New budget numbers revealed to the public this week suggest that it may have been premature to celebrate the Oakland school district's return to fiscal solvency.
Just two months after the district administration announced it had wiped out the structural deficit, fiscal analysts estimate the district has roughly $8 million less than it thought -- largely because of rising special education transportation costs and a budgeting error in the same department amounting to $5.7 million.
The district has enough money to pay its bills for the rest of the year, and likely next year, Deputy Superintendent Vernon Hal reported Wednesday night. But without further cuts, the district will continue to spend more general-purpose revenue than it is taking in.
"This is disturbing to me," school board member Alice Spearman told Hal, as the board took in the numbers in the latest progress report. "It didn't look like this the last time. How did we get here?"
Hal said a coding error made in the special education department was to blame for most of the discrepancy. For years, the district had relied heavily on one-time money to fund special education programs. But when that so-called "soft money" expired, the expenditures continued, unbeknown to the district's financial services department, explained the district's new budget director, Kathleen Clow, and former budget director, Gloria Gamblin.
"Didn't we know we were going to use it up?" Spearman asked Hal about the expired funding source.
"We should have," Hal responded.
Ironically, the error that's causing so much fiscal havoc might have been caused, in part, by an earlier attempt to cut costs: The special education department's financial team was reduced to a single person. In hindsight, Gamblin said, the department's $70 million-plus budget is too much for one financial services manager to handle; an accountant or accounting clerk is needed for the department's day-to-day operations.
Sharon Casanares, the special education director, retires in June after two years of leading the department. She did not come to the board meeting, nor did any representative.
"I told the people from the program side to be here and to have the conversation because this came up, and I don't see anybody here. That's not cool for me," Hal said to the board. He added, "This is an unacceptable increase that needs to be resolved."
What's unclear is how much the district administration will attempt to trim from the special education budget or from other school programs before it presents its final spending plan to the school board for approval. Hal noted that the district had told schools they would receive an additional $12 million for 2012-13, based on earlier budget projections.
"If we'd known this, we wouldn't have allocated that much," Hal said.
Hal told Spearman it was still possible that the district will eliminate the structural deficit through other reductions. There's little time to do so, however, as districts' budgets must be submitted by the end of June.
Troy Flint, the district spokesman, said Thursday there were no plans to reduce schools' allocations so late into the budget cycle.