School district leaders sent a “critical budget” memo to all staff this week announcing an immediate freeze on spending at schools and central office departments, saying the freeze is necessary to save $10 million in the next three months to keep from going into the red.
Effective Monday – the day the memo went out – schools and departments can no longer transfer money between funds or create purchase orders.
The “bottom line,” according to the memo, is that the “district must realize a $10 million reduction in spending/expenses … to achieve a balanced budget for FY 2016-17.”
“At minimum, we are at risk of Alameda County Office of Education not approving our 2017-18 budget. This could limit our ability to make decisions regarding district programming.”
The freeze, called a “spending limitation protocol,” would not impact restricted, state and federally mandated program funds.
In January, the district had instituted a less rigid spending protocol that urged schools and departments to avoid unnecessary expenses.
“Unfortunately, current budget analysis is showing that the (protocol) is not yielding its intended results. In fact, it may have had an opposite impact, with many central and school staff encumbering more funds, instead of working to conserve resources and limit spending,” states the memo.
“We don’t want any school to operate without essential needs, but in the measures we took January we said we wanted to limit spending. But spending went up 250 percent compared with the same time last year,” said School Board President James Harris in an interview with the Post.
Harris said the goal of saving $10 million by mid-June is realistic, and that the spending freeze, along with some other measures, can keep the district solvent through the end of the school year.
“We have to be disciplined,” he said. “In a couple of weeks we’ll be able to say with certainty that this is working. We’ll actually see the impact.”
“I don’t think we’re (at a point) where the state is going to come in and take over.”
Trish Gorham, president of the Oakland Education Association, told the Post that she was concerned that nobody is being held accountable for making budget decisions based on inflated student enrollment and understated special education and early childhood program costs.
“They made decisions in order to have money to play with based on false figures,” she said.
The district still has a state trustee who is supposed to oversee the budget. “What was she doing? She needs to be asked some questions publicly,” said Gorham.
Former School Boardmember Sylvester Hodges also called for accountability.
“They need to set up a task force to review what got them into this crisis so this kind of stuff can’t happen again. It wasn’t the kids who messed up – it was the adults in charge,” he said.
In addition to the $10 million that must be cut by June of this year, the district is already getting ready to lay off employees to cut $14 million to balance to the 2017-2018 budget.
Last week, the district sent layoff letters to 36 certificated administrators, and classified administrators will be receiving notices at the end of March, according to Joanna Lougin, executive director of United Administrators of Oakland Schools, the school administrators’ union