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This month, the Oakland Unified School District school board is being tasked with making nearly $50 million in budget cuts for the upcoming school year. To help our readers better understand that process, The Oaklandside set out to answer some important questions about how schools are funded, how OUSD currently spends its money, and some of the factors that have contributed to OUSD’s current situation. We’ve also included several resources at the bottom of this article that community members can use to examine the district’s finances on their own.
How OUSD and other California schools are funded
The Local Control Funding Formula (LCFF) fundamentally changed the way California schools receive money when it was passed in 2013 by the California legislature. Every district, including Oakland Unified, receives a “base grant” from the state that’s determined by average daily attendance at high schools, middle schools, and elementary schools. Districts also receive supplemental funding based on the number of “high needs” students attending schools in their district, as defined by the state: English learners, low-income students (those who qualify for free or reduced price lunch), homeless students, and children in foster care. Finally, districts like Oakland Unified, where more than 55% of students fall into those targeted categories, receive additional funds called “concentration grants.”
EdSource, a news outlet focused on education coverage in California, has an in-depth guide to LCFF and how it works.
On top of LCFF funding, OUSD also receives federal funding, like Title I, which the government provides to schools with higher numbers of low-income students, as well as funding from local tax measures, and philanthropic grants. But the majority of the district’s revenue comes from the state.
OUSD’s general fund revenues are split into two categories: restricted funds, which have specific uses (these include Title I, parcel taxes, and philanthropic grants), and unrestricted funds, which schools can spend on various needs. The LCFF dollars, which go towards salaries, books and supplies, supporting high-needs students, and other costs, are unrestricted. There are also several smaller “ancillary funds” that fall outside of the general fund and which are for very specific purposes like adult education, student nutrition, self-insurance, buildings, and others, but the general fund is the most important because OUSD has the most discretion over how these dollars are spent and is where the school board will be looking to make cuts this month.
Every academic year, OUSD staff have to prepare at least two interim budget reports to present to the school board and submit to the Alameda County Office of Education for approval. In December, when OUSD Chief Business Officer Lisa Grant-Dawson presented the first interim budget report for the 2021-2022 school year, the district’s total revenues in the general fund were about $748 million, split between $425 million in the unrestricted fund and $323 million in restricted funds. Expenditures totaled $746 million, or $320 million in the unrestricted fund and $426 million in the restricted budget.
When does OUSD have to finalize its budget?
The school board usually spends the spring semester developing the budget for the following school year, before approving a final budget in June. Because of years of financial instability, trustee Luz Cázares with the Alameda County Office of Education has additional oversight of the budget, and can veto any budgetary decisions the school board makes if she believes it would imperil the district’s finances. County Superintendent L.K. Monroe also has a role in ensuring that OUSD remains fiscally solvent, and in November she told the board that she would be bringing enhanced oversight to the district and gave a Jan. 31 deadline for OUSD to make significant cuts in the 2022-2023 budget. The school board is expected to vote on those cuts at its Jan. 26 meeting in order to submit them to the county by the deadline.
Why is OUSD facing a deficit next year?
Because attendance has been lower this year than in previous years. Attendance rates in OUSD generally hover around 94% in normal years, but this year it’s around 90%. Chronic absenteeism, when a student is absent more than 10% of the time (18 days in a school year, or about two days per month) has increased this year, from about 17% of students during the 2019-2020 school year to 34% of students this year. COVID cases among students, quarantine policies that require students to stay home if they have symptoms or have been exposed, and parents keeping their students home when they aren’t required to, have all contributed to the absentee rates.
For the past two years, California used attendance numbers from the 2019-2020 school year to calculate state funding for districts, but will revert to using current numbers to determine allocations for 2022-2023 school year.
Oakland Unified’s finance department has projected that unrestricted revenues will fall to $403 million next school year, and be around $417 million the following year. OUSD leaders have made it clear that raising compensation for all staff is a priority, which means that expenditures could also rise as revenues fall.
But OUSD is not alone in battling increasing absence rates among students, and many districts across California could face similar deficits. A state assemblymember introduced a bill last week that would allow districts to continue to receive funding based on attendance rates from the 2019-2020 school year, the last school year that had mostly in-person learning.
Where’s the COVID-relief funding?
In total, Oakland Unified expects to receive about $283 million in one-time funding from various COVID relief bills. But that money doesn’t get deposited all at once, has very specific strings attached, and money not spent will expire by 2024. OUSD has plans to spend the funds over the next two years, and much of it has already been committed to future budgets.
OUSD spent $65 million of these one-time funds during the 2020-2021 school year to help adjust to remote learning, on things like additional Chromebooks, professional development for teachers and administrators, stipends for staff taking on additional safety roles, and expanding technology platforms like Zoom. The money also went to tutoring, summer school, mental health programs, and other support for students. You can learn more about how the district spent this money in its Learning Continuity and Accountability Plan for the 2020-2021 school year.
During the current 2021-2022 school year, OUSD committed $100 million more in COVID-relief funding to academic supports, safety measures, and staffing, according to a September report. Specific expenditures included Saturday school, summer learning, mental health and restorative justice programs, credit recovery options for students who are close to graduating, and investments in literacy support, like paraeducators and reading tutors. The district spent another $11 million this year responding to safety concerns, on things like increased COVID testing.
An additional $94 million is planned to be spent through 2024, on expenses such as reading tutors, new positions for community school managers, mental health services, training for teachers and staff, and COVID testing and PPE.
About $12 million in COVID-relief funds hasn’t yet been allocated, and will expire by 2024 if not used.
What about the state loan?
In 2003, Oakland Unified was at risk of financial insolvency and was taken over by the state. A state administrator was appointed and the district was loaned $100 million from the state. Since then, OUSD has been making payments on that loan of about $6 million per year. The county trustee Cázares will remain in her position, and the district will remain under enhanced oversight until it pays off the loan and passes a financial audit.
In December, the school board voted to set aside about $22 million from the general fund to be reserved for paying off the loan. Board members did this to remove the ongoing expense of the loan payments from future budgets.
Dashboards and other resources
Staffing costs: This OUSD dashboard shows how much the school district has spent on staffing over the past nine years, including on salaries, benefits, and other compensation like retirement benefits and payroll taxes. For the 2021-2022 school year, OUSD employed 4,755 people, which cost roughly $468 million. You can select different options from the drop down menus to specify management or non-management positions to compare those costs, and various panels show where those staff are employed: at school sites, at the central office, or across the district. This dashboard also compares staffing levels to student attendance, showing that since 2014, attendance has fallen about 10%, while staffing has increased by about 14%. Alameda County Superintendent Monroe has pointed out this discrepancy as one of her concerns.
Consultant expenditures: Critics of OUSD’s practices often point to what they consider overspending on “consultants,” or the district’s practice of contracting with outside agencies for services, such as contracting with a community organization for afterschool programs, or professional organizations to provide staff training. Those critiques prompted the district to publish its consultant expenditure dashboard. On this site, you can see exactly how those costs break down, which organizations have contracts with OUSD, and whether the money comes from the restricted or unrestricted fund. You can also examine spending by school site, and compare expenditures over the last few years.
Central office spending: OpenOUSD is a volunteer-run website that provides analysis and breakdowns of how Oakland Unified spends money at the central office. Central office programs are those that aren’t run from school sites but are managed at the central district level, like custodial staffing, buildings and facilities, nutrition, sports, human resources, transportation, and others. On the OpenOUSD site you can see funding sources, like federal, state, and philanthropy, and how that money is spent. You can also get a detailed look at central office programs, their staffing, and see how budgets have changed over the past few years. For example, for the 2020-2021 school year, OUSD employed 44 people in its health services department, including 37 nurses, along with health assistants, aides, and a program manager. That department spent about $5.2 million that year, about a million dollars more than the previous year.
Ed-Data: This site is a partnership between California’s Department of Education, EdSource, and FCMAT, a state fiscal service agency, and has financial data going back to the 2009-2010 school year. You can compare OUSD’s revenues and expenditures with statewide averages up until the 2019-2020 school year. Because it’s a statewide database, you can also select up to three additional districts to see how they compare.
Budget and finance committee meetings: This committee, which has three school board members on it, meets once a month to discuss budget topics in more depth than at school board meetings. Reports and presentations from the district’s finance department often come to the budget and finance committee first, before being presented to the entire board, and the meetings are an opportunity for the public to have their questions answered about OUSD’s finances. The next budget and finance committee meeting is Thursday, Jan. 13 at 6 p.m. Meetings are held over Zoom, and meeting agendas are posted online at least three days in advance.