HAYWARD -- A grand jury investigation of Hayward schools concluded that past and current trustees have been reluctant to make difficult budget decisions, jeopardizing the financial soundness of the district.

The report, which came out this week, was critical of decisions made since 2006, when county financial experts assigned to help Hayward Unified out of a budget crisis left and the district regained fiscal autonomy.

"Initial complaints concerned board conduct at public meetings and the process of selecting a superintendent," reads the report. "Additional complaints and investigation by the grand jury revealed serious concerns about the board's role in allowing the district's finances to deteriorate to create the current fiscal crisis."

Jurors found that board civility has improved since new trustees were elected and training meetings were held, and found no flaw in the selection of Superintendent Janis Duran in 2010, and instead focused on the district's financial woes.

The report cites a failure to institute structural change in 2006, in particular pointing to a lack of enforcement of controls to prevent unauthorized hiring.

It states further inaction meant continued deficit spending and the depletion of reserves by the end of 2009.

When informed that a reduction in state per-pupil spending would result in a $5.1 million shortfall, "the board refused to make the necessary program cuts to address the loss of those funds. Rather, the board supported additional expenditures of almost $1.2 million for increased staffing."

Jurors found that after the return of Alameda County fiscal experts in early 2010, the board "continues to avoid difficult decisions." That includes not cutting teaching by six days in the 2010-2011 calendar year, issuing layoff notices past the March 2011 deadline and losing the option to lay off or reinstate staff, and overriding recommendations to eliminate certain positions.

Jurors also pointed at an item in teachers' contracts related to "an expensive preparation time policy, far in excess of other districts," which results in the hiring of a large number of substitute teachers.

Board President Lisa Brunner said that while all recommendations were not implemented, they looked at other areas to cut funds and make up the difference.

"When I personally look at what we are or aren't cutting, I'm looking at what's best for students," Brunner said. "I just don't believe in dumbing down education if we have other options, and I believe that we have made other cuts that have not affected students, that were not part of the recommendations."

The board adopted a qualified budget last week, which means it predicts the district finances will be balanced for this year, but unless more cuts are made they once again will be in the red by 2013.

"The board has made significant budget cuts," said Sheila Vickers, the county fiscal expert appointed to the district. "They did not make all the cuts, and they still have a deficit spending problem."

Hayward Unified will revisit the budget after 45 days, following an analysis of how the state budget will affect the district.

To read the report, go to www.acgov.org/grandjury/reports.htm.

Contact Eric Kurhi at 510-293-2473. Follow him at Twitter.com/erickurhi. Read his blog at IBAbuzz.com/hayword.