Oakland schools face high risk of fiscal insolvency
Oakland schools are at the highest risk of fiscal insolvency, its pattern of bad budgeting habits and unabated deficit spending resulting in significant instability, according to an independent fiscal analysisobtained by the Chronicle.
The conclusion reached by the Fiscal Crisis and Management Assistance Team, or FCMAT, contradicts months of upbeat messaging by Oakland school officials who have insisted the district’s finances are not only fine, but in fact something “worth celebrating.”
Among the biggest issues flagged by the analysis were deficit spending, insufficient reserves to address economic instability, lack of planning and monitoring of the budget as well as the approved labor agreements that lack a way to pay for them, according to the FCMAT report finalized this week.
The analysis, conducted in August, “identified significant concerns” related to financial management and the insufficient information used to support fiscal decision-making,” the study team found.
One of the biggest concerns is a budget promise to address a $40 million shortfall even though the school board and administration have provided no specifics on how they will do it, according to the report.
District officials did not address specific findings as requested by the Chronicle, but said in response that the FCMAT analysis is focused on deficiencies and doesn’t include improvements.
