Tensions flared at Thursday’s Oakland Unified School District Board of Directors meeting when a state agency’s presentation suggested the district is at high risk of fiscal insolvency.

At the meeting, the board heard from the Fiscal Crisis and Management Assistance Team, an independent state agency that provides management assistance and fiscal crisis intervention to local educational agencies.

FCMAT conducted a fiscal health risk analysis of OUSD suggesting that leadership changes, inadequate budget monitoring, and unreliable financial reporting and management were among factors that put the district at risk of insolvency.

“The district’s financial report narratives do not clearly communicate major budget changes applied at each reporting period,” said Andrea Ward, one of the intervention specialists at FCMAT who conducted the risk analysis. “The district should consider developing and sharing additional financial information.”

OUSD has struggled with financial woes for decades.

The district went under state control in 2003 after reaching fiscal insolvency and taking an emergency $100 million loan from the state, the largest school bailout in California history. The district spent the next six years governed by state-appointed administrators instead of school board-appointed superintendents.

In 2009, the district was allowed to appoint superintendents but remained under state fiscal oversight until the final payments on the loan were made in 2025.

In July 2025, the district emerged from state oversight, but the crisis was far from over.

Heading into 2026, OUSD faced a massive $100 million structural deficit driven by declining enrollment and expired pandemic funds.

In January, Superintendent Denise Saddler announced that an outside team of experts helped the board find $50 million in savings, halving the deficit.

Financial plan at odds with actual budget

As part of these proposed cuts, the board approved a proposal in February to lay off around 400 workers, expected to save around $11 million in the current fiscal year.

In April, the Alameda County superintendent of schools issued an official note of going concern for OUSD; in other words, the county officially expressed doubts about the district’s long-term fiscal health.

This notice prompted the FCMAT to conduct its review, based on the district’s available financial documents from the years 2025-2026 and 2026-27.

Now, FCMAT’s report has revealed that in addition to issues like high staffing costs and compliance irregularities in collective bargaining agreements, there are discrepancies between the district’s financial plan and the adopted budget.

“There’s no way to reconcile the two,” said Megan Reilly, CEO of FCMAT. “That reconciliation thread, if you can’t track it, how do you know where you stand?”

“These are things that I have been saying for a year now: no narrative with the second interim report, no coherence with the fiscal solvency plan. That’s how bad it actually has gotten here.”
OUSD Director Mike Hutchinson

Directors Mike Hutchinson, Clifford Thompson, and Patrice Berry expressed concern after receiving the presentation.

Hutchinson — who lost his seat in last week’s election — criticized his board colleagues, whom he alleged discredited the report, which was published on Oct. 29.

“These are things that I have been saying for a year now: no narrative with the second interim report, no coherence with the fiscal solvency plan,” Hutchinson said, referring to the different financial documents the district is required to compile every year. “That’s how bad it actually has gotten here.”

Hutchinson also expressed his dissatisfaction with the board pushing the FCMAT presentation back several hours, when it was scheduled to be one of the first items on the agenda for Thursday’s meeting.

Misplaced blame?

In contrast, Directors VanCedric Williams and Valarie Bachelor criticized the FCMAT presentation.

They said that the report wrongly assigns blame to the current leadership without adequately considering the upheavals caused by the change in leadership in 2025.

In that year alone, personnel changes included two new board directors, a new board president and vice president, and a new superintendent.

“It’s up to you to take this report for what it is,” Reilly said in response to the criticism. “I would not put words in our mouth in what we are trying to report.”

“We are not telling you how to fix the budget,” she added. “If you want to blame past leadership, fix it.”