"california distinguished school" -fraud?

Years ago I worked at an elementary school who wanted recognition as a “California Distinguished School”. I don’t remember the details, but I knew they had to put up an expensive application fee. Then some reps from the orginization visited to check us out. We passed the evaluation and earned the permission to re-paint an exterior wall with “A California Distingished School” across it.
Since then, more and more schools are boasting signs and murals about their recognition as a “California Distinguished School”
But my inner cynic asks- is this outfit on the up and up? Or is it more on the lines of “getting a star named after you” (In other words, essentially buying yourself a trophy that isn’t even officially recognized outside of the orginization.
To be fair, I’ve heard a few schools have been turned down (don’t know if their application is refunded), so there is some quality controll. Still, anyone with a background in education could make a nice living declaring themselves in charge of “[insert official-sounding name here] Schools”, charge a high application fee, and bestowing my acceptence on schools that weren’t disasters…
So what’s the truth?

P.S. Quoting edu-babble from a school webpage about the award and how they just earned it doesn’t tell me much

The California School Recognition Program appears to be an endeavor of the California Department of Education.

There’s a similar program in my state.

The most important thing to keep in mind is that a school really needs to have it’s stuff together just to apply properly. And you’d be surprised how many just can’t do even that. At a lot of places, it’s “running as fast as you can just to stay in one place.” So any extra work, like these applications, are beyond them.

The National Merit Scholarship people also have a similar designation for high schools, but that’s probably more based on % of merit scholars and such.