We Demand an Audit

Kudos to Mike Hutchinson for ferreting out the budget surpluses in the Oakland school district and exposing how the billionaire-supported school board has been hiding these surpluses while they cut local public school budgets. This immoral practice is at the heart of the corporate privatization scheme to make local public schools non-viable and coerce working class parents into accepting charter schools as the best option for their kids

The 7-11 committee was created to advise the school board on how to dispose of “unnecessary” school district property to raise additional revenue. In practice, the OUSD version has been acting as a front group to justify the closing of so-called “underutilised” neighborhood schools. If these closed schools are not sold to developers to build more high priced housing, they will be converted into more charter schools (i.e. privatization)

https://www.ousd.org/7-11committee

OUSD ended the 2018-19 school year with a $21,262,923 budget surplus.  OUSD ended 2017-18 with a $29,323,708 budget surplus.  

Public schools receive two types of funding, restricted and unrestricted.  Unrestricted dollars can be spent however the school board decides.  Restricted dollars can only be spent on the specific programs they are intended to fund, for example Title 1.  OUSD ended 2018-19 with an ending fund balance of $71,245,992.  Because OUSD has had a budget surplus 4 of the last 5 years over $71m is currently in OUSD accounts and available to be used.  

Of the ending fund balance $40,683,995 is restricted and $30,561,997 is unrestricted.  There should never be a surplus of restricted dollars.  Because these funds are intended to be targeted, they should be fully used every year and should always end the year with a zero balance.

The unrestricted ending fund balance is also called the reserve for economic uncertainty or simply the reserve.  This is an important number.  Because OUSD still owes money to the state they require OUSD to maintain a 2% reserve (unrestricted ending fund/total revenue) and if we don’t the state can takeover OUSD again.  Last year the school board passed resolution 1819-0144 which made it policy to maintain a 3% reserve.  OUSD ended 2018-19 with 30,561,997 or 5.22% in the reserve.  There is 2.22% or $12,974,489 more in the reserve than the school board’s policy requires.

Resolution 1819-0144 also states,

“BE IT FURTHER RESOLVED, for the 2019-20 school year only, once the 3% Reserve for Economic Uncertainty has been met and all legal and mandatory obligations are met, that any additional unrestricted general fund revenue, including but not restricted to one-time funds from the Governor’s May Revision budget, be allocated to schools for site-based budgeting in order to replenish the $3 million in reduction to school site discretionary budgets mentioned above; in allocating these funds, first priority will be given to school sites with a disproportionate impact of multiple reductions to their school in 2019-20 (money and positions) and are serving a concentration of our most vulnerable and

highest needs students.”  

The school board’s own policy calls for at least $3m to be returned to our school sites immediately.  The school board should also revisit the decisions they made based on a financial crisis we now know never existed.

Not only has the school board continually cut money to our schools while accumulating large budget surpluses and lobbied for both local and state legislation based on false numbers all while forcing a teachers strike, closing schools and planning to sell property, they are also violating their own budget policy.    Currently OUSD has no senior business officer and the chief financial officer job has been outsourced to a consultant.  For the last year the school board and superintendent have stated that they were receiving extra support to manage the budget from the Alameda County Office of Education and FCMAT but the mismanagement has only gotten worse.  Many of these problems were cited in the recent Alameda Grand Jury Report, Oakland Unified School District’s Broken Administrative Culture, which started in finding 19-15, “The Oakland Unified School District Board has failed in its responsibilities to serve the students of Oakland. Collectively, the Board has not provided leadership and strategic direction to correct the severe financial problems facing the district.”  We have no faith in this school board’s and this superintendent’s ability to manage the district’s finances and provide accurate legally required information and they can no longer be allowed to make decisions to close schools and sell property until these serious questions can be answered.

We demand:

1. The school board must immediately restore the $3m cut from our schools this year.

2. The school board must immediately pause the Blueprint Process, the Citywide School Closure Plan and the 7-11 Committee.

3. An immediate audit and investigation of OUSD’s finances to verify the numbers and determine where funding has been coming from and where it’s been going.

4. The Oakland City Council,  our state representatives Rob Bonta, Buffy Wicks and Nancy Skinner, and Congresswomen Barbara Lee join us in our demands and call for an official audit by the California state auditor.

OUSD 2018-19 Unaudited Actuals (final official budget numbers:

https://ousd.legistar.com/View.ashx?M=F&ID=7692637&GUID=AA984E1D-1056-40A8-9B53-08800C520EF2

Resolution 1819-0144, March 4th 2019:

https://ousd.legistar.com/View.ashx?M=F&ID=7056489&GUID=B6CE33C8-DA0E-4F08-BECB-D9BF3CB908E8

2018-19 Alameda Grand Jury Final Report:

http://grandjury.acgov.org/grandjury-assets/docs/2018-2019/2019.FR.pdf

Mike Hutchinson 
OPEN Oakland Public Education Network