Page One

In a special budget workshop Monday night, Alameda County education officials told the Berkeley school board that its 2001-2002 budget will probably not be approved by the state due to a number of errors and inconsistencies. 

“We wanted to make sure that the board understands the seriousness of (the situation),” said Mike Lenahan, county associate superintendent for business services, in an interview Tuesday. 

Lenahan said the budget information provided to the county by the district is so limited and problematic that it is impossible to tell if the district is bankrupt, breaking even or running a surplus. 

Under the state education code, the county office of education will give the Berkeley school district until Sept. 8 to revise its budget before making a recommendation to the state on whether or not the budget should be approved. But Berkeley Superintendent of Schools Michele Lawrence said Tuesday that the deadline simply cannot be met because of continuing problems with the district’s budget information. 

Lawrence said the state is unlikely to approve the district’s budget, which would trigger the intervention of a panel of experts appointed by State Superintendent of Schools Delaine Easton. But far from representing the end of the world, Lawrence said such intervention is something the Berkeley school board and community should welcome. 

“If this is going to happen, then it’s certainly good that it’s happening now, so we can really do an in-depth analysis and not continue to limp along with speculations,” Lawrence said. 

Depending on who you ask, the problems with the district’s budget information are traced to a history of poor record keeping, turn over in the business office, continuing computer woes, or a deadly combination of all three. 

In the Berkeley school district, Y2K struck with a vengeance, even if it wasn’t at the stroke of midnight New Year’s Eve. When district staff told a computer to tally expenditures carried over from the 1999-2000 budget to the 2000-2001 budget last summer, the computer couldn’t process the code references to the year 2000. The error resulted in a horrendous jumbling of data that the district’s business staff have been struggling to untangle ever since.  

Board of Education President Terry Doran said Monday that consultants working with the district to fix the problem say it could be another full year before it’s completely resolved.  

Part of the problem, according to Jerry Kurr, one of the consultants helping the district, is that the district lost its in-house software engineer around the time of the Y2K problem. This put them in the position of having to hire a contractor to come in to study the software system and, in essence, tell them how it worked. 

The situation has been further complicated this month by the departure of district Associate Superintendent for Support Services Cathy James. After 11 years in the district, James was the reigning expert on district finances. 

Superintendent Lawrence told the school board Monday that one of the things the district will need to do to avoid a repeat of its current situation is to institute cross-training so that critical expertise about district operations never comes to reside with one individual alone. Otherwise, Lawrence said, “that person wins the lottery and leaves and you’re up the creek.” 

Lawrence said part of the short-term solution to the district’s budgeting woes will also be getting the manpower in place in the business office to do data entry and other work needed to re-assemble reliable accounting information.  

In the long term, however, Lawrence said the district must move to put policies and systems in place that help clean up the whole budgeting process. 

The district must do more to keep accurate attendance records, Lawrence said Monday, since its state education funding is based on attendance statistics. 

“That’s our bread and butter, and we’re pretty lax in that area,” Lawrence said. 

Another problem, said Lawrence, is a tendency the Berkeley school board has to overspend, in part because it reacts to political arguments for program funding on a case-by-case basis. Instead, Lawrence said, the board needs to create clear, top-down priorities that guide how the district’s money is spent from year to year. 

In a remark that drew applause from the public gathered at Monday’s budget meeting, Lawrence said the district needs to create more accountability for employees, both to boost moral and to make sure that important work is done on a timely basis. 

“There are far too many people who aren’t celebrated for their achievement, nor are they documented for their deficiencies,” Lawrence said. 

Lawrence said she will see that every district employee is given an evaluation by the end of this year, unless prohibited by contract. 

Although some were dismayed by the condition of the school district budget, as revealed at the Monday night meeting, both the school board and members of the public seemed ready to accept Lawrence’s argument that the situation should be viewed as an opportunity. 

Board Director John Selawsky said Monday that he’s been worried about the quality of the district’s budget since he came on the board almost a year ago. “It’s troubled me to no end. And I am really, really gratified that it’s being addressed here,” Selawsky said. 

“I believe we can get this resolved, and we will get this resolved,” he added. 

Board president Terry Doran said he was surprised by the seriousness of the district’s budget problems, as they were presented Monday. 

“From my point of view, it’s a tremendous amount to digest,” he said. “It’s alarming.” 

Doran said the board has been struggling with problems in the district’s budget office for over a year and he had hoped to see the situation resolved by now. 

“I really believe that, as a board, we did respond to many problems that were brought to us by our staff,” Doran said after the meeting. “It’s just that we, in hindsight, were overly optimistic.” 

According to the county officials, there is a possibility that the district will discover in the months ahead, after pulling together more accurate budget information, that it is several million dollars in the hole. If that’s the case, the school board could end this year much as it began it – figuring out how to make program cuts to balance the books. 

This was a gloomy prospect for many in the audience Monday. 

“If it turns out our balance was lower that we thought when we made all those hard cuts (in the spring), then we have to make more hard cuts,” said Nancy Riddle, a member of a citizen advisory committee on the district’s budget and the chief financial officer for Monster Cable Products. 

“We’re not going to find out about them until pretty far in the year, and that’s pretty scary,” Riddle added.