Oakland Unified members of the Service Employees International Union demand a signed contract during the June 26, 2019 school board meeting. (Photo by Theresa Harrington/EdSourcce)

Just days after a scathing Alameda County civil grand jury report blasted the Oakland Unified School District for wasteful spending and a “broken administrative culture,” the school board approved a new budget for 2019-20 after saying it wasn’t sure it could trust the latest budget numbers presented by staff.

Board members said they were also worried about whether voters would approve new construction borrowing and a parcel tax next year.

The board on June 26 considered rejecting the $568.9 million 2019-20 budget after directors said they lacked confidence in its accuracy. Board member Shanthi Gonzales said staff didn’t give the board enough details about department budgets, school budgets or even how many employees the district has, what they do and how much they earn.

“I don’t want to create more problems than we already have by not approving this budget,” she said. “But it’s a big problem that we don’t have the information we need.”

Board President Aimee Eng warned that the Alameda County Office of Education could still reject the district’s budget and may only be willing to give the district “conditional approval” until after the books are closed at the end of June for 2018-19.  She said a companion resolution — also approved — confirming the district’s commitment to fiscal solvency would force the board to make even more budget cuts in the future.

The board voted 6-1 to approve the budget, after Superintendent Kyla Johnson-Trammell said schools wouldn’t be able to start spending money for the new school year if it wasn’t approved. The district’s state trustee agreed, saying that district operations would come to “a screeching halt” if the board didn’t meet its June 30 budget approval deadline.

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Johnson-Trammell pointed out that the district has been working closely with the Alameda County Office of Education on improving its fiscal practices and has been searching for a new person to lead its fiscal department after the chief financial officer resigned in May.

“I do believe that the community deserves to see more detail, but our first order of business is actually to find a chief financial officer who’s going to be the right fit for our district,” she said. “We’ve struggled for over a decade to actually retain a chief financial officer.” She said the district has also struggled to develop reliable budgets and must do “a better job of trend analysis” and be able to “show the expenditures around staffing.”

Highlighting its precarious financial status, the board approved a resolution confirming its commitment to fiscal solvency, meaning it will not spend more than it has to pay its bills. To that end, the board committed itself to cutting an additional $10 million in 2020-21 and $10.5 million in 2021-22. It asked staff to bring back firmer budget numbers in August, reconciling projected revenues and expenditures, while also incorporating final changes based on the recently approved state budget for 2019-20.

Board member Jody London said she was concerned by the lack of funding for building maintenance, which she hoped could be added in August. Board member James Harris was the only one who voted against the budget and the fiscal solvency resolution, saying the numbers were “not reliable.”

The board also approved its Local Control and Accountability Plan, or LCAP , the district’s plan for how it will spend its state funding for all students, especially those who are low-income, English learners, foster youth  and homeless.  Several board members said they would like the district to do a better job of analyzing programs and services to ensure they are getting the best returns on investments.

Speakers from the community urged the board not to approve the budget,citing fiscal mismanagement that was outlined in the grand jury report.

Peter Truong, a program manager for the nonprofit Oakland Kids First organization, told the board that the report “highlights the irresponsibility of the district.”

He added: “Passing this budget does not address the bureaucratic bloat.”

The report released earlier last week alleged that “the district’s poor business practices and broken culture have greatly contributed to its financial instability.” It cited “self-interested decisions by mid-level staff and repeated breakdowns in the chain of command without anyone being held accountable,” which it said “has helped perpetuate all of this dysfunction.”

It said the district spent far more on management than neighboring districts in 2017-18, but less on actual classroom instruction and that “policies and procedures have fallen by the wayside and administrative staff who are frequently under trained in best practices make decisions that are not in the best interests of the district.”

Ben Tapscott, a former McClymonds High teacher and coach, blamed the board.

“You are the problem,” he said. “You can’t get the money under control. Other districts laugh at us. The grand jury said what we’ve been saying all along.”

Teacher Megan Bumpus, who is an officer for the teachers union, the Oakland Education Association, said the grand jury report also echoed many concerns raised by the union, which went on strike for seven days in February and March.

“We’re here because we care deeply about our schools and it’s clear from the grand jury report that not everyone currently involved in running our schools is acting in the best interests of our district,” she said. “With all the staff that’s walking away, who’s actually responsible for our students?”

Eng said the board would publicly respond to the grand jury within 90 days, as required. She said the grand jury report, which “takes a deep look” at the district’s facilities improvement programs, along with other topics, “is an important document that we take seriously.” She said the board would “review the report, identify any areas where we might disagree, and then prepare our formal response.”

“Coming out of an intense few years during which we wrestled with fiscal stresses including midyear budget cuts and an employee strike, this report raises important questions,” she added. “Many of the issues are familiar, but we will use this report to face these issues head on and improve how we operate.”

The grand jury report was based on eight complaints from people from “within the walls of OUSD,” as well as interviews with 21 witnesses including board members, district administrators, outside school district management experts, and current and former district employees. Grand jurors also watched video recordings of board meetings and spent hundreds of hours reviewing documents from the district, as well as other sources.

It found deficiencies in the district’s contracting practices and facilities management, board policies and actions, and management practices, along with a “broken culture.” It alleged the facilities department’s “failed stewardship of local taxpayer dollars over the past decade provides a clear example of the district’s inability to properly prioritize spending and produce results for the children of Oakland” due to “poor execution of construction projects, failure to take advantage of economies of scale, financially irresponsible policies and inconsistent use of financial controls.”

Oakland Unified members of the Service Employees International Union voice their concerns at the June 26 school board meeting.

Despite these findings, the board agreed to sell the last $175 million in bonds it has left over from its $475 million Measure J passed in 2012, after Tim White, deputy chief of facilities, said the program was about to start running a negative cash flow if new funds weren’t forthcoming.

To help train its fiscal staff in best practices, the district recently entered into an agreement with the Alameda County Office of Education for its fiscal and business departments. The training is helping the remaining finance department staff now that two fiscal officers have left the district.

Meanwhile, the district repeatedly delayed reporting to the county its cost calculations for its tentative agreement with its Service Employees International Union, or SEIU, which represents some non-certificated staff including clerks and campus security workers, prompting dozens of union members to protest during Wednesday’s board meeting. Although the board expects to take the month of July off, Eng promised the employees the board would hold a special meeting Tuesday to approve the contract.

The Oakland school board listens to a speaker during its June 26  meeting.

The board also asked White to hire a pollster to gauge community support for a new bond measure and parcel tax in 2020, noting that the grand jury report could result in lower bond ratings in the future, and might adversely affect voters’ willingness to pass new tax measures.

Editor’s Note: As a special project, EdSource is tracking developments this year in the Oakland Unified and West Contra Costa Unified School Districts as a way to illustrate some of the most urgent challenges facing many urban districts in California. West Contra Costa Unified includes Richmond, El Cerrito and several other East Bay communities.

Story originally published by EdSource.