Sacramento City Unified School District could run out of money in 2 years, report says

The Sacramento City Unified School District’s Board of Education reported it will not meet its minimum reserve requirements for the current and next two fiscal years before the board is set to approve its first interim financial report at Thursday’s school board meeting.

The district’s unrestricted deficit spending exceeded the standard, and it projects it will spend more money than it will receive, causing the district to not meet its minimum reserve requirement in the current and next two fiscal years, according to the report.

The district will need to identify $27 million in cuts to address its structural deficit.

On Nov. 20, the county office of education told the district it needed a deficit reduction plan.

The school board will review what the district implemented from the Fiscal Crisis and Management Assistance Team report in December 2018. Last year’s report faulted the district for past mismanagement, communication failures, inexperienced staff and a staffing budget that could hinder its ability to solve the lingering budget problem.

The district responded to FCMAT’s analysis line by line, revealing whether change has been implemented. The district said it was unable to maintain its minimum reserve for the next two years.

“The district does not have a board-approved plan sufficient to restore the reserve at the time,” the report read.

But it also revealed that training in the business office needed improvement.

“There has been little or no budget and fiscal training for site and department administrators who are responsible for budget management,” the report read. “Training is done informally and as needed or requested rather than on a regular schedule.”

State takeover remains a concern at Sacramento City Unified, as the district’s report also states the financial situation could worsen in 2021-22, “unless an ongoing $27 million solution materializes.”

The district announced in September that their budget was rejected by the Sacramento County Office of Education. Sacramento County Superintendent of Schools David Gordon told the district it will fall short in the 2021-22 budget year.

The district’s report said that any budget deficit will not be resolved without a negotiated solution between the unions and the district.

The Sacramento City Unified school board will meet Thursday at the Serna Center at 6 p.m. Free child care is available.