Ed. Code, § 54483

The Director of Compensatory Education, acting pursuant to rules and regulations adopted by the State Board of Education, upon the advice of the Directors of the Departments of Finance, Social Services, Employment Development, and Industrial Relations, shall designate the most concentrated areas of poverty and social tension in the state, taking into consideration such factors, among others, as the high incidence of poverty and low family and per capita incomes, unemployment, juvenile delinquency, persons receiving assistance under the program of aid to families with dependent children, and especially the low level of academic achievement by pupils in the public schools.

The Director of Compensatory Education shall allocate the funds available for programs under Section 54480 proportionately by public school population among the areas designated by him. He shall then approve projects proposed to be undertaken by school districts within such areas at particular schools with the highest concentration of low-income children and with the lowest records of academic achievement. Funds not fully utilized in one designated area may be reallocated to the other designated areas. Upon the request of a school district, the Director of Compensatory Education may authorize funds to be used outside the designated areas to serve children from the designated areas.