Under the gun to scrape together savings by the end of the month, San Diego Unified is now weighing whether to use more than $15 million in federal funds for disadvantaged students to cover what once were basic costs.

The plan goes like this: Instead of using ordinary money to pay for counselors and graduation coaches who help students make up classes online, San Diego Unified would turn to federal money intended to help schools alleviate the impact of poverty.

It would play out differently depending on the school. Poorer schools would cover the costs of the counselors and coaches with special federal funds for disadvantaged students. Schools with wealthier students would use leftover federal stimulus money.

But critics and a state official say shifting those costs may violate the law. The law insists that school districts must provide comparable services to all schools with their state and local funding. The federal money for disadvantaged students is supposed to be a cherry on top, for the extra needs of poor children.

One of the key legal issues is whether the federal stimulus money, which was given to school districts to help survive the economic crunch, falls under the same rules as the ordinary funding that districts get.

“For a hundred years they’ve paid for counselors out of their [ordinary] budget,” said David Page, who leads a parent committee that oversees funds for disadvantaged schools. “Now they’re going to tell the federal government that this is a new idea?”

Tapping the federal funds is one of a handful of 11th hour cuts meant to keep the school district on an even keel. San Diego Unified now must close a nearly $77 million deficit after already agreeing to $50.5 million in earlier cuts.

San Diego Unified has gotten into hot water before for misusing these federal funds: It was recently forced to repay nearly $700,000 to its own programs for poor students after federal auditors concluded that it misspent federal money on a golden handshake for exiting employees seven years ago. Staff had long argued that the move was legal. It misspent the same funds again last year on meals and lobbying.

Richard Graham, a California Department of Education official who monitors school districts for compliance with state and federal law, said that based on the facts supplied by voiceofsandiego.org, using the federal money for disadvantaged students to pay counselors at poor schools and stimulus money to pay counselors at other schools appears to violate federal law.

Attorneys consulted by San Diego Unified have said the plan is legal, said Debbie Foster, budget operations director.

The school district is paying $5,000 to Brustein & Manasevit to get advice on whether it can use the money this way. Its auditor and an outside group that advises school districts also believe it is legal. And budget officials plan to meet soon with Page and his group to get feedback.

However, school officials have yet to get a green light from the federal government or a legal opinion in writing. “No one here wants to take any risks with this money,” Foster said. “We want to make sure every single one of our strategies is appropriate.”

But if the plan falls through, the school district has charted out few other options to balance its budget.

School board President Richard Barrera argued that as school budgets get thinner and thinner, what might have once been basics have now become extras.

“If we don’t do this, I don’t know how we can balance our budget,” he said. “And if we don’t use this money to cover counselors, it could very well be that we cut the counseling positions.”

Sandy Brown, a program analyst at the U.S. Department of Education, said he couldn’t determine whether San Diego Unified would run afoul of the law, but such problems are common as budgets drop.

“Maybe a school district only has 90 percent of the revenue they need for their budget,” Brown said. “Then they see these federal funds sitting there and they want to tap into that.”

The $15 million in federal funds that San Diego Unified is eyeing was left unspent at schools and the central office this year. Counselors and graduation coaches aren’t the only things that San Diego Unified might cover with the money: It would also be used to cover teacher training at all schools.

Relying on these federal dollars to pay for counselors, coaches and teacher training would leave San Diego Unified scrambling to find a new way to pay for them next year. The leftover money for disadvantaged schools will run out at the same time as stimulus dollars that temporarily saved jobs.

San Diego Unified is scrambling to figure out how to balance its budget after California threw new cuts at schools. The school district is also strapped because some of its earlier plans to slash costs, such as a hiring and spending freeze, have reaped fewer savings than it had originally hoped.

And California plans to delay more than $58 million in funding from this school year to next, forcing the school district to borrow money.

Other cuts that the school district has scrounged up to cover the gap include cutting classes to help teens pass the high school exit exam, eliminating a program that supports beginning teachers, and taking away funding that covers special supplies, field trips and other costs for gifted students. It is also pressing magnet schools with special themes to figure out how to cut $600,000 from their budgets.

“We are really scraping,” said Phil Stover, interim chief financial officer. “Before, we cut to the bone. It’s arms and legs now.”

Please contact Emily Alpert directly at emily.alpert@voiceofsandiego.org and follow her on Twitter: twitter.com/emilyschoolsyou.

Dagny Salas was web editor at Voice of San Diego from 2010 to 2013. She was an investigative fellow at VOSD from 2009 to 2010.

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