College & Workforce Readiness

California Inflated High School Graduation Rate, U.S. Audit Finds

By Catherine Gewertz — January 17, 2018 4 min read
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California inflated its high school graduation rate by 2 percentage points for the class of 2014, according to a federal audit released Wednesday.

The examination by the inspector general’s office of the U.S. Department of Education found that if California had counted graduates properly, its official four-year high school graduation rate for 2013-14 would have been 79 percent instead of 81 percent.

Federal law requires that states report high school graduation rates by calculating the percentage of students in each entering freshman class that earn regular high school diplomas four years later. Students can only be removed from each cohort’s count if school districts have written proof that they died, emigrated, or transferred to another school.

California violated those rules, the audit found, by removing 10,543 students from the freshman cohort for improper reasons or without proper documentation, and counting 1,849 students as graduates when they hadn’t met the requirements for a regular high school diploma.

Auditors took California to task for having insufficient procedures and controls to ensure that districts report accurate and complete graduation-rate data to the state. Because the state department of education didn’t have good mechanisms to ensure accurate data, the report says, it failed to detect errors.

Here are the key areas of miscalculation it found:


  • Not counting students who left high school to attend community college or adult-education programs. The state improperly allowed 10,543 such students to be removed from its freshman class calculation—25 percent of all the students it removed from the cohort. Federal rules allow such removals only when students transfer to institutions that grant regular high school diplomas, the audit said.
  • Improperly counting students as graduates. California counted as high school graduates 1,849 students who earned adult-education diplomas or certificates of proficiency. Federal rules require that states report only regular high school diplomas.

Correcting for those errors statewide would have decreased the state’s 2013-14 graduation rate by about 2 percentage points, the report said.

The report recommends that the U.S. Education Department require California to revise procedures for calculating high school graduation rates, and review current and prior years’ cohort classifications “to gain reasonable assurance” that students are correctly classified. It also recommends that the federal department require California to develop better internal controls so it can detect errors in data reported by districts.

In its response to the preliminary findings of the audit, California disputed the inspector general’s conclusions and recommendations, in part because some of its calculations were based on spot-checking practices in only three districts.

Findings Disputed

In an eight-page response, Chief Deputy Superintendent Michelle Zumot said that the state agrees that it didn’t monitor local districts’ reporting processes, but that this is “not an oversight nor a deficiency.” It agreed to step up such monitoring, but Zumot noted that California believes it’s “crucial” for local superintendents to take responsibility for submitting accurate data. She also said that lack of written documentation supporting a student’s transfer doesn’t necessarily mean the transfer wasn’t legitimate.

California has reported graduation-rate data “in good faith, ... substantially following federal requirements,” and the calculations targeted by the inspector general affect “a very small number and percentage of students,” Zumot’s letter said. Nonetheless, the state recognizes that it “may need to make some changes” to align its practices to federal graduation-rate guidance issued in early 2017, she said.

In a statement issued Wednesday, the California Department of Education said that some of its “areas of disagreement” with the inspector general’s report stem from differences between state and federal law, and from “a misunderstanding of how California collects and processes data.”

California considers high school diplomas earned in adult education programs to be standard diplomas, for instance, even though federal guidelines don’t allow for that, the statement said.

The department “is confident in the practices and procedures it has put in place to assure the accuracy of graduation rates, but we are always looking to strengthen our system,” the statement said. “As such, we plan to follow the audit recommendation to help superintendents more clearly understand what it means to accurately certify data and maintain documentation.”

California is one of three states whose graduation-rate practices are being audited by the inspector general’s office of the U.S. Department of Education. Last summer, it found that Alabama had flouted federal rules in its graduation-rate calculations. Its probe of Utah’s practices is still underway, according to a department spokeswoman.

California caught the eye of federal investigators because there was a big gap between the number of students the state reported in its freshman class and the total number of freshmen that districts collectively reported, the report said.

For more on national high school graduation-rate trends, see:

U.S. Graduation Rate Hits New All-Time High, With Gains in All Student Groups

For more on graduation rates by state and student groups, see:

Data: U.S. Graduation Rates by State and Student Demographics


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