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A tiny, rural school district in northern Los Angeles County is under growing scrutiny over its approval of more than 20 new charter schools in the last few years, the majority of them serving students outside of its own district boundaries. At least three are within the Los Angeles Unified School District.

The small district, called Acton-Agua Dulce Unified (AADUSD), is home to just three traditional schools, 1,100 students and one site-based charter school that opened just this year. The district is teetering on the brink of insolvency: it has seen a sharp drop in enrollment in recent years and not enough revenue to meet its budget needs of $10 million – all of which have contributed to its unusual charter policy.

“I’m not denying there is a financial component,” says Acton-Agua Dulce superintendent Brent Woodard, referring to the charter approvals. “But bottom line is I’m an advocate for kids.” He says the district has little choice because of its dwindling resources.  Approving the slew of new charters is good for the charters and good for his district, he says, which has charged up to a 7 percent fee to manage.

“We’ve been called rogue,” he said. “I would disagree.”

Charter schools are independently run but publicly funded schools, typically authorized by local districts that are responsible for overseeing operations and performance. The vast majority of the 1,200 charter schools in California operate within the boundaries of the districts that authorize them.

The large-scale approval approach taken by Acton-Agua Dulce has raised the ire of neighboring school districts, including Los Angeles Unified — where three of those charter schools, Valley Prep Academy 9-12, K-5, and 6-8 opened in the valley at the start of this school year.

Both LAUSD and another neighbor, Newhall Unified, have filed lawsuits to stop the charter schools from operating. According to Sue Ann Salmon Evans, a lawyer representing both LAUSD and Newhall Unified, these out-of-district approvals are a misuse of the charter school act, which states a charter should be located within district boundaries unless it is unable to do so. Those cases are considered “exceptions.”

“Just because they don’t have a building, should they be allowed to pepper the state with charter schools? That’s inconsistent with the charter school act,” she said.

Last month LA Superior court Judge James Chalfont partially agreed, ruling that a newly opened school in Newhall Unified, Einstein Academy, did not have a valid charter and must return to AADUSD to be re-authorized by early next year. The reason: more evidence is needed to establish that the school could claim an exception. The ruling also forbids AADUSD from basing its charter approvals on whether they generate revenue. But the judge allowed the school to continue operating without interruption.

LAUSD is awaiting action by the same judge, perhaps as early as this month.

Part of the issue can be reduced to accountability: while charter schools operate under plenty of scrutiny, their authorizing bodies, primarily school districts, have limited oversight.

“There is very little commonality,” says Myrna Castrejón of the California Charter School Association (CCSA). “There are districts that overreach; there are others that do a very poor job authorizing. We think its time to take a close look at the quality of charter authorization oversight.”

The Los Angeles County Office of Education (LACOE) is one entity that oversees school districts, but it does not have authority to tell a district what to do — and can only intervene if a district is financially unstable.

“We count the beans; we can’t tell them what to do with the beans” says Kostas Kalaitzidis, spokesman for the office.

In the case of Acton-Agua Dulce, an independent audit requested by LACOE found the district to be in near insolvency. Among other issues, the report questioned the high fee the district claimed to oversee the charters. In August it directed the district to cut that fee by $740,000, as well implement cost-saving measures such as layoffs.

But the county does not have the authority determine whether or not Acton-Agua Dulce’s proliferation of out-of-district approvals is a valid practice. That is up to the courts or the legislature.

In September, a bill intended to address the issue went to Governor Jerry Brown, but he vetoed it, saying that “while this bill attempts to solve a real problem,” it was written too broadly.