California officials discovered that the Los Angeles public (state) school administrators have been withholding funds from low-income families attending Catholic schools.

In 2019, the Archdiocese of Los Angeles filed a complaint against the LA public school district after finding out that only 17 of their schools were eligible for Title funds.

Title funds help lower-income schools cover their needs and meet academic standards.

Local officials submitted a report on the state of school funding, claiming that the district "has failed to provide equitable services to (archdiocesan) schools." The school also "engaged in a pattern of arbitrary decisions" without speaking with the archdiocese. Doing so was a clear violation of federal and state law.

This funding would have been used to help more than 13,000 students reach the local academic standards by providing tutors, counseling and coaches in essential skills. "Even though they are not public school children, the school districts that they live in are obligated to provide them the resources necessary to supplement their educational programs," Paul Escala told Religion News Service. Escala is the senior director and superintendent of Catholic schools in Los Angeles.

The California Department of Education told the district that they have 60 days to "engage in timely and meaningful consultation" with the leadership at the Los Angeles archdiocese and to "recalculate the numbers of students from low-income families." A significant part of this financial gap is attributed to how the district redefined the particular standards that students must match to qualify for funding. The district also excluded schools when they submitted insufficient paperwork.

The school district intends to begin reimbursing Catholic schools for services they had not received in the coming years.