10/24/2019

Oakland schools in new mess over financial practices

The Oakland school district ignored standard accounting practices and inappropriately manipulated taxpayer funds, actions that in some cases amounted to the misuse of state or federal funding, according to a report by an independent state agency that provides fiscal oversight and support to schools.

The report by the Fiscal Crisis and Management Assistance Team, or FCMAT, comes as the Oakland Unified School District faces mounting financial woes, which include $5.8 million in imminent budget cuts as well as an estimated $20 million shortfall next year and $60 million the year after that.

The analysis found that not only does the district have an unsustainable spending problem, it has significant work to do to clean up the problematic accounting practices. Examples of the inappropriate use of funds included the use of its self-insurance fund to pay for parking and legal fees as well as the use of cafeteria accounts to make state loan payments.

The report identified a lack of basic accounting practices. In one case, the district inexplicably closed its fiscal year on June 30, 2017 with a cash balance that was nearly $450,000 higher than the cash balance reflected for the next day — July 1, the first day of the next fiscal year. The numbers should have been the same.

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