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Butte County Office of Education

Butte County Office of Education. Chico Unified School District Board Presentation May 20, 2009. AB 1200 Fiscal Oversight. First level of oversight lies with CUSD board of trustees and their administration AB 1200 enacted in 1991

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Butte County Office of Education

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  1. Butte County Office of Education Chico Unified School District Board Presentation May 20, 2009

  2. AB 1200 Fiscal Oversight • First level of oversight lies with CUSD board of trustees and their administration • AB 1200 enacted in 1991 • Gave COE’s additional authority and responsibility regarding fiscal oversight over school districts • BCOE is to serve local education agencies by providing early management assistance and progressive intervention

  3. CUSD’s Current Budget Status • CUSD budget is certified as negative • A negative certification means the district “will not meet its financial obligations for the remainder of the current fiscal year or for the subsequent fiscal year”

  4. CUSD Budget Pressures • Approximately 92 - 94% of unrestricted budget is dedicated to salaries and benefits • Statewide averages are 85-90% • General fund encroachment • Unrestricted deficit spending • Declining enrollment in regular education and increasing enrollment in special education

  5. The Role of a Fiscal Advisor • Mrs. Sheila Vickers, Vice-President of School Services of California, assigned the role of fiscal advisor • Fiscal advisor works with the district to address its financial condition • BCOE and fiscal advisor meet with CUSD regularly to monitor the district’s progress

  6. CUSD Actions • CUSD board made substantial and difficult budget reductions for 08/09 • Other budget reductions have become necessary as a result of major cuts to education mid-year 08/09 and additional cuts for 09/10

  7. Adopted State Budget • Two year budget contains substantial cuts to education • One-time and ongoing solutions available for schools • One-time sweep of 07-08 restricted ending balances • Ongoing flexibility for 39 restricted programs for any educational purpose • Program and reporting requirements are met • Projected deficits in state budget • April revenue collections less than projections 1.4 billion • Legislative Analysts Office (LAO) estimating 8 billion dollar revenue shortfall in 08-09 • If ballot measures don’t pass additional 6 billion deficit created

  8. Federal Stimulus • Three pots of one-time money • Title I • IDEA (Special Education) • State Fiscal Stabilization Funds • Supplement, not supplant rules apply to Title I and IDEA • Federal MOE rule applies to IDEA

  9. Federal Stimulus Purpose • Purpose • Stimulate the economy in the short-term and invest in education and other essential public services to ensure the long term economic health of our nation

  10. Federal Stimulus – Special Education • Must be obligated by September 30, 2011 • Some possible uses • Obtain assistive technology devices • Professional development • Expand capacity to collect and use data • Expand placement options for preschoolers • Hire transition coordinators to develop job placement • New growth in special education expenditures

  11. Cash Flow • Tax Revenue Anticipation Note (TRAN)will offset expected cash shortages in 09/10 • Deficit spending in 09/10 has a negative impact in current and subsequent years • On-going expenditure reductions must be made so BCOE can approve short-term financing for 10/11

  12. State Takeover of School Districts • Loss of local control-board authority suspended • Appointment of state administrator-focus on fiscal solvency • Costly for the district-administrator, their staff and loan interest borne by the LEA • Loans are repaid over 20 years • Seven districts have needed a state loan since AB 1200 was enacted in 1991

  13. CUSD Opportunities • Use every tool provided by the state to address the negative financial status • Continue to work with the fiscal advisor to reduce expenditures • Use the one-time federal dollars in the most prudent manner • Continue to implement the Fiscal Recovery Plan

  14. Latest Issues • State budget deficit estimated at over $21 billion if propositions do not pass, per Governor’s May Revise released May 14th • Increased pressure on California’s cash flow with more deferrals proposed in the May Revise • ARRA requirement for California to spend on education the amount it did in 05/06 and if not must pay back all ARRA money

  15. The Future • Thank you for making the difficult decisions required to maintain local control of CUSD • National and state economic down-turn will make it difficult to fund education properly • More tough decisions are ahead • BCOE will continue to support CUSD as it works towards fiscal stabilization

  16. Questions?

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