IUSD Board of Education discusses state budget implications, certifies financial report


With IUSD projecting a shortfall of about $5.3 million for the next fiscal year, the Board of Education voted this week to certify the district’s latest financial report as “qualified,” meaning adjustments will be necessary to present a balanced budget in June.

John Fogarty, assistant superintendent of business services, said school districts are required to base their multi-year projections on the governor’s January budget proposal, which is heavily reliant on a November tax initiative. If that initiative is rejected by voters, public education would be reduced by $4.8 billion, or about $370 per student, according to Governor Jerry Brown’s plan. Including a proposed transportation cut, Irvine would lose approximately $11.5 million.

IUSD has taken proactive steps to blunt the impact of the potential reductions, including the implementation of a budget freeze and the suspension of deferred maintenance contributions. The district was also able to add to its reserves after cuts for the current year came in lower than expected. Using these onetime dollars to backfill the larger structural deficit, IUSD now faces a shortfall of approximately $5.3 million for 2012-13, Fogarty told the board.

California requires every school district to examine and certify its financial condition as “positive,” “qualified” or “negative” in financial reports that are submitted twice during each year. (First Interim Reports are filed in December and Second Interim Reports are submitted in March.) “Positive” is the ideal certification, signaling that a district will be able to meet its financial obligations for the current year and two subsequent years, while “qualified” indicates a district may not be able to meet its obligations without additional action. A district would file a “negative” certification if it was unable to balance its budget.

Fogarty expressed confidence that IUSD will be able to produce a balanced budget by the June 30 deadline after making the necessary reductions and adjustments. At the same time, he said, the state requires all districts to certify their Second Interim Reports based on current projections.

To read a PDF recap of Tuesday’s meeting, click here.