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Mission accomplished? OUSD’s structural deficit, closure savings and other budget questions

This spring, Oakland Superintendent Tony Smith heralded the elimination of a $40 million structural deficit that he had inherited when he came to OUSD in 2009. Soon thereafter, his financial services team discovered a multimillion-dollar shortfall, which was followed by major reductions in the proposed special education budget for 2012-13 and other adjustments.

Then, last Friday, the administration made the deficit-eradication claim once again. A public statement about the Lakeview Elementary School sit-in, which is now in its second week, said that the closure of Lakeview and other elementary schools had allowed the district to “eliminate a $40 million structural deficit…”

If you look at Slide #23 in the budget presentation¬†(second-to-last link), and your eyes automatically run to the highlighted green line, that sure looks to be the case: You see a $665,071 surplus. But scan a bit further down and you’ll find a different number — a structural deficit of $10.28 million. Continue Reading

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OUSD’s bumpy road to fiscal solvency hits an unexpected dip

In March, Superintendent Tony Smith and Deputy Superintendent Vernon Hal announced that the Oakland schools would be structural deficit-free for the first time in at least a decade, a major milestone for a district that’s often defined by its fiscal failings.

Then (and I don’t know exactly when), they discovered it: A coding error in the special education budget. As I understand it, a stream of one-time funds expired, but money kept flowing to the program afterward, from the district’s general fund. It took awhile for OUSD’s financial services team to catch on, apparently, because someone from special ed had erroneously indicated that the source of those continued funds was state revenue growth — which didn’t exist — rather than the OUSD general fund.

The upshot: OUSD is discovering, in late May, that it has $8 million less than it thought. The coding error was about $5.7 million. Add to that $2.2 million in increased transportation costs projected since the last interim financial report and a few smaller ticket items.

You can find the news story about it here. I should note that I still probably have a lot of the same questions you do.

This doesn’t look to be a short-term emergency, as it stands right now — at least, in the practical, paying-the-bills sense. Continue Reading