Last August, I wrote about the fact that no one knew how much money the Oakland school district really had – five years after the 2003 state takeover.
State auditors found all kinds of discrepancies and missing records dating back to 2003, and OUSD hired an outside firm to “disentangle” its finances from those early years – to see if they could uncover the district’s true fund balance.
Now, as that outside firm wraps up OUSD’s cash flow case, the school district’s new CFO has some news for us: “District does not report the same cash balances as the Alameda County Treasury and Alameda County Office of Education (ACOE),” a bullet point on Page 31 of his presentation reads.
Further, CFO Vernon Hal reports: “Staff believes there will be significant adjustments to cash and the ending fund balance in the General Fund upon completion of analysis by an outside audit firm.” (The word “significant” is used twice, and underlined for emphasis each time. I still don’t know how much “significant” is.)
Board President Alice Spearman downplayed the potential impact of this fiscal bombshell, saying she just wanted the mystery solved. “It’s just something that you need to know,” she said. “Wherever we are, we’ll be able to start fresh and work from there.”
To complicate the matter, Oakland’s CFO predicts a nearly $30 million cash flow deficit in June — an alarmingly high figure, printed in red. District spokesman Troy Flint says it’s a one-month snag, because of $40 million in delayed payments from the state (expected to come in July, the start of the new fiscal year).
But how does the district plan to make payroll?
On Page 35, it tells us. “In order to ensure there is sufficient cash to meet financial obligations, resolution may be brought to (the board) for approval of temporary interfund borrowing.”
I asked Flint to clarify. It’s the facilities fund they’re talking about, he said. The local bond money to repair and modernize schools.
But wait: Is the state letting districts borrow from their facilities bond fund to make payroll? I thought that wasn’t allowed.
You can find the full interim financial report here. It includes more fiscal details, based on the new state budget, but few specifics on what local programs and departments will be cut, and by how much.
You can find tomorrow’s meeting agenda here.
image from Carla216′s photostream at flickr.com/creativecommons