(a) A school district which spends less in local funds during the current year than in the base year for the purposes of conducting programs to improve student attendance and student retention shall have its apportionment of comprehensive operating aid under subdivision 12 of section 3602 of the Education Law reduced in an amount equal to such deficiency in the current year or the succeeding school year. In addition, a district which spends any part of its total annual setaside attributable to attendance improvement and dropout prevention in an unauthorized manner in the base year shall have its current year apportionment of comprehensive operating aid reduced in an amount equal to the amount of such unauthorized expenditures. In no event shall the reductions assessed pursuant to this section on the current year apportionment of comprehensive operating aid, be deducted from the setasides required pursuant to this Part and paragraphs f, g, and h of subdivision 12 of section 3602 of the Education Law.

(b) Beginning with the 1994-95 school year, the city school district of the City of New York shall allocate at least one-third of any increase from base year levels in funds set aside for attendance improvement and dropout prevention to community-based organizations. Any increase required to community-based organizations must be in addition to allocations provided to community-based organizations in the base year.