SAN FRANCISCO -- San Francisco school officials have some explaining - and complying - to do.

Last year, the district failed to follow the strict rules attached to a $56 million, three-year federal grant to improve student performance at 10 of its lowest-performing schools. The schools could lose the second installment - about $18 million - if they don't make adjustments.

San Francisco can take some solace in the fact that none of the 41 districts in California receiving similar grants followed all the rules, including Oakland, West Contra Costa and Hayward, and also risk losing a second round of funding.

The districts didn't know they would receive the grants until after the 2010-11 school year started and then didn't actually get the money flowing into the schools until December or January.

In addition, some of the federal Department of Education's rules attached to the cash were open to interpretation.

"There was a lot of confusion," said Chris Swenson, director of the state Department of Education School Improvement Division. "It was done rather hurriedly."

Four reform methods

The schools, among the 188 schools ranked academically in the bottom 5 percent statewide, were required to adopt one of four reform models. Those included closing; converting to a charter school; bringing in new leadership and staff; or replacing the principal combined with other major reforms like an overhaul of teaching methods.

The schools that the district kept open to reform had to increase the school day or academic year.

In San Francisco, Willie Brown Elementary was closed. Four schools adopted the model requiring the turnover of staff and the other five replaced the principal and revamped instruction.

District officials, however, were dinged for failing to swap out, as required, at least half the teaching staff at three of the four schools, violating a major component of the selected reform model.

Guilty, district officials said without remorse.

Because the grant money came in so late, Superintendent Carlos Garcia refused to pull teachers out of classrooms midyear, said district spokeswoman Gentle Blythe.

"The superintendent made a decision that he would take it up with the state and federal authorities rather than do that to school communities after the school year began," she said.

The district fulfilled the requirement by the start of this academic year in August, which has satisfied federal and state authorities, Blythe said.

A reform principal

There was also some confusion at Everett Middle School, which was required to replace the principal with a reform-minded leader. Federal authorities questioned whether the new principal, who was replaced as allowed within a two-year window prior to the grant, fit that description.

He was hired to fix the school, district officials told state and federal officials.

"This was an issue of miscommunication that seemed to have stemmed simply from the principal not self-identifying as a 'reform principal,' " Blythe said.

State officials conceded the point.

But San Francisco, along with nearly every district in the state, failed to adequately increase learning time for students and will have to do so this year to fulfill the requirement. That could mean summer school, longer school days or even Saturday school - for all students.

Each of the 41 districts will have to submit by Sept. 12 corrective action plans that show that they are in compliance before they can get the new round of funding.

When money arrives

As soon as the problems are corrected, they'll get the money, Swenson said.

"The guidance continues to be refined," Swenson said. "They're getting another opportunity through this process."

In the meantime, the nine San Francisco schools that received federal grants are moving ahead with the second year of reforms, using first-year funds officials didn't have time to spend last year.

The funds will continue to be spent primarily on a few key areas: tutors, classroom coaches and teacher training; new and higher quality materials; and staff to help engage parents, district officials said.

Spring test scores released this month showed some improvements in student proficiency within those schools, but also that a lot of work remains to be done.

Federal School Improvement Grant reform models To receive federal School Improvement Grants, district officials must choose one of four reform options for each school: Turnaround model: Replace the principal (if on the job more than two years) and at least 50 percent of the school staff, and rework the school's instructional program. Restart model: Convert the site to a charter school or select an education management organization to operate it. School closure model: Close the site and enroll students in higher achieving schools within a reasonable distance from the closed site. Transformation model: Replace the principal (if on the job more than two years), increase instructional time and adopt other improvement strategies.