How did Highlands receive more than $180 million it was not eligible for?

The auditor identified $177 million in funding for 2022–23 and 2023–24 that Highlands’ classroom-based school did not qualify for. It also found attendance overpayments, including $3.5 million beyond that $177 million. These overlapping figures should not be added twice. [2]

The audit identified inadequate oversight by Twin Rivers Unified School District, the Sacramento County Office of Education and the California Department of Education. It also criticized annual audits and follow-up on earlier warnings. [2]

Morgan’s August 2026 education paper examines how money passes through state, county and local systems. Its broader argument is about whether records connect a payment to a school, a service and a correction when something goes wrong. That campaign analysis is distinct from the State Auditor’s findings in this case. [1]

Highlands disputed aspects of the audit and argued that the proposed repayment would threaten its survival. CDE said it would monitor compliance and act within its authority and the school’s rights to review the findings. Those responses appear with the published audit. [2]

Cohen chaired the court-ordered Charter School Audits Task Force formed after the separate A3 charter-school fraud case. Its September 2024 report recommended changes to auditor qualifications, audit procedures, reporting and oversight. [3]

On July 10, 2026, her office said AB 126 implemented most of the task force’s recommendations. The announcement describes stronger CPA requirements, expanded working-paper reviews and more detailed financial disclosures. [4]

That is part of her record and belongs beside the failures. The next performance test is whether the reforms produce better audits, earlier intervention and a documented resolution of ineligible payments. Announcing new safeguards and proving they work are separate steps.