Report 2019-108 Recommendation 10 Responses
Report 2019-108: Sacramento City Unified School District: Because It Has Failed to Proactively Address Its Financial Challenges, It May Soon Face Insolvency (Release Date: December 2019)
Recommendation #10 To: Sacramento City Unified School District
To prevent a similar fiscal crisis in the future, Sacramento Unified should do the following by July 2020:
Have the board adopt a budget methodology, including guidance on the use of one-time funds, the use and maintenance of district reserves, and the maintenance of a balanced budget. The methodology should use the Government Finance Officers Association's best practices as a guide and should address at least the following areas:
Including administrators from different divisions of Sacramento Unified into the budget development process to help ensure the accuracy of projections.
Establishing criteria and measures for success in the budget process, such as whether budget decisions were made with adequate input and deliberation and whether the budget was balanced without using reserves or one-time revenues for ongoing expenditures.
Developing and adhering to a multiyear funding budget plan, with the goal of realigning resources where necessary to fund ongoing expenses with ongoing revenue.
Conducting an analysis of variances in budgeted and actual revenues and expenditures at each interim reporting period. Sacramento Unified should then use this information to inform its estimates for the upcoming fiscal year's budget.
6-Month Agency Response
Subsequent to the February 6, 2020, Board Meeting, at the May 21, 2020, Board Meeting, the District brought forward a revised draft of the above Board Policy for a first reading. The Board provided comments and suggestions which staff will address and present at the June 18, 2020 Board Meeting. https://www.scusd.edu/sites/main/files/file-attachments/10.2_31.pdf
Beginning in the spring of 2019, Fiscal and budget staff have been meeting regularly with the LCAP/SPSA Coordinator and Director of State and Federal Programs to review key issues in developing the LCAP and SPSA budget plans. These meetings have resulted in enhancements in LCFF supplemental and concentration reporting to ensure greater alignment between what is base versus supplemental. There is stronger collaboration on the reporting of LCAP variances to ensure that responses reflect the thinking of both the State and Federal team and fiscal services.
During the fall of 2019, a cross department team including the academic office, fiscal, human resources, instructional assistant superintendents, guidance and counseling, master scheduling, technology, and continuous improvement met to redesign the district's one stop staffing and resource allocation process to ensure greater alignment and integration of key discuss processes such as core course pre-registration and SPSA action planning/budgeting. The team has created an integrated planning calendar to ensure that all resource allocation decisions are framed through a financial and student centered return on investment. The work on the additional items of this recommendation will continue into the summer and fall of 2020.
- Estimated Completion Date: TBD
- Response Date: June 2020
California State Auditor's Assessment of 6-Month Status: Pending
We look forward to Sacramento Unified adopting policies that would address our recommendations regarding the use of one-time funds and maintenance of district reserves and we will review its revised budget policies when the district completes them.
60-Day Agency Response
The District agrees with the recommended budget development improvements and with the recent hiring of a Budget Director, the District will work on a plan to implement for the upcoming 2020-21 budget development cycle.
At the February 6, 2020, Board Meeting, the District brought forward a first draft of a revised Budget Policy that includes guidance on the use of One-Time Funds and the maintenance of a district reserve above the State Required Minimum. https://www.scusd.edu/sites/main/files/file-attachments/combined_2-6-20.pdf
- Estimated Completion Date: July 2020
- Response Date: February 2020
California State Auditor's Assessment of 60-Day Status: Pending
Agency responses received are posted verbatim.