2007-2008 1st Interim Financial Report Wednesday, December 12, 2007 every student. every classroom. every day. Financial Leadership Team • Vince Matthews – State Administrator • Leon Glaster – Chief Financial Officer • Roberta Saddler – Interim Controller • Jason Willis – Budget Director every student. every classroom. every day. 2 Financial Support Team • Sandra Anderson-Knox – Financial Services Manager • Waly Ndiaye – Financial Accountant II • Quyen Nyo – Financial Accountant II • Azeb Legesse – Financial Accountant I • Minh Co – Financial Accountant I • Michael Ezeh – Financial Accountant I • David Lewis – Financial Accountant I • Adan Hernandez – Accounting Technician, Receivables Billing every student. every classroom. every day. 3 Financial Support Team • Roxanne Dunn – Financial Services Associate II • Linda Wu – Financial Services Associate II • Katema Slocum – Financial Services Associate II • Diane O’Hara – Financial Services Associate I • Keisha Smith – Financial Services Associate I • Marla Williams – Financial Services Associate I every student. every classroom. every day. 4 Agenda • OUSD Enrollment Trends • General Fund Overview • California’s Economic & Fiscal Outlook • 1st Interim Financial Overview • Towards Fiscal Sustainability • Audit Findings / Cash Flow every student. every classroom. every day. 5 OUSD Enrollment Trends 55,000 Charter enrolled OUSD enrolled 50,000 45,000 40,000 35,000 30,000 25,000 20,000 2002-03 OUSD Charter OUSD Prior Yr Change 2003-04 2004-05 2005-06 2006-07 2007-08 Projected 2007-08 Actual 49,866 47,233 44,295 41,355 39,694 38,044 38,852 2,088 2,710 3,917 6,137 7,228 7,611 7,512 n/a (2,633) (2,938) (2,940) (1,661) (1,650) (842) every student. every classroom. every day. 6 General Fund Overview ($ in ,000s) Unrestricted Restricted Total Beginning Fund Balance $18,276K $30,560K $49,286K Revenue Limit $205,661K $11,462K $217,123K Other Revenue $48,901K $181,744K $230,645K $254,562K $193,206K $447,768K Salary & Benefits $194,944K $126,495K $321,439K Books & Supplies $8,476K $44,411K $52,887K Services & Operating $27,412K $62,473K $89,885K Outlay, Outgo, and Transfers $23,228K $(15,793K) $7,435K $254,680K $217,586K $472,266K $(121K) $(24,381K) $(24,499K) $18,158K $6,179K $24,337K Total Revenue Total Expenditures Net Increase/(Decrease) Ending Fund Balance every student. every classroom. every day. 7 General Fund Review Explanation of Major Changes to Unrestricted Budgeted Deficit as of 2007-08 Budget Adoption (June 2007) Revenue Additions/Restatements Budget Budget Increases $(1,446K) $5,883K $(6,955K) Budget Reductions $2,210K Transfer, Outgo, and Finance Changes $429K Budgeted Deficit as of 1st Interim (December 2007) $(121K) every student. every classroom. every day. 8 General Fund Review Explanation of Major Changes to Unrestricted Budget Increases Amount Funding for schools due to increased enrollment over projected $4,521,234 Support for Custodial Services to meet district goals $873,000 Risk Management legal and insurance costs $685,910 Additional equipment (custodial supplies) $325,000 Building and maintenance services $266,855 Parent and community engagement/Communication expenses $146,262 Re-established Board of Education expenses $136,600 TOTAL $6,954,861 every student. every classroom. every day. 9 General Fund Review Explanation of Major Changes to Unrestricted Revenue Additions/Restatements Revenue Limit Amount $4,917,000 AT&T reimbursement for overcharge $223,000 Chabot Science recognized revenue $743,000 Interest restatement $1,057,000 TOTAL $5,883,000 Budget Reductions Amount KIPP Oak Bridge school closing $947,000 Central Office salary and benefit savings $762,898 Transfer of self-insurance expense from Risk Mgmt to Facilities $500,000 TOTAL $2,209,898 every student. every classroom. every day. 10 California’s Economic & Fiscal Outlook Economy Projected to Slow into 2008 – Housing industry downturn due to sub-prime market collapse and pricing corrections – Continued increase in fuel prices (oil may break $100/barrel in coming months) – Weakening dollar compared to other currencies – Consumer spending expected to slow by almost one-third next year to 2.0% from 2.9% in 2007 Source: California Legislative Analyst’s Office, 2007, “California’s Fiscal Outlook: LAO Projections, 2008-09 through 2010-11”. every student. every classroom. every day. 11 1st Interim Financial Overview ($ in ,000s) Adult Child Education Development Beginning Fund Balance Nutrition Services Special Reserves $6,020K $1,987K $1,222K $31,221K Revenue $15,940K $23,806K $14,465K $1,208K Expenditure/ Source & Use $16,674K $23,936K $15,687K $3,303K Increase/ (Decrease) $(734K) $(130K) $(1,222K) $(2,095K) Ending Fund Balance $5,286K $1,857K $0K $29,126K every student. every classroom. every day. 12 1st Interim Financial Overview (cont.) ($ in ,000s) Beginning Fund Balance Revenue Expenditure/ Source-Use Increase/ (Decrease) Ending Fund Balance State Lease/ Purchase Deferred Maintenance Capital Facilities Bond Fund $3,611K $5,828K $9,266K $168,262K $130K $2,140K $5,369K $2,600K $0K $7,966K $3,544K $138,167K $130K $(5,826K) $1,825K $(135,567K) $3,741K $2K $1,825K $32,695K every student. every classroom. every day. 13 1st Interim Financial Overview (cont.) ($ in ,000s) State Facility Bond Interest Tax Override Self Insurance Beginning Fund Balance $7,583K $15,885K $0 $7,409K Revenue $1,090K $11,541K $26K $18,947K $0 $23,245K $4K $15,510K Increase/ (Decrease) $1,090K $(11,703K) $22K $3,437K Ending Fund Balance $8,673K $4,182K $22K $10,846K Expenditure/ Source-Use every student. every classroom. every day. 14 Towards Fiscal Sustainability Unrestricted Gen’l Fund Budget Projections ($ in 000’s) Unrestricted General Fund 1st Interim 2008-09 Projected 2009-10 Projected $18,276K $18,158K $18,771K Revenues $254,562K $256,994K $259,205K Expenses $254,680K $256,384K $258,878K $(121K) $610K $327K $18,158K $18,771K $19,097K Beginning Fund Balance Net Increase/ (Decrease) Ending Fund Balance every student. every classroom. every day. 15 Towards Fiscal Sustainability Restricted Gen’l Fund Budget Projections ($ in 000’s) Restricted (Categorical) 1st Interim 2008-09 Projected 2009-10 Projected $30,560K $6,180K $6,844K Revenues $193,206K $202,048K $199,804K Expenses $244,101K $201,384K $199,967K Net Increase/ (Decrease) $(24,380K) $664K $107K $6,180K $6,844K $6,951K Beginning Fund Balance Ending Fund Balance every student. every classroom. every day. 16 Towards Fiscal Sustainability Despite our progress towards a balanced budget in 200708, we must continue to implement strategies to achieve and maintain financial solvency. Some of these include: – Hiring control process on Central Office positions funded from General Purpose dollars; – Full funding to cover substitute teachers at school sites; – Change in Custodial Services model to increase quality and efficiency; – Implement and maintain cost control of consultants through guidelines and ranges for hourly charge released this fall. every student. every classroom. every day. 17 Parcel Tax Impact • 2007-08 is the last allocation year for current parcel tax (Measure E): $20,000,000 • In February 2008 Measure G will be brought before voters. every student. every classroom. every day. 18 Audit Findings Update ($ in 000’s) Audit Year Questioned Resolved Resolution Potential Costs Questioned In-Progress Audit Costs Liability 2002-03 33,562,272 32,608,147 300,000 654,125 2003-04 7,457,075 6,570,046 571,041 315,988 2004-05 8,768,884 -0- 8,768,884 TBD 2005-06 2,950,727 -0- 2,950,727 TBD 2006-07 Audit to Start in January 2008 -0- TBD TBD Totals 52,738,958 39,178,193 TBD TBD every student. every classroom. every day. 19 Cash Flow Analysis Actual Cash Balance Beginning Cash Total Receipts Total Disbursements A/R & A/P Net Ending Cash July 2007 August 2007 September 2007 October 2007 November 2007 54,050,827 31,231,404 31,732,961 21,886,559 62,797,907 131,965 12,002,807 19,636,455 77,684,756 5,055,811 (10,591,998) (13,367,625) (34,689,625) (39,044,886) (36,940,530) (12,359,390) 1,866,375 5,206,768 2,271,478 (1,221,707) 31,231,404 31,732,961 21,886,559 62,797,907 32,134,295 every student. every classroom. every day. 20