In its final six-month progress report on the Berkeley Unified School District, the Fiscal Crisis Management Assistance Team (FCMAT) praises the district for making what it called “good progress” in its operational areas, but says that the district “still faces significant fiscal challenges” and cautions that BUSD “will need to remain vigilant to avoid fiscal insolvency.”
The BUSD board will review the report at Wednesday’s regular board meeting. The board had been scheduled to conduct the review at its Aug. 24 meeting, but postponed it when the meeting ran overtime.
The meeting will be held at 7:30 p.m. at Old City Hall at 2134 Martin Luther King Jr. Way.
FCMAT is a state-funded organization set up by the Legislature to intervene and assist school districts facing severe financial difficulties. In recent years, the organization’s role has increased to encompass the monitoring of every aspect of school district operations.
The publication of the final FCMAT report on BUSD, which was released in July, ends the organization’s oversight of the district, which began during BUSD’s fiscal crisis in 2001. In that year, FCMAT was appointed by the Alameda County Office of Education as BUSD’s Fiscal Advisor, but that role ended last summer.
In the five areas in which FCMAT provides assessments, the organization noted steady improvement in BUSD’s operations. On a 1-10 scale, with 10 being the highest possible score, BUSD received final ratings of 7 in community relations/governance, 5.65 in personnel management, 6.08 in pupil achievement, 5.70 in financial management, and 6.47 in facilities management.
While all of these showed at least a one-point jump in assessment from July 2003 through July 2005, FCMAT said that BUSD’s greatest gains during that period were in financial management over the two year period, from 3.08 to 5.70.
In pointing out that BUSD “should continue to self-monitor its fiscal operations regularly,” however, FCMAT officials noted areas of concern that required specific district action. Some were controversial, others seemed difficult to achieve in a period of fiscal austerity.
• Noting that “a number of district programs significantly encroach upon the general fund,” FCMAT recommended that the practice be “curtailed.” FCMAT mentioned special education as the most “notable” encroachment.
• FCMAT noted “a high degree of turnover” in the district, “particularly in mid-management positions,” adding that “the superintendent administers the district with few cabinet-level administrators to provide support or to assume leadership roles.” FCMAT made no suggestions as to how the district might find money to add the new level of administrators, however.
• FCMAT said that BUSD needed to “continue its efforts to address several instructional issues,” including “reducing the achievement gap for minority students,” and “administering fair and equitable student discipline.”
• The organization suggested that BUSD “should consider providing a full-time informational systems administrator for its management information systems” so that the district could have “accurate information to make appropriate fiscal decisions.”
To continue its “measurable progress” in fiscal management, the FCMAT report also suggested that BUSD:
• Develop and distribute an internal control manual so that a clear understanding of district processes exists.
• Update budgets throughout the year. The report said that for the past several years the district has experienced what it called “significant differences” between its budget estimates and its actual audited amounts, saying that “if these large variances continue to occur annually, confidence in the budget data may begin to erode.”
• Do something about the continuing deficit in the food budget. FCMAT said that the food budget deficit will not stop “unless food restrictions are eased to permit the high school to serve a wider variety of foods, the campus is closed for lunch, or new innovative ways are found to increase revenues.” The report noted that “at this time, district administration does not consider any of these options feasible. FCMAT has concerns about the [food] fund’s large deficit and encroachment upon the general fund, but these concerns do not appear to be shared by the district.”
• Develop board policies for the management and oversight of student body funds. The report said that the Berkeley High School ASB advisor and bookkeeper “comprehend their duties and responsibilities and seem to understand and use the ASB Accounting Manual,” FCMAT added they “have not been provided with any board policies for guidance,” and that “without policies and guidelines, employees cannot be held accountable for their actions.”
• Closely monitor its first full year of self-insurance program for worker’s compensation “since the current activity will affect future rates.”