  The electronic structure and magnetic properties of the strongly correlated
material La$_2$O$_3$Fe$_2$Se$_2$ are studied by using both the density function
theory plus $U$ (DFT+$U$) method and the DFT plus Gutzwiller (DFT+G)
variational method. The ground-state magnetic structure of this material
obtained with DFT+$U$ is consistent with recent experiments, but its band gap
is significantly overestimated by DFT+$U$, even with a small Hubbard $U$ value.
In contrast, the DFT+G method yields a band gap of 0.1 - 0.2 eV, in excellent
agreement with experiment. Detailed analysis shows that the electronic and
magnetic properties of of La$_2$O$_3$Fe$_2$Se$_2$ are strongly affected by
charge and spin fluctuations which are missing in the DFT+$U$ method.
