August 29, 2007 OAKLAND UNIFIED SCHOOL DISTRICT 2007/08 Adoption Budget Update Dr. Kimberly Statham, State Administrator Leon Glaster, Interim Chief Financial Officer

2 Business Office Team Leads Terrie Williams, Executive Officer, Financial Services Pauline Follansbee, Controller Sandra Anderson-Knox, Financial Services Manager Mary Burke, Director State and Federal Compliance

3 Introduction Our charge is to have financial stability, accountability and a balanced budget while providing high standards of instruction and learning for every student in OUSD.

4 In order to guarantee long-term financial stability we must immediately develop a balanced budget process that will help us meet this objective. We must have absolute confidence in our data and establish an on- going budget plan that assures our success.

5 Specific directives to Interim CFO : Provide a detailed analysis of the recently submitted 2007/08 adoption budget. Establish a plan to correct our on- going structural deficit. Present a balanced budget by December, 2007.

6 Adoption Budget Information General Fund – June 30, 2007 Budget Category Preliminary June 5 Approved June 30 Difference Revenue250,059,000 $0 Expenditure 254,359,000251,505,000($2,854,000) Deficit 4,300,000 1,446,000(2,854,000)

7 Review and Adjustments The following information is the result of a Systematic detailed review of the reported data from the June 30 Adoption Budget. (Changes represent recalculations and/or readjustments)

8 Review and Adjustments contd Category [ major adjustments] Adoption Budget ( 6/30/07) Budget Update ( 8/29/07) Difference Certificated. Salaries [teacher subs, $1.1m; additional teachers, $.2m] 111,491,000112,835,0001,344,000 Classified Salaries [custodians.53m; classified subs.15m] 32,970,000 34,134,0001,164,000 Benefits [health ins.26m] 49,495,000 49,810, ,000 Books & Supplies [materials, (1.1m); equipment.5m] 8,502,000 8,029,000 (473,000) Services and Operating. [contractual services –technology.72m; OPD.1m] 21,418,000 22,405, ,000 Capital Outlay Buildings, equipment 623, ,000 47,000

9 Review and Adjustments contd Category [major adjustments] Adoption Budget ( 6/30/07) Budget Update ( 8/29/07) Difference Other Outgo 12,057,000 0 Indirect Support (8,079,000) (8,085,000) (6,000) Other Financing 23,028,000 0 TOTALS251,505,000254,789,000 3,284,000

10 Adoption Budget Comparisons CategoryPreliminary June 5 Approved (June 30) Update (August 29) Revenue 250,059,000 Expenditure 254,359, ,505, ,789,000 Deficit 4,300,000 1,446,000 4,730,000

11 Balanced Budget Plan The Balanced Budget Plan to be developed by the Strategy Team will serve as a road map that assures OUSDs long-term financial stability while supporting student achievement

12 The six District goals will continue to be the primary focus Budget reductions will be as far from the classroom as possible resulting in minimal negative impact. Continuous monitoring and measuring of progress in achieving our goals. Guiding Principles :

13 Develop a process to integrate our Results Based Budget (RBB) program with the IFAS financial system. Establish a budget development time line which provides clear direction for the District to complete the objective of long-term financial stability. Immediate Action Steps:

14 Preliminary Budget Development Timeline: Middle September – Present Unaudited Actual report. Information will provide final 2007/08 beginning fund balance numbers which will replace projected beginning fund balance. We will know how much money is in our savings account. Late September – Update RBB program using final 07/08 enrollment numbers. Provide site and central office with final budget allocations for current fiscal year. Integrate information with IFAS financial system.

15 Preliminary Budget Development Timeline Contd Late October – Strategy Team presents recommended budget reductions to decrease the $ 4.7 million deficit identified in the Adoption Budget update. Essential to successfully eliminating the structural deficit is the reduction of on-going budget expenses in appropriate categories which upholds the integrity of the districts goals.

16 Preliminary Budget Development Timeline Contd Early December – Provide a multi-year Balanced Budget Plan in which expenditures do not exceed revenues. Information will be presented as a part of the 2007/08 1 st Interim financial report. Early February – Load RBB for 2008/09 budget; key components include enrollment and revenue projections. Site and central office receive preliminary budget allocations for 2008/09.

17 Middle February - Conduct RBB training for site administrators and central office staff. Site administrators and central office develop specific budgets in RBB program based on allocations. Middle March – 2008/09 preliminary RBB budget is finalized. Upload to IFAS financial system. Present as a part of the 2007/08 2nd Interim financial report. Preliminary Budget Development Timeline Contd

18 End May – re-load the RBB budget using Governors May revise. Update site and central office adjustments. End May - provide site administrators and central office staff updated budget allocation for 2008/09 fiscal year. Integrate information with IFAS financial system. Present as a part of the 2007/08 3rd Interim financial report. Preliminary Budget Development Timeline Contd

19 Preliminary Budget Development Timeline Contd Middle June – Present balanced preliminary 2008/09 Adoption Budget. Make final adjustments and balance RBB and IFAS financial systems. Late June – Present final balanced 2008/09 multi-year budget for approval.

20 On-going Challenges Completion of 2005/06 audit from State Controllers Office, review preliminary audit findings Resolution of prior years audit findings with State Controllers Office Neutralization of charter school enrollment loss. Create document for potential special regulation for Revenue Limit loss.

21 Restoration of state-required 2% Reserve for Economic Uncertainties in the 2008/09 multi-year budget. Reauthorization of the Measure E parcel-tax. Review and analysis of small schools financial and programmatic impact on District. On-going Challenges contd

22 Revenue Enhancement Strategies Increase ADA percentage. 1% increase provides $2 million in additional annual revenue. Current ADA percentage = 93.52%. Expand MAA reimbursement program. Share revenue with school sites. Transition SBC/AT&T phone system from Centrex to Cal Net or similar system.

23 Revenue Enhancement Strategies Increase cost center revenue – nutrition services and copy center Procurement & purchasing expenditure controls Increase grant revenues to supplement general fund budget