audit agreed with similar
recommendations we made to them and indicated that they would
be implementing those recommendations.
The example that Education cites is a very narrow analysis, which
it appears to use to argue that it would not be able to reach
conclusions about the effectiveness of LEA mental health services.
If Education were to complete an analysis similar to the analysis
proposed in our legislative recommendation on page 41, wherein it
compared the students receiving mental health services to special
education students not receiving those services, Education could
then reach conclusions about the effectiveness of these services.
Because the only factor that would separate these two student
groups would be the fact that they did or did not receive mental
health services, any meaningful difference in the performance of
these two groups could be attributed to the effectiveness of mental
health services. As we detail in our third comment on page 73,
Education could track the progress of specific cohorts of students
receiving mental health services by creating a baseline that would
further enable it to conclude on the effectiveness of those services.

9

We acknowledge Education’s concerns on page 46 of our report.
However, as we state on that page, we believe that despite
the challenges Education might face in implementing this
recommendation, it is critical that Education be able to provide
this information to the Legislature and the public. By doing so,
Education would benefit the Legislature and the public by being
able to report on whether the State is cost effective in providing
mental health services to students with IEPs. As we note on
page 45, this information would be valuable to future policy and
funding discussions about the special education program.

10

Education is again interpreting our recommendation too narrowly.
Whether or not students receive mental health services from other
sources in their community is not relevant to whether or not the
students should be receiving mental health services through an IEP.
Further, although on page 57 of our report we cite an estimate from
the California HealthCare Foundation, this is not the only available
estimate of the percentage of school aged children in California who
struggle with mental health related problems. We shared this fact
with Education during the period of time it was reviewing our draft
report. Accordingly, when implementing our recommendation, we
do not expect Education to limit itself to the estimate we cited in
our audit report.

11

We are not aware of the methodology by which Education
arrived at the amounts it presents throughout this paragraph,
and therefore we cannot verify the accuracy of the assertions it
provided or conclude whether this information is relevant to our

12

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recommendation. Nevertheless, we stand by our recommendation
on page 61 that Education investigate the difference between the
estimated number of school aged children statewide who have a
severe emotional disturbance and the number receiving mental
health services through an IEP and determine the reason for such
a discrepancy.
13

We state on page 58 of our report that not all students with
disabilities will qualify for special education or related services,
including mental health services. However, we also believe that
this is an insufficient explanation on its own for why such a large
gap exists between the estimated number of children with a severe
emotional disturbance and those with mental health services listed
in their IEP.

14

Education cites the results of our review of child find efforts at
the four LEAs we reviewed as evidence that its oversight of child
find efforts is effective statewide, which is misleading and does not
reduce the importance of our recommendation that Education
investigate the discrepancy between the number of children
statewide with a severe emotional disturbance and the number
receiving mental health services through an IEP.

 California State Auditor Report 2015-112 77
January 2016

Mt. Diablo Uni?ed School District
1936 Carlotta Drive
Concord, CA 94519
(925) 682-8000

 

OFFICE OF
SPECIAL EDUCATION

December 15, 2015

Ms. Elaine M. Howle, CPA
State Auditor
Sacramento, CA

Dear Ms. Howle:
We are in receipt of the redacted copy of the report of the audit requested by the Joint Legislative
Audit Committee concerning student mental health services. We appreciate the opportunity to

engage in the dialogue regarding these important programs for our students.

Our team reviewed the ?ndings and the recommendations in the report and as such we support
the recommendations and will implement them as written.

Very truly yours,

 

Wendi Aghily, 
Director, Special Education/SELPA
925-682-8000 4047

aghilyw@mdusd.org

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79

January 2016

OFFICE OF SCHOOL SUPPORT SERVICES
Division of Special Education
1515 Hughes Way, Long Beach, CA 90810
Telephone: (562) 997-8051 / Fax: (562) 997-8649

December 15, 2015
Elaine M. Howle, CPA*
State Auditor
Bureau of State Audits
555 Capitol Mall, Suite 300
Sacramento, CA 95814
Re: 2015-112 - California School Districts—Mental Health Funds and Services
Dear Ms. Howle:
The Long Beach Unified School District (“District”) appreciates the opportunity to provide the
following written response to the audit findings and recommendations before the audit report is
issued publicly.
On behalf of the District, I would like to thank your staff for such a comprehensive review in
terms of the impact and outcomes for students with disabilities after the enactment of Assembly
Bill 114 (114). The District appreciates the auditor’s recognition of the important work the
District has completed to improve special education programs while balancing resources for all
students within the Long Beach community. The District looks forward to applying the
recommendations outlined in the final audit report so that future students may benefit from
improved and streamlined practices and procedures.
If you have any questions regarding the District’s comments or corrective actions, please feel
free to contact me at (562) 997-8051.
Respectfully,

Chris M. Gutierrez-Lohrman, Ed.D.
Director, Special Education & SELPA
Long Beach Unified School District
Cc:

Christopher Steinhauser, Superintendent of Schools
Tiffany Brown, Ed.D., Assistant Superintendent, Office of School Support Services

*  California State Auditor’s comment appears on page 81.

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Comment
CALIFORNIA STATE AUDITOR’S COMMENT ON THE
RESPONSE FROM LONG BEACH UNIFIED SCHOOL DISTRICT
To provide clarity and perspective, we are commenting on
Long Beach Unified School District’s (Long Beach) response to
our audit. The number below corresponds to the number we have
placed in the margin of Long Beach’s response.
We reach no conclusions in our report regarding whether
Long Beach improved its special education program in the years
that followed Assembly Bill 114 taking effect, nor do we comment
on Long Beach’s administration of the special education program
in relation to its efforts to serve students outside of its special
education program.

1

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83

January 2016

December 15, 2015
Elaine M. Howle, CPA, California State Auditor *
c/o Bob Harris, Team Leader, BobH@auditor.ca.gov
RE:

Response to DRAFT Mental Health Audit Report

We want to thank your staff for being so collaborative throughout this mental health audit
process. Below are our comments about the recommendations:

2935 Indian Avenue

•

Perris, CA 92571
(951) 490-0375
FAX (951) 490-0376
Alvord Unified School District

•

The Riverside County SELPA agrees with recommendation regarding IEP
teams providing a rationale for residential treatment and any potential harmful
effects of such placement. In addition to the resources noted above, in 2015 the
SELPA staff compiled research to produce the document entitled “Research on
Intensive Mental Health Services”, which includes a section on concerns related
to placing youth in residential treatment centers. This document is also
available on our website in the same section. We will continue to work on this
message to the field.

•

The Riverside County SELPA in intrigued by the recommendation that Murrieta
Valley should use the six performance indicators to perform annual analysis on
the subset of students receiving mental health services. Once we identify a
means to do so, we will institute this for all LEAs.

•

The Riverside County SELPA agrees with the recommendation to obtain and
retain copies of contractor personnel lists and the credentials or licenses for
personnel who provide mental health related services to students. We have
already instituted this procedure.

Banning Unified School District
Beaumont Unified School District
Coachella Valley Unified School District
Desert Center Unified School District
Desert Sands Unified School District
Empire Springs Charter School
Harbor Springs Charter School
Hemet Unified School District
Jurupa Unified School District
Lake Elsinore Unified School District
Menifee Union School District
Murrieta Valley Unified School District
Nuview Union School District
Palm Springs Unified School District
Palo Verde Unified School District
Perris Elementary School District
Perris Union High School District
River Springs Charter School
Riverside County Education Academy
Riverside County Office of Education

The Riverside County SELPA agrees with recommendation to ensure that IEP
teams document the reasons for changes to mental health related services and
placements. These processes are defined in our “Mental Health in Schools”
document available on our website www.rcselpa.org under Policies and
Procedures Section 10. Such evidence may be lacking in the early transition
IEPs as it took time for the SELPA and LEAs to develop the procedures and to
hire staff to assume responsibility for mental health services. Extensive training
and ongoing conversations in our Special Education Directors, Program Support
Round Table, Mental Health Round Table, and Interagency Meetings has
occurred and the processes are now fully implemented.

We recognize that the purpose and scope of the mental health audit was specific.
However, we want to state our beliefs that we have improved the range, frequency,
and location of mental health related services to students. More students are being
effectively served under the AB 114 educational model than were served under AB
3632. Most importantly, staff and parents have increased their skills for supporting
students with social, emotional and behavioral challenges in the least restrictive
setting. We continue to work on our systems to be more proactive, data driven,
linked across agencies, and student outcome focused.
Please thank your staff for working collaboratively with us. Please feel free to call or
email if you have any additional questions or comments.

Romoland School District
San Jacinto Unified School District

Sincerely,

Santa Rosa Academy
Val Verde Unified School District

Sue Balt, Ph.D., Executive Director, Riverside County SELPA

*  California State Auditor’s comments begin on page 85.

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Comments
CALIFORNIA STATE AUDITOR’S COMMENTS ON
THE RESPONSE FROM RIVERSIDE COUNTY SPECIAL
EDUCATION LOCAL PLAN AREA
To provide clarity and perspective, we are commenting on Riverside
County Special Education Local Plan Area’s (Riverside) response to
our audit. The numbers below correspond to the numbers we have
placed in the margin of Riverside’s response.
In advance of providing Riverside with a draft copy of this audit
report, we shared our recommendation that Riverside develop a
process for ensuring individualized education program (IEP) teams
record the reasons for changes to student services or educational
placement. The first time Riverside mentioned this procedure to us
was in its response letter. We look forward to hearing more about
Riverside’s efforts to address our recommendation in its 60-day
response to this audit.

1

During the time period that Riverside reviewed a draft copy of this
audit report, it provided us a spreadsheet it stated it would use to
track whether it collected license and credential information from
all of its contractors. We mention this spreadsheet on page 56 of
this report. We look forward to hearing about Riverside’s progress
in implementing our recommendation in its 60-day response to
this audit.

2

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. ?30
bJ?Ed  

   

Board of Education
Robin Crist
Kenneth C. Dickson
Paul F. Diffley 
Barbara Muir
Kris Thomasian

Patrick Kelley
Superintendent

Our Mission

?To inspire
every student
to Think, to Learn,
to Achieve, to Care?

District Support Center
41870 McAlby Court
Murrieta, CA 92562

(951) 696?1600
Fax (951) 304-1536

leans

 

California State Auditor Report 2015-112 87
January 2016

December 15, 2015

Elaine M. Howie, CPA

California State Auditor

Re: Response to DRAFT Mental Health Audit Report

Dear Ms. Howle,

Thank you for sharing a copy of the Draft Mental Health Audit Report.

MVUSD is pleased to ?nd out that it meets requirements and implements best practices in
the area of child ?nd and identi?cation processes, meets requirements in the areas of
mental health staff quali?cations and parent complaint options.

MVUSD agrees with the recommendation made by the state auditors in the area of
monitoring special education student outcomes. Tracking outcomes for the subset of
students receiving mental health services will offer valuable information and assist in

evaluating the effectiveness of the district?s mental health programs.

In conclusion, MVUSD appreciates the collaborative nature of the mental health audit

and has found this process to be a positive learning experience.

Sincerely,

 

Zhanna Preston, 

Executive Director of Special Education

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January 2016

*

1

1

*  California State Auditor’s comment appears on page 91.

 90 California State Auditor Report 2015-1 12
January 2016

South East Consortium for Special Education
3434 Marten Ave.

  San Jose, CA 95148

Seum?osiSELPA Phone: 403.223.3771 1 Fax: 408.532.9311

?Mai-532$; a (Difference

 

To ensure that they can demonstrate that the contracted personnel who provide
mental health services are quali?ed, East Side and South East should annually obtain
and retain copies of contractor personnel lists and the credentials or licenses for
personnel who provide mental health services in the LEA or SELPA.

The SELPA agrees with this recommendations and plans to implement the
above~mentioned recommendation.

If you have any questions regarding this response, please contact me at
or at 408-223-3776.

Sincerely,
f;

 Mamet?

Director
South East Consortium SELPA

California State Auditor Report 2015-112

January 2016

Comment
CALIFORNIA STATE AUDITOR’S COMMENT ON THE
RESPONSE FROM SOUTH EAST CONSORTIUM FOR
SPECIAL EDUCATION
To provide clarity and perspective, we are commenting on
South East Consortium for Special Education’s (South East)
response to our audit. The number below corresponds to the
number we have placed in the margin of South East’s response.
It is generally not our practice to include specific references to the
law or regulation that underlie our recommendations. We believe
that in this case the additional detail suggested by South East is not
necessary for understanding the recommendations we made to the
special education local plan areas we reviewed.

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Preparing every student to thrive 1n a global society.

December 15, 2015
Elaine M. Howle
State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
RE: East Side Union High School District's Response to Draft Report State Mental Health Audit
Dear Ms. Howle:
This letter will serve as the response of the East Side Union High School District (ESUHSD) to the draft report
on Mental Health Services. We wish to acknowledge that the staff from your office has been through and
respectful during this process, and we appreciate their diligent work in this process.
The East Side Union High School District is in agreement with, and agrees to implement, the two
recommendations found in the Mental Health Audit Report:
1. To better understand the effectiveness of the mental health services in their special education programs,
East Side should use the six Education's pe1formance indicators we identified to perform analysis
annually on the subset of students receiving mental health services, (p. 7 of draft report)
2. To ensure that they can demonstrate that the contracted personnel who provide mental health services
are qualified, East Side and South East should annually obtain and retain copies of contractor personnel
lists and the credentials or licenses for personnel who provide mental health services to students in the
LEA or SELPA (pp. 15-16).
Please let me know if you have any questions.
Sincerely,

>J6a�-c,,t0 �
Barbara J. Moore, Ed.D., CCC-SLP
Director, Special Services, ESUHSD
mooreb@esuhsd.org
(408) 347-5171 - office
cc:

Chris Funk, Superintendent
Glenn Vanderzee, Assistant Superintendent, Instructional Services

East Side Union High School District Board of Trustees
Van T. Le, President

Lan Nguyen, Vice President

830 N. Capitol Ave.

I

Frank Biehl, Clerk

J. Manuel Herrera, Member

Chris D. Funk, Superintendent

San Jose, CA 95133

I

T 408.347.5000

I

F 408.347.5015

I

Pattie Cortese, Member

esuhsd.org

93