Hacienda La Puente Unified School District

Transcription

1 Hacienda La Puente Unified School District Fiscal Review April 12, 27 Joel D. Montero Chief Executive Officer

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3 April 12, 27 Dr. Barbara Nakaoka, Superintendent East Gale Avenue City of Industry, California Dear Superintendent Nakaoka, In March 26, the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for a fiscal review with the. The request specified that FCMAT would: 1. Conduct a review of the district s 25-6 second interim financial report for all the general fund, adult education and child development funds including revenue, expenditure, and ADA/enrollment information. 2. Prepare a general fund multiyear financial forecast to identify the district s financial position in 26-7 and 27-8 if enrollment continues to decline and no changes other than statutory COLA, step and column, and consumer price index trends are applied. 3. Determine the current level of risk to the district s fiscal health using the FCMAT Fiscal Health Risk Analysis model. The attached final report contains the study team s findings with regard to the above areas of review. We appreciate the opportunity to serve you, and we extend our thanks to all the staff of the. Sincerely, Joel D. Montero, Chief Executive Officer Fiscal Crisis and Management Assistance Team FCMAT Joel D. Montero, Chief Executive Officer th Street - CITY CENTRE, Bakersfield, CA Telephone Fax Petaluma Blvd North, Suite. C, Petaluma, CA Telephone: Fax: Administrative Agent: Larry E. Reider - Office of Kern County Superintendent of Schools

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5 TABLE OF CONTENTS i Table of Contents Foreword...iii Introduction... 1 Study Guidelines... 1 Study Team... 2 Executive Summary... 5 Findings and Recommendations... 9 Declining Enrollment and Budget Reductions...9 Communication...11 Budget Development and Oversight...12 Position Control and Staffi ng...16 Categorical Programs and Special Education...17 Multiyear Financial Projection...21 Fiscal Health Risk Analysis...29 Appendices...43

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7 FOREWORD iii Foreword FCMAT Background The Fiscal Crisis and Management Assistance Team (FCMAT) was created by legislation in accordance with Assembly Bill 12 in 1992 as a service to assist local educational agencies in complying with fiscal accountability standards. AB 12 was established from a need to ensure that local educational agencies throughout California were adequately prepared to meet and sustain their financial obligations. AB 12 is also a statewide plan for county offices of education and school districts to work together on a local level to improve fiscal procedures and accountability standards. The legislation expanded the role of the county office in monitoring school districts under certain fiscal constraints to ensure these districts could meet their financial commitments on a multiyear basis. AB 2756 provides specific responsibilities to FCMAT with regard to districts that have received emergency state loans. These include comprehensive assessments in five major operational areas and periodic reports that identify the district s progress on the improvement plans Since 1992, FCMAT has been engaged to perform more than 6 reviews for local educational agencies, including school districts, county offices of education, charter schools and community colleges. Services range from fiscal crisis intervention to management review and assistance. FCMAT also provides professional development training. The Kern County Superintendent of Schools is the administrative agent for FCMAT. The agency is guided under the leadership of Joel D. Montero, Chief Executive Officer, with funding derived through appropriations in the state budget and a modest fee schedule for charges to requesting agencies. Total Number of Studies Total Number of Districts in CA Management Assistance (94.59%) Fiscal Crisis/Emergency (5.41%) Note: Some districts had multiple studies. Districts (7) that have received emergency loans from the state. (Rev. 2/7/7) Study Agreements by Fiscal Year Number of Studies /93 93/94 94/95 95/96 96/97 97/98 98/99 99/ /1 1/2 2/3 3/4 4/5 5/6 6/7 Projected Hacienda La Puente Unifi ed School District

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9 INTRODUCTION 1 Introduction The (HLPUSD), located in the Los Angeles County community of La Puente, serves a diversified population of approximately 25, pre-kindergarten through twelfth grade students and 3, adult students living in the communities of La Puente, Hacienda Heights, and portions of Valinda and West Covina. The district also provides instructional services for one of the largest correctional programs in the nation. It is comprised of four comprehensive high schools, one alternative high school, one community day school, 2 K-5 elementary schools, four K-8 schools, six middle schools, one specialized orthopedic program for special needs students, and numerous child development and preschool programs. The large adult education program operates in over 32 satellite facilities. In spring 26, the district contacted the Fiscal Crisis and Management Assistance Team (FCMAT) requesting a management review of the budget and budgeting process after discovering that a budget shortfall was imminent due to deficit spending brought about mainly because of declining enrollment that had not been discovered in a timely manner. FCMAT was initially asked to perform services related to the 25-6 financial records after approval of the study agreement. The study agreement is attached as Appendix A to this report. The scope and objectives of this study are to: 1. Conduct a review of the district s second interim financial report for all funds including revenue, expenditure, and ADA/enrollment information. 2. Prepare a general fund multiyear financial forecast to identify the district s financial position in 26-7 and 27-8 if enrollment continues to decline and no changes other than statutory COLA, step and column, and Consumer Price Index (CPI) trends are applied. 3. Determine the current level of risk to the district s fiscal health using the FCMAT Fiscal Health Risk Analysis model. The scope of the study changed slightly after FCMAT s initial visit because the district s data was not in a format that could be used to prepare the multiyear projection. This matter will be discussed further in another section of this report. Hacienda La Puente Unifi ed School District

10 2 INTRODUCTION Study Team The FCMAT study team was composed of the following members: Michele McClowry Fiscal Intervention Specialist Fiscal Crisis and Management Assistance Team La Verne, California Carleen Wing Chandler FCMAT Fiscal Consultant San Juan Capistrano, California Margaret Rosales FCMAT Fiscal Consultant Kingsburg, California Laura Haywood Public Information Specialist Fiscal Crisis and Management Assistance Team Bakersfield, California Study Guidelines FCMAT consultants visited the district on several occasions to conduct interviews, collect data and review documentation. This report is the result of those activities. Findings and recommendations are presented in the following sections: Executive Summary Background Findings and Recommendations o Declining Enrollment and Budget Reductions o Communication o Budget Development and Oversight o Position Control and Staffing o Categorical Programs and Special Education Multiyear Financial Projection Fiscal Health Risk Analysis FCMAT first visited the district in March 26 to begin the study. The study team was asked to prepare a multiyear projection (MYP) based on the district s working budget as of the 25-6 second interim report. The MYP could not be completed at that time because some of the data in the second interim report had not been updated. The MYP process requires uploading budget information from a mainframe computer system into a software program, assuming that all budget line items are complete and accurate. The base data was deemed incomplete when various test assumptions did not produce plausible data. This situation was discussed with the district administration on March 22, 26, and it was mutually decided to adjust the study agreement and postpone the preparation of the multiyear projections for a few weeks to allow the district time to review all of the budget line items in question. It should be noted that the major budget components were deemed reasonable; it was specific line item detail that, when uploaded, was found to be incomplete. Fiscal Crisis & Management Assistance Team

11 INTRODUCTION 3 During the initial visit, FCMAT also reviewed records, interviewed employees, examined numerous financial reports, and gathered other pertinent information to meet the objectives of the study agreement. The team was able to complete an analysis of the budgeting process and make other useful observations to help the district improve operations and move forward with making the budget reductions that were necessary to remain fiscally solvent. It was decided at that March 22 meeting that FCMAT would issue a management letter describing the preliminary findings and recommendations. The full text of that management letter is included as Appendix B to this report. FCMAT returned to the district for the second time in June 26. By that time the district had completed the second interim report and also issued a third interim report to inform the community, employees and the Los Angeles County Office of Education (LACOE) of the current budget status and project the ending balance for However, the data in the mainframe computer system still could not be uploaded into the FCMAT MYP software program. Since the year was almost over, FCMAT met with the district s administration on June 14, 26 and it was once again mutually agreed that preparing the MYP would be postponed until late August, after the 25-6 accounting records were closed, the state-required SACS unaudited actual documents were finalized, and the 26-7 budget was approved by LACOE. The 26-7 adopted budget would then become the base year for the multiyear projections rather than the 25-6 second interim projected budget. A second management letter was sent to the district dated July 19, 26, summarizing the context of this meeting. The full text of the second management letter is included as Appendix C to this report. FCMAT returned for the third time on August 21 and 22, 26, just prior to the departure of the former Assistant Superintendent of Business. Once again, FCMAT found that the data in the district s financial system was not in pristine condition, but with certain assumptions and adjustments made by FCMAT, the MYP could be prepared. The multiyear financial projection included in this report is based on the financial data that was available in August 26. A third management letter summarizing FCMAT s progress at this point in time was issued on August 6, 26. The full text of that letter is included as Appendix D to this report. In January 27, FCMAT again met with district staff to gather as much information as possible as to the current financial status of the district. This information included review of the 26-7 first interim report and the 25-6 financial audit report. It was reported to FCMAT that the district recently settled negotiations at 4% for all bargaining groups, but the cost of this settlement was not included in the district s 26-7 first interim report. Hacienda La Puente Unifi ed School District

12 4 INTRODUCTION Fiscal Crisis & Management Assistance Team

13 EXECUTIVE SUMMARY 5 Executive Summary As with nearly half of all California school districts, the Hacienda La Puente USD has experienced significant declining enrollment over the past few years, forcing the district to make significant budget reductions in 25-6 and Enrollment and ADA must be carefully monitored monthly. Staffing should be adjusted as enrollment numbers change. FCMAT was asked to review the budget development process and prepare a multiyear projection to help the board and administration determine the accuracy of the budget and the reductions necessary to remain fiscally solvent. Due to several unforeseen circumstances related to the condition of the data in the financial system, FCMAT visited the district on three different occasions between March and August 26 to gather and process the information for the multiyear projection. The district administration and board implemented over $3 million in cuts in 25-6 and another $5.7 million in Because of these aggressive actions, the FCMAT MYP indicates that the district will adhere to the AB12 requirements to meet its financial obligations in the current and two subsequent years. However, this FCMAT MYP was prepared prior to the district s recent negotiations settlement of 4% with all bargaining units. FCMAT returned to the district again in January 27 to review the 25-6 audit report and the 26-7 first interim report, but the interim report did not include the cost of the negotiation settlement in the district-prepared multiyear projections. FCMAT identified several areas where the district could make changes to improve communication, keep key district stakeholders better informed, and improve overall operations. Most of the employees interviewed by FCMAT expressed that they were caught completely by surprise when the administration announced that major cuts would be necessary. The district should implement procedures to keep employees and the community informed. Regular meetings, newsletters, and the district Web site are ways to achieve this goal. Principals and department managers state that they are not involved in the budgeting process. Continuing to utilize the budget committee, making regular board presentations, discussing budget issues at management meetings, and working with managers to develop budgets for their sites will address that concern. One of the most important budget monitoring tools is a fully integrated position control system to track and control employee salaries and benefits. The district s position control system is manual and is not integrated between human resources, payroll and the budgeting process. Budget preparation and monitoring rest almost entirely with the Director of Fiscal Services, whose workload is overwhelming. The district risks the chance of errors and untimely budget updates because the position control system is not totally reli- Hacienda La Puente Unifi ed School District

14 6 EXECUTIVE SUMMARY able and most of the responsibility is assigned to one person. Staffing ratios should be developed and followed to ensure fairness and prevent overstaffing and overspending. Evaluating and monitoring the assignments of special education instructional assistants may yield some savings. The district uses multiple software systems, the in-house Business Operating Support System (BOSS) and the LACOE PeopleSoft and human resources systems for payroll, which flows directly into the PeopleSoft system but not into BOSS. Agencies using multiple systems must constantly reconcile the data to maintain financial integrity and reliable records. FCMAT could not verify the accuracy of the data in either system because the reports did not match. The use of multiple computer systems creates a duplication of work for the Human Resources and Business departments. The district s Business Office does not have a process for reconciling the data in the two systems until the year-end closing of the financial records. The district receives considerable categorical funding each year. There has been a historical pattern of carrying over a large portion of the categorical funds each year. Better planning to use the categorical funds more effectively may help ease the burden on the unrestricted general fund. The 25-6 year end actual financial report yielded a much larger ending balance than the administration had projected in the interim reports. The board should be kept informed monthly of the status of the budget, especially during times when the budget is under scrutiny by the community and employee bargaining groups. The district consistently meets the statutory requirements of preparing and submitting the budget for adoption and the interim reports on time, but beginning a monthly budget revision cycle would help to project a more accurate ending balance and facilitate better planning during the budget development cycle each year. Fiscal Crisis & Management Assistance Team

15 BACKGROUND 7 Background The district s once-large reserve balance of $25 million dwindled over several years and has been used to cover the deficiencies between revenues and expenditures. Until the recent budget reductions were implemented, the district continued to deficit spend even though budget adjustments were made in prior years. The deficit spending has largely been due to declining enrollment and the district s inability to quickly respond by adjusting the budget. The decline in enrollment was even greater than anticipated in 25-6, leaving the district facing budget reductions of at least $5.7 million in 26-7 on top of $3 million in cuts implemented in 25-6 to retain fiscal solvency. At the time of the initial FCMAT fieldwork, the district was in the process of submitting a qualified 25-6 second interim report to the Los Angeles County Office of Education because the board and administration had not had sufficient time to identify or approve appropriate budget reductions before the statutory deadline to submit the second interim report. The projected ending balance for 25-6 would barely meet the minimum 3% reserve for economic uncertainties required by the state without significant budget cuts. The district s financial situation was very serious. Employee contract negotiations were in progress during the FCMAT fieldwork. Only the smallest bargaining unit (SEIU) had settled its contract by August 26. The budget included an allowance to cover a 2% increase for all employees in Subsequent to the FCMAT fieldwork, the district settled negotiations for 26-7 at 4% for all bargaining units. It may be difficult for the district to explain to the public why salary increases are awarded while budget reductions are being made. Hacienda La Puente Unifi ed School District

16 8 BACKGROUND Fiscal Crisis & Management Assistance Team

17 DECLINING ENROLLMENT AND BUDGET REDUCTIONS 9 Findings and Recommendations Declining Enrollment and Budget Reductions As with many California school districts, Hacienda La Puente has been experiencing declining enrollment. The consequences of declining enrollment and deficit spending must be regularly and carefully managed to avoid financial insolvency. The district used excess ending reserves to balance the budget over the past several years. Using onetime ending reserves to balance the budget shortfall must cease. The administration and board have kept budget reductions as far away from the classroom as possible, but few future cuts can be made without drastically affecting student programs or amending bargaining agreements. With 9% of the unrestricted general fund budget devoted to employee compensation, the bargaining units and the administration must work closely to help the district avoid insolvency. The Director of Human Resources prepares enrollment projections, which are reviewed by the Assistant Superintendent of Business. Student enrollment and the corresponding average daily attendance (ADA) are the key factors in the amount of state funding received in revenue limit funds. Enrollment levels were down more than projected, exacerbating the budget shortfall in District staff must review and update enrollment projections at least three or more times per year and throughout the budget development process, and adjust staffing accordingly. In the past, some budget reductions have not materialized due to subsequent decisions by the administration or Governing Board. One example is the last-minute 25-6 change in the high school teacher staffing ratio from 34:1 to 33:1 that occurred just before the start of school in 25. The budgeted savings from a teacher ratio of 34:1 were not realized, so onetime reserve funds were used to cover the deficit. In the future, programs should not be added or enhanced without carefully identifying an ongoing funding source or negative impact to the budget. FCMAT did not delve into the specific budget reductions being considered by the administration and board of trustees, but it was noted that the district has several small elementary schools with fewer than 3 students enrolled. The administrative and operational costs to maintain a small school are nearly as high as those of a larger campus. Other school districts facing critical budget deficits have been faced with similar difficult decisions to close small schools or adjust boundaries to smooth out enrollment. The district should seriously consider closing small schools during the next budget development cycle if deficit spending cannot be curbed. The budget cuts and savings that were implemented in 25-6 and 26-7 must be accurately monitored to ensure that full implementation continues to result in expected Hacienda La Puente Unifi ed School District

18 1 DECLINING ENROLLMENT AND BUDGET REDUCTIONS savings. The LACOE requires the district to submit a detailed, accurate budget reduction plan and multiyear projection by June 3 each year indicating that the district could meet its financial obligations in the current and two subsequent years, along with its adopted budget. The 26-7 budget was submitted on time and approved by the County Office. The 26-7 first interim report was prepared and submitted to LACOE on time but did not include the cost of the 4% salary increase approved by the Governing Board. The district has taken a proactive, responsible approach to address the budget shortfall in 25-6 and The administration and board must work diligently to find ways to reduce the budget when necessary with as little impact to students and employees as possible. As the district faces major budget reductions in future years if enrollment continues to decline, the availability of cash to cover current expenditures may be tight. Monthly cash flow projections should be prepared and cash regularly reconciled to better manage cash and plan the timing of certain types of expenses. Employee contract negotiations were in progress at the time of the FCMAT study and were recently settled for Making sure that all bargaining groups understand the seriousness of budget issues is of utmost importance. The district must carefully explain to the public why salary increases may be approved while budget reductions are being considered, especially if the board should discuss closing small schools in the future. Hiring and retaining the best teachers, managers, and classified employees is critical to the success of the instructional goals of the district. Balancing the needs of students and employees while maintaining fiscal solvency is essential for any school district. Recommendations The district should: 1. Educate the public and employees about the effect of declining enrollment on district revenues. 2. Monitor enrollment monthly. 3. Regularly discuss and address enrollment and any enrollment changes with the Governing Board. 4. Provide the board with updated budget information on the actual savings achieved compared to the amounts approved as budget reductions. 5. Consider all options if future budget reductions are imminent, including the cost of operating small schools. 6. Include all managers and principals in the budget development process. Fiscal Crisis & Management Assistance Team

19 COMMUNICATION 11 Communication Communication may not have been sufficient to keep key stakeholders and employees informed about the budget shortfall. Most employees stated that the budget problems caught them by surprise and they were unaware that major budget reductions were being considered. The most common complaint from staff was that communication was sporadic or inadequate and must be improved to ensure that all parties are kept apprised of the board s decisions during any budget reduction process. The perception is that the budget problem may not have been real because spending on major and facility and technology project is ongoing. Employees and the public may not completely understand the difference between unrestricted general fund operating dollars and the various restricted funding sources available for construction and other specific programs. Interviews with various district employees revealed a lack of understanding of the district s budget problems and funding sources. Most employees stated that the budget problems caught them by surprise and that they were unaware that major budget reductions were being considered. The Business Department must keep the lines of communication open with its principals and department heads. Many districts use a detailed budget calendar to help managers meet key deadlines and participate in the budget development process. Open communication, beginning budget work early, and including stakeholders in the decision-making enable school districts to effectively work through difficult budget reduction processes. All parties should be kept informed over the next few months to ensure that the budget savings are properly calculated and incorporated into the final adopted budget. Recommendations The district should: 1. Find ways to improve communication throughout the district. 2. Open lines of communication with all key stakeholders, including parents, bargaining units, management and supervisory employees, and community members. 3. Consider a series of voluntary workshops, community meetings at schools, newsletters, and use of the district s Web site to communicate with district stakeholders, especially during times when the district faces budget reductions. Develop and use a detailed calendar to help meet deadlines and keep managers informed. Hacienda La Puente Unifi ed School District

20 12 BUDGET DEVELOPMENT AND OVERSIGHT 4. Include all managers and principals in the budget development process. 5. Present facility information at board meetings to keep constituents and community members informed about funding sources and progress of construction projects. 6. Explain the restrictions on capital facilities funds and other restricted funding sources. Budget Development and Oversight Responsibility for developing a district s budget generally resides with the business office under the direction and oversight of the Chief Business Officer. Budget revisions, monitoring, and financial reporting are usually the responsibility of the director of fiscal services, with changes submitted by budget managers throughout the district. Budget monitoring is essential to ensure that district funds are used correctly and effectively. The Director of Fiscal services develops and monitors the district s budget. Managing a budget as complex and intricate as that of HLPUSD is a daunting task. Five business office employees are assigned to budget tasks, but three of them are reasonably new to their positions and have limited experience. The staff turnover and lack of experience have placed a heavy burden on the director, creating a major backlog in budget revisions. The high turnover in key personnel in 25-6 may have kept the seriousness of the budget crisis from being adequately communicated to the board, staff and community. The district s multiple software systems have made budget development and monitoring difficult and time-consuming. The business office must develop, manage, revise, and monitor the budget and financial resources in a timely manner to retain the district s fiscal viability. The budget should reflect the district s goal to provide a comprehensive instructional program. The level of student enrollment, number of sites, impact of contractual obligations, and past practices often determine the budgeting process used by a school district. A successful budget model establishes a level of financial confidence in the district. Throughout the process, budget managers must be provided with clear and concise procedures to follow. Budget development should begin early in the year, preferably in January after the governor proposes the budget for the upcoming fiscal year. The first step in the process is to approve a budget calendar indicating the due dates that must be met to adopt the district s budget by June 3 each year. A well-managed budget development calendar serves two purposes: It allows site and department budget managers to identify their needs for the upcoming year and it strengthens communications between the managers and the business office. Fiscal Crisis & Management Assistance Team

21 BUDGET DEVELOPMENT AND OVERSIGHT 13 The district distributes an annual budget guide. However, budget managers may not always be fully trained or included in budget development. This seems especially true with regard to federal and state categorical programs. Most budget managers at sites and departments can access their budgets online, but need more training to use the system more effectively. Budget managers need to be held accountable for budgeting accurately and not overspending their allocations. The business office staff should meet with budget managers and principals at least once in the spring to discuss budget assumptions and assist in budget development, and again in the fall to review prior year carryovers. As the district may begin considering reductions and further changes in the budget for next year, it should develop a process to fully define anticipated increases or decreases in spending. Once the options are identified and prioritized, a full cost analysis must be completed to determine the total savings of each. For example, when positions are created or eliminated, the cost of statutory benefits and health coverage must be calculated along with salaries to quantify the full dollar value of these changes. Once budget reductions are approved by the board, the cuts must be implemented and monitored to ensure that the anticipated savings are realized. Proper planning and cost analysis will protect the district s future financial health. The business staff should strive to complete any current budget adjustments quickly to facilitate the preparation of multiyear projections that will accurately verify and forecast the financial condition of the district this year and in two subsequent years. The district should continue using a budget committee. Many school districts use budget committees with members representing all employee groups and community stakeholders to review and prepare recommended budget reductions to the board. A budget committee helps communicate financial information to constituents, and would enhance trust among the constituencies in the district. The district uses multiple computer systems: the in-house BOSS system and the Los Angeles County Office (LACOE) PeopleSoft and Human Resources systems for payroll, which flows directly into the PeopleSoft System but not into BOSS. Agencies using multiple systems must constantly reconcile the data to maintain financial integrity and reliable records. The use of multiple computer systems creates a duplication of work for the Human Resources and Business departments. The HLPUSD business office does not have a process for reconciling the data in the two systems until the year-end closing of the financial records. The district does not have a reliable, ongoing budget monitoring process in place. When the study team visited the district in March, June, and August, many revenue and expenditure accounts had not been reviewed to determine if the estimates should be adjusted Hacienda La Puente Unifi ed School District

22 14 BUDGET DEVELOPMENT AND OVERSIGHT based on changes in enrollment or federal or state allocations. Additionally, the 26-7 first interim report indicated the same restricted carryover as the prior year, indicating that categorical spending had not been well planned. The overwhelming workload of the Director of Fiscal Services complicates routine budget monitoring, which could mean that the district does not have a good picture of changes that may have occurred during the year. Also, the district is not able to accurately reflect its net ending fund balance throughout the year if budgets are not kept up to date. If possible, budget revisions should be taken to the board for approval more often than just at interim reporting deadlines. Budget-to-actuals summaries should be prepared and submitted to the board as a discussion item monthly. This should make interim reports more useful and give the board a more accurate idea of the district s finances. Submitting the summaries monthly also would allow the board and community to understand why variances are occurring. The summaries should be presented to the board for information, comment and direction if action is needed. When interim reports are prepared, they must include the very latest information with projections of the district s financial condition at the end of the year. Interims should be considered the nearest thing to closing the books, which means updating budgets to annual estimates and reviewing general ledger accounts to ensure that the balances reflected are accurate and that no balances need to be cleared. Valid, thorough budget updates with projections of the district s ending fund balance will ensure an early warning of any discrepancies between the budget projections and actual revenues or expenditures. The district does not have a computerized integrated position control system. This issue will be discussed later in this report, but the method used currently requires manual tracking of employee placement with step and column movement and actual health benefit costs budgeted, assuming that every certificated employee may move a column on the salary schedule. This practice likely has the effect of overstating budgeted salary costs. Additionally, because of the lack of a computerized position control and budget projection system, the district uses an average amount to project health benefits. This practice could overstate or understate the budget for health benefit costs. When the district prepares the cost estimate for step and column movement of teachers, it does not prepare the net cost of retirements and resignations. This practice tends to overstate the actual annual cost of step and column movement. The cost of salaries and benefits makes up approximately 9% of the district s unrestricted general fund budget. Unanticipated increases in these categories can quickly change the fiscal stability of a district. An integrated position control system establishes authorized positions by site or department and ensures that staffing levels and payroll expenditures conform to the district formulas and standards, preventing overstaffing and overpayments. Fiscal Crisis & Management Assistance Team

23 BUDGET DEVELOPMENT AND OVERSIGHT 15 The district does not appear to have a budget allocation policy related to replacement of furniture and equipment at schools. Interviews with school administrators revealed that schools are expected to use discretionary funds or categorical funds to replace items such as computers, classroom furniture, lunch tables, etc. This process has led to a perception of unequal distribution of resources and could violate supplanting regulations for categorical programs. The district currently pays retiree health benefits for employees to age 65. The unrestricted general fund currently pays all costs for this program regardless of the employee s original funding source. These expenditures should be charged to the program or fund where the employee originally worked. The 25-6 second interim report for the adult education fund was budgeted incorrectly. Revisions submitted to the business office by the Assistant Superintendent were not promptly updated. Based on FCMAT s interview with the child development program director, the second interim report for that fund also was incorrect. All operating funds such as the adult education fund, child development fund and cafeteria fund should be updated every time the general fund budget is revised, especially at interim reporting periods. Recommendations The district should: 1. Review the need to maintain dual financial systems. 2. Schedule training sessions on district budgets for school administrators, managers and secretaries. 3. Ensure that the Business Department reviews the budget monthly and adjusts revenue and expenditures as needed. 4. Provide assistance for the Director of Fiscal Services to ensure that all funds and budget line items are reviewed regularly. 5. Ensure that schools and departments have access to up-to-date and accurate budget information, and hold them accountable for not overspending budgets and for following established purchasing procedures. 6. Present budget changes and monthly budget summaries for the board to review, discuss and approve at a public meeting, accompanied by the rationale for any changes. 7. Continue to utilize a budget committee. Many school districts budget committees include members from all employee groups and community stakeholders to review and prepare recommended budget reductions for the Governing Board. 8. Carefully prepare the interim reports to include the very latest information with projections of the district s financial condition through the end of the year. Hacienda La Puente Unifi ed School District

24 16 POSITION CONTROL AND STAFFING 9. Work to establish a more accurate method to estimate annual column movement costs based upon the average actual column movement in several prior years. 1. Review the estimated health benefit costs to actual health benefits costs to determine if the current budgeting method should be further refined. 11. Prepare step and column estimates to include new hires and the effect of retirements and resignations. 12. Charge retiree health benefits appropriately to all funds and categorical programs. Accomplish this by using a benefits account object code and charging a small percentage of retiree benefits against each payroll as allowed. Use these accumulated funds from all sources to pay for retiree health benefit costs. 13. Develop a district-level budget process whereby schools sites can request funds for replacement of old, broken, vandalized or stolen furniture and equipment. 14. Identify a long-term funding plan for replacement and maintenance of the district s significant investment in technology. 15. Ensure that all fund and program budgets are updated at interim reporting periods. Position Control and Staffing One of the most critically essential budget development and monitoring tools is a position control system to monitor and authorize staffing, and identify employee salary and benefit costs. A reliable position control system also is an integral part of the overall internal accounting controls to ensure that only authorized positions are filled and salaries and benefits are budgeted and paid only as approved by the Governing Board. Salaries and benefits are approximately 9% of the district s general fund budget. Unanticipated increases in these categories can quickly alter a district s fiscal stability. An integrated position control system establishes authorized positions by site and department and ensures that staffing levels and payroll expenditures conform to district formulas and standards, preventing overstaffing and overpayments. The HLP position control system is not computerized or integrated with human resources, payroll and budget. Instead, employee tracking and budgeting for salaries and benefits is managed manually by the Human Resources Department and Fiscal Services. The Director of Fiscal Services uses an Excel spreadsheet based on payroll information to identify current employee salaries and benefits. Data in the Human Resources Department is managed using spreadsheets and by memory. Human Resources tracks and fills positions. Implementation and utilization of a reliable, computerized position control system by human resources, budget and payroll should be a top priority. This would enable human resources and the business office to jointly maintain salary and benefit information. It would only allow payroll to pay employees based on the information in the system. This separation of duties enhances internal control standards. Fiscal Crisis & Management Assistance Team

25 CATEGORICAL PROGRAMS AND SPECIAL EDUCATION 17 Staffing ratios must be carefully reviewed and strictly enforced. The district has reduced certificated staff as enrollment declined, but classified positions may not have been adjusted in a timely manner. The district s small and large schools were reported to have similar classified support staff regardless of the enrollment level. Staffing ratios should be reviewed and updated before the budget development cycle begins each year. District staffing ratios for classified staff and for certain certificated positions were established several years ago and have not been adjusted as enrollment has declined at a number of district schools. Interviews with school staff members revealed perceived discrepancies in staffing at schools and a perception that staffing allocations are not changed when enrollment changes. While many schools in the district are declining, several are growing and indicate they have not received additional staff. Involving site administrators will help to create buy-in and a transparency in the staffing allocation process. In creating this process, the district should look at an enrollment-based model as well as considering other unique needs and characteristics of individual schools. Under the current HLPUSD dual computer system and lack of an integrated position control module, positions are entered in payroll and then the budget is projected from payroll data. This creates an internal control weakness since there is no check and balance system that ensures that people being paid are actually filling budgeted and authorized positions. Recommendations The district should: 1. Develop and use a computerized, integrated position control system. 2. Review and revise staffing allocation formulas for classified staff and certain certificated positions to ensure fairness at all sites, whether enrollment is declining or increasing. Categorical Programs and Special Education The district receives considerable state and federal categorical funds that are designated by the granting agency for special projects. At the end of 25-6, the district had over $6 million in unspent carryover categorical funds. Careful planning for the effective use of these funds may help ease the burden on the unrestricted general fund. The recent 26-7 first interim report shows that the restricted ending balance is projected to be the same as the prior year ending balance, indicating that categorical fund expenditures have not been reviewed or planned for use to provide services for students. The study team noted that the district s categorical (CAT) form for 24-5 showed a restricted carryover for home-to-school transportation and special education transportation. This is highly unusual since it would indicate the district incurred no encroachment Hacienda La Puente Unifi ed School District

26 18 CATEGORICAL PROGRAMS AND SPECIAL EDUCATION for transportation in the prior year. The current year s budget showed that only personnel costs were budgeted in the transportation resource code. Expenditures may have been incorrectly coded, causing incorrect information to be entered on state and federal reports. This could result in the district not receiving appropriate funding in future years. The district should carefully review its account code structure for accuracy and make corrections as necessary. The district should also consider refiling certain state and federal reports if revenues and/or expenditures have been reported incorrectly. Categorical funds are an integral part of the district budget. Categorical program development should be integrated with the district s goals and should be used to respond to student needs that cannot be met by unrestricted expenditures. The Superintendent and cabinet should establish procedures to ensure that categorical funds are expended effectively to meet district goals. Carryover and unearned income of categorical programs should be monitored and evaluated in the same manner as general fund unrestricted expenditures. The district has large unexpended carryover balances in numerous categorical programs. The revenues and expenditures for these programs must be reviewed and evaluated in the same manner as unrestricted general fund revenues and expenditures. Plans need to be made to budget categorical funds the district expects to receive early in the budget development cycle. These plans must be consistent with categorical funding guidelines and restrictions. Schools should consider all funding sources when addressing key strategies. Restricted funds should be used first since they are allocated for students in the year they are received. Whenever there is doubt about whether to use unrestricted or restricted funds for an item that can come from either source, restricted funds should be used. Reports of categorical expenditures should be prepared monthly for the Chief Academic Officer and Chief Business Officer. They should review expenditures to date and remaining balances and determine whether any of these funds can be redirected to reduce carryover and unused balances. A review of effective categorical program supervision, delivery and expenditure of funds should be included in evaluating managers with responsibility over these specific funds. The use of AB 825 categorical flexibility provisions as well as flexibility provisions for federal programs should be reviewed to assist in alleviating the district s budget crisis. Interviews with district managers and employees indicated the need for budget training and for improved budget accountability for managers and principals. Principals indicated the desire for training on the use of categorical funds and on how the district and site budgets are developed. Additionally, concerns were expressed that categorical carryover information did not reach school sites until late in the year and then was often revised several times, causing schools to continually update school site plans. As with most districts in California, the cost of Special Education has increased significantly. It was reported that the caseloads of Special Education teachers and staff may need realignment. In small schools the teacher caseloads may be below average. Careful Fiscal Crisis & Management Assistance Team

27 CATEGORICAL PROGRAMS AND SPECIAL EDUCATION 19 review of six-hour special education instructional assistant positions indicates that changing some positions to part-time could reduce costs. Additionally, the district needs to formalize a tracking system to ensure that one-on-one instructional assistants follow the student to whom they are assigned and that the position is eliminated if the student leaves the district or services are no longer required. Recommendations The district should: 1. Set up a training session for school administrators and key staff members on the allowable uses of various categorical funds. 2. Carefully review for accuracy the recording and reporting of transportation program charges to avoid any loss of funding. 3. Consider refiling certain transportation reports if revenues and/or expenditures have been reported incorrectly. 4. Allocate school site carryover to the sites no later than September 3 and work with schools to review these carryover budgets. 5. Engage the instructional department, under the direction of the Chief Academic Officer, to develop and monitor the district s categorical budget. Ensure compliance by having the Chief Academic Officer review and approve personnel and purchase requisitions that are charged to categorical programs. 6. Ensure that the Consolidated Application is developed and reviewed against actual revenue and expenditure transactions in the financial records. 7. Set priorities for the use of categorical funds. Develop plans for the use of carryover funds. 8. Evaluate the caseloads of Special Education staff and reallocate positions or duties if caseloads are below average. 9. Review six-hour Special Education instructional assistant positions to determine if some positions might be converted to part-time status. 1. Ensure that Special Education one-on-one instructional assistants follow the students to whom they are assigned. Hacienda La Puente Unifi ed School District

28 2 CATEGORICAL PROGRAMS AND SPECIAL EDUCATION Fiscal Crisis & Management Assistance Team

29 MULTIYEAR FINANCIAL PROJECTION 21 Multiyear Financial Projection Multiyear financial projections (MYP) are an important part of the overall budget process and a major requirement of the AB12 school district financial oversight legislation. The district is required to submit multiyear projections along with the adopted budget and all interim reports. AB12 requires school districts to be able to meet all financial obligations for the current and two subsequent years. FCMAT noted some inconsistencies in the district-prepared MYP at the time the 26-7 budget was adopted. The independently prepared multiyear projections done by FCMAT in this report include certain corrections and assumptions that differ from those the district used in their original projections. The FCMAT MYP, which was prepared last fall, indicates that the district will be able to meet its obligations in the current and two subsequent years. FCMAT prepared the multiyear financial projections that are in this report. An unrestricted general fund summary appears at the end of this section of the report, and the detailed MYP is attached as Appendix E. After reviewing district records, interviewing employees and examining numerous financial reports to gather pertinent information for the MYP, FCMAT developed certain assumptions that are identified in the MYP narrative. The district has engaged in deficit spending in the past and is likely to continue doing so even though significant budget adjustments were made in 25-6 and 26-7 if the budget is not carefully and frequently monitored. FCMAT s MYP was prepared using the district s 26-7 adopted budget and other financial information but may contain assumptions different from other multiyear projection assumptions prepared by district staff. At this time, based on the 26-7 budget information the district provided to FCMAT, it appears that the district will comply with the AB12 requirements of meeting its financial obligations in the current and two subsequent years. This was determined before the 4% salary increases were awarded. The district met the required 3% reserve for economic uncertainties and ended the 25-6 fiscal year with unrestricted general fund reserves exceeding the projected ending fund balance on the 25-5 third interim report by over $3 million. The unaudited actual financial statements indicated that all of the excess funds have been designated for specific future purposes as identified in Section 5 of the Fiscal Health Risk Analysis included in this report. In 26-7, prior to the 4% increase, salaries and benefits were budgeted at approximately 9% of the district s unrestricted general fund. A cap on the cost of employee health benefits at $9,5 per employee was in effect at the time the FCMAT MYP was prepared. The adopted budget included projected step and column moves for both certificated and classified employees. The ending fund balance of 25-6 included a designation of 2% to offset a potential retroactive pay increase. Hacienda La Puente Unifi ed School District

30 22 MULTIYEAR FINANCIAL PROJECTION In developing and implementing a multiyear projection, the district s primary objective is to achieve and sustain a balanced budget, improve academic achievement and maintain local governance. MYPs are required by AB 12 and AB 2756 and should be timely and contain the most current fiscal information available. These projections allow the district and its major stakeholders to predict revenues and expenditures, and to ensure that the district will be able to meet its financial obligations in the current and two subsequent fiscal years. The following MYP was prepared based on the district s adopted budget as of July 1, 26, using information provided by management at that time. Although the district is in declining enrollment, it has been proactive in planning its resources for the future and has maintained a balanced budget. At the time this MYP was prepared, negotiations had not been settled for FCMAT has subsequently learned that the district settled negotiations with all bargaining units at 4% for The district is not experiencing any significant financial challenges at this time but could face further budget reductions if the budget is not monitored regularly. The district s 26-7 first interim report did not include the cost analysis of the 4% salary increases. If a district cannot meet its financial obligations for the current or two subsequent fiscal years, the county superintendent of schools must notify the governing board of the district and the Superintendent of Public Instruction if the district falls below the required reserve level. The county office adheres to Education Code when assisting any school district in this situation. County assistance could include assigning a fiscal expert to advise the district on financial problems, conducting a study of the financial and budgetary conditions of the district, or requiring the district to submit a proposal for addressing its fiscal condition. If a district does not meet the required reserve levels, the intent of the MYP is to help the county and the district formulate a plan to regain fiscal solvency and restore the required ending balance. California school districts and county offices use many different methods and software products to prepare reliable multiyear financial projections. The FCMAT MYP was prepared using FCMAT s Budget Explorer multiyear software, a Web-based forecasting tool that is available to all California school districts at no cost. The MYP was prepared using district data that was uploaded into Budget Explorer from the district s mainframe computer system. Any forecast of financial data has inherent limitations, including issues such as the timing of the report, subsequent negotiated settlements, unanticipated changes in enrollment trends and changing economic conditions on a state and local level. Therefore, the budget forecasting model should be viewed as a tool to assess trends based on certain criteria and assumptions, not as a prediction of exact numbers. The projection should be updated Fiscal Crisis & Management Assistance Team

31 MULTIYEAR FINANCIAL PROJECTION 23 at each interim financial reporting period to maintain the most accurate data. The district should consider using Budget Explorer for future multiyear projections to provide a more detailed analysis for the board and district stakeholders to review, particularly since the 4% salary increase may have long-term financial consequences that will affect future years. FCMAT reviewed the district s budget assumptions as of August 26 to validate the 26-7 adopted budget report and multiyear financial projections. Budget assumptions include conservative economic factors outlined by School Services of California (SSC) in its financial dartboard and fiscal information available at the California School Finance and Management 26-7 Conference. The following MYP represents FCMAT s financial projections as of August 26 for the unrestricted general fund, which is where most of the district s expenditures occur. (Please see next page.) The MYPs for the restricted and combined general fund are located in Appendix E to this report. Hacienda La Puente Unifi ed School District

32 24 MULTIYEAR FINANCIAL PROJECTION General Fund Restricted & Unrestricted Programs REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Date: 2/26/27 Time: 1:49 AM Description Revenues Revenue Limit Sources Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance Components of Ending Fund Balance Fund Balance Reserved Reserve for Revolving Cash Reserve for Stores Reserve for All Others General Reserve Legally Restricted Balance Designated for Economic Uncertainty Other Designated Undesignated/Unappropriated Negative Shortfall Account Codes Base Year ,252,234 12,893,714 34,827,566 1,673,22 174,646,734 83,655,266 26,238,12 36,168,91 8,41,793 15,54,28 1,451,28 2,2, (2,282,147) 171,372,413 3,274,321 1,276,721 (1,276,721) 1,997,6 19,178,985 21,176,585 5, 3, 6,975,584 6,622,232 5,179,474 2,49,295 Proj ,13,593 12,893,714 35,925,531 1,673,22 178,623,58 84,367,947 26,655,88 36,95,595 8,718,16 15,959,687 1,492,816 2,263,799 (2,282,147) 174,125,81 4,497,257 1,276,721 (1,276,721) 3,22,536 21,176,585 24,397,12 5, 3, 6,975,584 6,517,149 5,262,78 5,292,39 Proj ,943,858 12,893,714 36,778,531 1,673,22 181,289,323 85,189,264 27,8,41 37,574,61 8,941,927 16,348,454 1,532,85 2,324,92 (2,282,147) 176,71,288 4,579,35 1,276,721 (1,276,721) 3,32,314 24,397,12 27,699,434 5, 3, 6,975,584 6,429,498 5,339,615 8,64,737 Notes 1, 2, 3 4 5, 6, 7 Fiscal Crisis & Management Assistance Team

33 MULTIYEAR FINANCIAL PROJECTION Projected Ending Balances As noted in the following table, there are differences between the projected ending balance for the budget year 26-7 as determined by the district and the projected ending balance determined by FCMAT Projected Balances as of August 26 District FCMAT Unrestricted 15,293,536 14,554,353 Restricted 6,622,232 6,622,232 Total 21,915,768 21,176,585 The following will explain the unrestricted difference of ($739,183) between the district s and FCMAT s MYPs for the unrestricted general fund: FCMAT used the July 25, 26 updated equalization aid provided by SSC to calculate the district s revenue limit sources. This updated information provided an additional $1.81 per ADA and will result in an increase of $24,817 in revenue limit sources funding. Prior year revenue limit is not normally budgeted. Any positive or negative financial impact of the final prior year calculation is typically handled as an accrual or liability and does not impact the current year revenues. Therefore, FCMAT did not include the current budgeted amount of $68, in this projection, resulting in a decrease in revenue. FCMAT was unable to verify the source of the unrestricted federal revenue. Therefore, FCMAT s projection does not include the $3, budgeted for unrestricted federal revenues in the district s projection. Multiyear Forecast Assumptions FCMAT has focused attention on the unrestricted portion of the district s general fund budget, including the impact of increasing special education, community day school, transportation and the routine restricted maintenance calculations. The FCMAT projection does not assume expending the sizeable 25-6 restricted ending balance, because at the time of FCMAT s fieldwork the district had not shared specific plans for the use of these funds. In fact, as of the 26-7 first interim report, the district does not appear to have made specific decisions as to how the categorical carryover funds will be allocated or spent. Enrollment and Average Daily Attendance The FCMAT study team reviewed the enrollment and average daily attendance (ADA) trends of the district for the years 21-2 through The review compared the October CBEDS student enrollment count to the April P2 ADA data. Revenues earned by Hacienda La Puente Unifi ed School District

34 26 MULTIYEAR FINANCIAL PROJECTION the district through the revenue limit calculations are based on either the current or prior year P-2 data, whichever is higher. With the exception of an increase of 315 students in 23-4, the district s enrollment has been declining for a net enrollment loss of 2,41 over the previous four years. FCMAT has continued that conservative trend in its multiyear projection using historical CBEDS data, cohort survival classroom progression and county birth rates to develop the attendance projection. FCMAT s projected CBEDS and ADA are shown below. More detail as to enrollment and ADA analysis is located in Appendix E to this report * 27 * 28 * CBEDS 25,184 25,499 24,955 23,241 23,37 22,736 22,297 P2 ADA 23,76 23,76 22,677 22,223 21,767 21,476 21,61 CBEDS/ADA % 91.6% 9.5% 9.9% 95.6% 94.5% 94.5% 94.5% * estimated Although the district s ratio of enrollment to ADA in 25-6 was within the average range for schools, the prior years ratio was well below the state average. Keeping kids in school for more days each year will increase the district s revenue limit funding by increasing the number of ADA used in the calculation. At this time, the district continues to be funded on prior year P2 ADA because of declining enrollment. Improvements to the ratio will be realized in the funding for the following year at such time as the district experiences a growth in current year ADA above the prior year level. An increase of 1% in the attendance of currently enrolled students above last year s P2 level could bring an additional $1,256, in revenue limit funding. Revenues Revenue Limit Sources At the time this MYP was prepared, FCMAT calculated the district s revenue limit for 26-7 using the most current state budget information from the July 26 California School Finance and Management Conference and factors from the final budget version 26 SSC Dartboard. These factors include the estimated statutory COLA, elimination of the deficit, and lottery rates for the current and projected fiscal years. Anticipated declining enrollment numbers have affected the amount of revenues the district will receive; however, an enhanced COLA, equalization aid and a fully funded deficit factor mitigate the loss of revenue limit funding in the projection years. The district s revenue limit sources are made up of a combination of state aid and local tax revenues in the calculation. FCMAT did not increase the level of district property taxes in the calculation. This does not impact the total funding level, only the proportion of state aid to property taxes. Fiscal Crisis & Management Assistance Team

35 MULTIYEAR FINANCIAL PROJECTION 27 Federal Revenues FCMAT did not include any unrestricted federal revenues in the projection because the source of any such funds could not be verified. State Revenues FCMAT projected K-3 class size reduction revenues with COLA plus adjustments for declining enrollment. No mandated cost reimbursement funding is included in the projection years. Due to uncertainty in the state funding of mandated cost reimbursements and the high rate of disallowed claims audited by the State Controller s Office, budgets should be adjusted when funds are received. Local Revenues No changes were made to this revenue category. Expenditures Certificated Salaries The FCMAT multiyear projection includes the impact of step and column salary movement. FCMAT did not include any increase for salary compensation in the projection, as salary increases had not yet been determined through negotiations. FCMAT did reduce the number of teachers funded with unrestricted dollars by 18 in the projection year 27-8 and seven in 28-9 to offset the anticipated declining enrollment. The 25-6 ending balance indicated a 2% reserve for future salary increases. Classified Salaries As noted above, FCMAT did not include any salary increase but did include the ongoing impact of step and column movement. Employee Benefits FCMAT increased statutory benefits in proportion to certificated and classified salary changes in the projection years and factored a small COLA increase in employer health contributions in 26-7 and Books and Supplies FCMAT adjusted the budget for materials and supplies using the Consumer Price Index (CPI) inflation factor from the SSC Dartboard. Services and Other Operating Expenditures Budget amounts for travel and dues were not adjusted in the projection years. All other expenditures in the 5 object series were adjusted using CPI. Capital Outlay The equipment budget was increased by CPI. Hacienda La Puente Unifi ed School District

36 28 MULTIYEAR FINANCIAL PROJECTION Direct Support/Indirect Costs Indirect costs have been adjusted based on the changes in categorical budgets in the projection years. Other Financing Sources/Uses Transfers Out The transfer out in 26-7 is the required contribution of ½ of 1% of the total general fund budgeted expenditures to the deferred maintenance fund. Contributions to Restricted Programs Unrestricted contributions to restricted programs are for community day school, special education and the routine restricted maintenance program. FCMAT adjusted the contributions according to calculated shortfalls for community day school and the special education program based on the current service delivery model. The routine restricted maintenance contribution was adjusted based on the 3% of total general fund expenditures requirement. Net Increase/Decrease in Fund Balance The difference in the 26-7 budgeted unrestricted revenues and expenditures is a positive $1,997,6, taking into account the necessary contribution to restricted programs. This budgeted positive balance is a conservative amount and equates to 1.5% of the district s unrestricted revenues. Reserve Level The FCMAT projection indicates that the district will be able to meet the 3% minimum required reserve level in 27-8 and However, this could change based on the impact of the 4% salary settlement and any future negotiated settlements with bargaining unit groups. The district must continue to monitor the budget carefully and accurately and address potential shortfalls in a timely manner. Recommendations The district should: 1. Monitor enrollment and ADA monthly. 2. Consider using FCMAT s free Budget Explorer software to prepare future multiyear financial projections. 3. Update the MYP to reflect the impact of the recent 4% negotiated salary settlements. 4. Update the budget as changes occur, not just at interim reporting periods. 5. Address potential budget shortfalls in a timely manner. 6. Develop a plan to effectively use the categorical carryover funds. Fiscal Crisis & Management Assistance Team

37 FISCAL HEALTH RISK ANALYSIS 29 Fiscal Health Risk Analysis In 25, FCMAT developed the Fiscal Health Risk Analysis as a tool for local educational agencies to evaluate the fiscal impact of trends in 18 operational and management areas. Reviewed in isolation, these areas may not independently be considered detrimental to fiscal solvency. However, when evaluated as the core composite elements of the district s financial condition, these areas provide a clear checklist for establishing and maintaining fiscal solvency. To conduct the fiscal health and risk analysis for the Hacienda La Puente Unified School District, the FCMAT study team requested and reviewed a comprehensive list of financial reports, enrollment and ADA information, as well as supplemental documents and system printouts. The team met with the district Assistant Superintendent, Business Services and Director of Fiscal Services, and interviewed other key administrators and staff in the district. The district has been experiencing significant deficit spending and declining enrollment over the past few years. During the 25-6 fiscal year, the CBEDS enrollment declined by 1,714 from the prior year. FCMAT conducted a multiyear comparison of the general fund for past, current, and projected revenues, expenditures, transfers and components of the ending fund balance for fiscal years 21-2 through the unaudited actuals for 25-6 along with the 26-7 adopted and first interim budgets. FCMAT s projections show enrollment declined by about 2 in The enrollment decline of 2 was accounted for in the 26-7 adopted budget and FCMAT s multiyear projections. In periods where enrollment and ADA are flat or declining, the district must exercise extreme caution regarding budgetary issues such as negotiations, staffing, and deficit spending to ensure fiscal solvency. Diligent planning will enable the district to more clearly understand its financial objectives and strategies to sustain financial solvency. The district must continuously update the budget as new information becomes available in the district or from other funding and regulatory agencies. Although the district complies with the mandated budget revisions at the first and second interim reporting periods, budget revisions should be prepared and presented to the board monthly to ensure that changes and updates are known quickly and that the savings expected from budget reductions actually materialize. The following Fiscal Health and Risk Analysis was completed by the FCMAT study team and reflects the financial status of the district as of the completion of FCMAT s fieldwork in August 26. The analysis also includes an update of certain key events subsequent to the FCMAT fieldwork, such as the results of the 26-7 bargaining unit settlements, which will affect the district both fiscally and operationally. The analysis focuses on the district s unrestricted general fund, representing the revenues and expenditures related to funding sources that allow full district discretion in how monies are used. The analysis contains specific comments and recommendations to assist the district in measuring and improving its financial solvency score. Hacienda La Puente Unifi ed School District

38 3 FISCAL HEALTH RISK ANALYSIS Fiscal Health Risk Analysis Key Survival Questions 1. Deficit Spending Is this area acceptable? Yes Is the district spending within its budget in the current year? Yes (after implementing major budget reductions) The district has adopted a budget for 26-7 that includes approximately $5.7 million in budget reductions, following budget reductions implemented in 25-6 of $3.5 million. These reductions include staffing reductions, program delivery changes, and reductions to department and school site discretionary budgets. The district administration became aware of the need for significant budget reductions during fall 25. Budget reductions were identified during the preparation of the 25-6 first interim report, with the goal to reduce the budget by at least $3 million that year. The district requested that FCMAT prepare an independent multiyear projection to verify the estimated budget shortfall in 25-6 and subsequent years. FCMAT suggested that the district issue a third interim report for 25-6 to better project the ending fund balance prior to FCMAT s preparation of the multiyear projections. The third interim general fund budget reflected an unrestricted ending balance of $9,287,149, which was significantly lower than the actual unrestricted ending balance of $12,556,753. Although this difference reflects budget savings and conservative spending, it also indicates that the budget monitoring and oversight functions had not been working properly. Has the district controlled deficit spending over multiple years? No FCMAT reviewed independent audit reports for Hacienda La Puente from through 25-6 that identified general fund deficit spending in six of the nine years. The district showed excess revenues over expenditures in 2-1, 24-5, and 25-6 and budgeted excess revenues in 26-7, before the settlement of negotiations. Is the deficit spending addressed by fund balance, ongoing revenues, or expenditure reductions? Yes The district administration and board developed and implemented budget reductions of $3.5 million in 25-6 and $5.7 million in 26-7 that appear to have adequately addressed the deficit spending in both years, before the settlement of employee bargaining unit negotiations. Much of the success of this planning will depend on the accuracy of the enrollment projections for the current and future years as well as the district s ability to prepare accurate multiyear financial Fiscal Crisis & Management Assistance Team

39 FISCAL HEALTH RISK ANALYSIS 31 projections after reaching negotiated settlements of approximately 4% in ongoing salary increases for all employees. The July 1, 26 adopted budget for 26-7 indicated a projected net increase in the unrestricted general fund balance of approximately $2.7 million. The 26-7 first interim report indicates a projected increase in the ending fund balance of $3 million but does not include the 4% general fund salary increases that were recently approved by the board, estimated to be about $4.5 million. 2. Fund Balance Is this area acceptable? Yes Is the district s fund balance consistently increasing? No The general fund ending balance has experienced both increases and decreases since However, the fund balance has continued to support the required 3% minimum reserve level. The district s diligence in implementing budget reductions in 25-6 and 26-7 indicates improvement in the fund balance before the recently approved salary increases. Ending Fund Balance* Combined General Fund $12,71, $9,133, $22,228, $22,71, $13,318, $12,523, $15,559, $19,178, $22,258,65 *source annual independent audit balances include legally restricted categorical ending balances 26-7 projected balance taken from first interim report, 12/15/6 Is the fund balance increasing due to ongoing revenues and/or expenditure reductions? Yes The projected fund balance increases for 25-6 and 26-7 are due to increased revenues and decreased expenditures but do not reflect any negative effect from the negotiated settlements for Reserve for Economic Uncertainty Is this area acceptable? Yes Is the district able to maintain its reserve for economic uncertainty in the current and two subsequent years based on current revenue and expenditure trends? Yes Hacienda La Puente Unifi ed School District

40 32 FISCAL HEALTH RISK ANALYSIS Was the district able to maintain its reserve in 23-4 and 24-5 without using the state flexibility? Yes Is the district aware that the reserves must be restored with the 25-6 budget? Is there a plan to restore the 25-6 reserve for economic uncertainty? The district administration identified the budget shortfall early enough in 25-6 for the board to approve and implement savings that improved the fund balance in 25-6 and Enrollment Is this area acceptable? No Has the district s enrollment been increasing or stable for multiple years? No District enrollment has declined over the past several years. In prior years the enrollment projections were not always estimated accurately. Is the district s enrollment projection updated at least semiannually? Yes The district updates enrollment and ADA projections at least three times a year. An analysis of actual enrollment and ADA should be conducted monthly to ensure that projections are reasonable. Are staffing adjustments consistent with the enrollment trends? No In the past the district made changes in certificated staffing levels based on enrollment changes and reduced 18 positions in Although the collective bargaining agreement between the district and the certificated teachers union identifies a student teacher ratio of 3:1, the 25-6 staffing levels for grades 4-6 were 28.7:1, grades 7-8 were 25.1:1, and grades 9-12 were 27.5:1. Classified staffing does not appear to have been adjusted as enrollment declined. Does the district analyze enrollment and average daily attendance (ADA) data? Yes Does the district track historical data to establish future trends between P-1 and P-2 for projection purposes? Yes It was unclear which district administrator actually was responsible for enrollment and ADA projections. One specific person should be designated to oversee enrollment and ADA trends and projections, reporting to cabinet and the board monthly. 5. Unrestricted or Undesignated Balance Is this area acceptable? Yes Fiscal Crisis & Management Assistance Team

41 FISCAL HEALTH RISK ANALYSIS 33 Is the district s unrestricted or free balance maintained throughout the year? Yes Like many school districts, the unrestricted general fund estimated ending balance varies during the year. The 25-6 unaudited actual ending fund balance included the required reserves for revolving cash, stores inventory, and 3% reserve for economic uncertainties, as well as about $6.975 million in board designated reserves for the following items: Unused vacation payoff $5, Donation accounts 281, Liability losses 36, 5-6 open purchase orders 48, Enrollment study 4, Facility master plan 25, Post employment benefits 1,13, % salary increase 2,84, Classroom furniture/equip 1,85, No undesignated fund balance amount was shown in the 25-6 unaudited actual financial report. Does the district consistently have fund balance above the required reserve? Yes The district has maintained an ending fund balance above the required 3% reserve but the ending balance has dwindled over the past several years. 6. Interfund Borrowing Is this area acceptable? Yes Can the district manage its cash flow without interfund borrowing? Yes The district has not participated in interfund borrowing to date. Is the district repaying the funds within the statutory period? 7. Bargaining Agreements Is this area acceptable? Yes Has the district settled bargaining agreements at or under COLA during the past three years? Not always Hacienda La Puente Unifi ed School District

42 34 FISCAL HEALTH RISK ANALYSIS Statutory COLA 3.17% 1.66% 1.86% 2.41% 4.23% 5.92% Funded COLA 3.17% 2.% -1.2% 2.41% 4.19% 5.92% Certificated Teachers 3.5% 2.%.% 2.% 2.% 4.% Classified CSEA 4.% 2.%.% 2.% 2.% 4.% Management 4.5% 2.%.% 2.% 2.% 4.% proposed Classified Supervisory 2% Jan 2 2.%.%.% 4.% 4.% SEIU 2% July 2 Source information for statutory and funded COLA percentages, School Services of California Source information for salary COLA provided by the district Did the district conduct a pre-settlement analysis identifying an ongoing revenue source to support the agreement? Partially Negotiations for 26-7 were not settled at the time of the FCMAT study. The district s 25-6 unaudited actuals include a board designated reserve equal to a 2% increase for all employees, assuming the use of state COLA increase and reserves as the funding source. It is not known if a pre-settlement analysis was identified in prior years. Subsequent to the FCMAT fieldwork, the district settled negotiations for 26-7 with all bargaining units in the amount of 4%. The certificated increase became effective September 1, 26. The classified CSEA increase of 4% became effective January 1, 27. The classified SEIU unit received an increase of 4% retroactively to July 1, 26. The Governing Board has not yet approved an increase for management, but a decision is expected soon. The salary increase included using the 2% designated ending reserve balance and an additional 2% from current year revenue limit COLA and other ongoing revenues. Did the district correctly identify the related costs above the COLA? No The district did not provide salary increases above the state COLA. Did the district address budget reductions necessary to sustain the total compensation increase? Yes Did the Superintendent and CBO certify the agreement prior to ratification? Yes Fiscal Crisis & Management Assistance Team

43 FISCAL HEALTH RISK ANALYSIS 35 Is the Governing Board s action consistent with the superintendent s/cbo s certification? Yes 8. General Fund Is this area acceptable? Yes Is the percentage of the district s general fund unrestricted budget allocated to salaries and benefits at or under the statewide average? Yes Fiscal Year Combined general fund cost of salaries and benefits Percentage of general fund budget Unrestricted general fund cost of salaries and benefits ,112, ,934, ,895, , ,571, ,591, ,69, ,685, st interim budget 146,64, ,938, Source: District unaudited actual financial reports Excludes transfers out in the total expenditure denominator Percentage of general fund budget California school districts generally experience employee salary and benefit costs in the range of 85% to 9% of total general fund expenditures. The average unrestricted percentage has recently begun to creep into the 9% range, with some districts experiencing as high as 94%, limiting their ability to fund basic needs such as classroom supplies, rising utility costs, equipment replacement, etc. with remaining discretionary dollars. Hacienda La Puente has stayed within the average percentage range because negotiations had not been settled as of the 26-7 first interim report and by maintaining a cap on the employer contribution to the employee health plans. Is the district making sure that only authorized restricted dollars pay for permanent staff? Yes 9. Encroachment Is this area acceptable? Yes Is the district aware of the contributions to restricted programs in the current year? Yes 26-7 Fiscal Year as of 1 st interim Contribution -6,422,784-12,911,424-3,757,938-7,641,637-9,813,353-8,934,899 The district has been fortunate to have carryover balances to support expenditures in the Special Education programs. However, it is anticipated that in 26-7 Hacienda La Puente Unifi ed School District

44 36 FISCAL HEALTH RISK ANALYSIS the current balances will be expended and a larger unrestricted general fund contribution will be required this year and in subsequent years. The recent negotiated salary increases will impact the contribution as well. Does the district have a reasonable plan to address increased encroachment trends? Yes The potential for providing general fund support to Special Education is being addressed by the administration and the Budget Committee. Recommendations are being developed that will be presented to the Governing Board. Does the district manage its encroachment from other funds such as Special Education, adult, cafeteria, child development, etc.? Yes The district does not currently have any encroachments by other funds. 1. Management Information Systems Is this area acceptable? No Is the district data accurate and timely? No The district currently operates an in-house system that is aging and requires specialized programming services, and also utilizes the LACOE PeopleSoft system. The business office staff does not have adequate time to regularly reconcile the two systems. Budget revisions are made at interim reporting periods only. Both systems are reconciled by year end. Are the county and state reports filed in a timely manner? Yes Are key fiscal reports readily available and understandable? Yes Recently the CBO has been providing additional information to the board on a more regular basis, usually monthly. Is the district on the same financial system as the county? Yes The district has its own system, but the information is uploaded into the county system. The county system is considered the official financial record of the district. 11. Position Control Is this area acceptable? No Is position control integrated with payroll? No The district does not have a computerized position control system. The Director of Fiscal Services manages position control for budget purposes using self- Fiscal Crisis & Management Assistance Team

45 FISCAL HEALTH RISK ANALYSIS 37 built Excel spreadsheets. With the large number of employees in a district this size, this is a very time-consuming process and could lead to undetected errors. The Human Resources department manages position control for employment purposes. For budget development, each employee is entered into the spreadsheet by site. Steps and columns are changed manually and benefits are calculated for each employee, then all costs are tallied by site. When the Director of Fiscal Services learns that employees have moved to another site or new employees are hired, then the spreadsheet and budget are updated at the interim reporting periods. The system is not integrated with human resources or payroll. However, the director works very closely with both departments to verify the accuracy of the position control data. Human Resources maintains its own system of tracking positions and employees. The two systems are reconciled periodically. The Director of Fiscal Services also manually verifies the position control system and budget to payroll records. Does the district control unauthorized hiring? Yes The district uses a personnel action form that requires signatures from the HR and business departments to confirm that there is available funding for new positions or changes in current position assignments. The Assistant Superintendent of Human Resources has been with the district for many years and has an excellent history of managing staffing due to years of experience. Should this employee leave the district, the loss of institutional memory would place the district in serious jeopardy without a reliable integrated position control system in place Budget Monitoring Is this area acceptable? Partially Is there sufficient consideration to the budget related to long-term bargaining agreements? Yes Although interim reports are prepared as required and budget revisions are processed throughout the year, including personnel changes, budget monitoring is done strictly by the Director of Fiscal Services, whose workload is overwhelming. It is virtually impossible for one person to monitor the budget detail and manually maintain the position control spreadsheets that are required to ensure budget accuracy in a district this size. Communication about the district budget has improved, with presentations to the board and staff in a narrative format through PowerPoint. Communication is key to keeping the district employees, board, bargaining units, and community up to date on the issues that affect the use of district funds. Hacienda La Puente Unifi ed School District

46 38 FISCAL HEALTH RISK ANALYSIS These issues include declining enrollment, the requirement to use 3% of the general fund total budget annually to maintain district facilities, growing Special Education encroachment, and the district s ability to offer competitive compensation for employees. Are budget revisions completed in a timely manner? Only at interim reporting periods The time constraints imposed by the current, mostly manual budgeting process preclude the inclusion of all changes in the interim reports. Budget revisions are prepared at the interim reporting periods. Considering the serious financial issues the district has faced in the past several years and may face in the future due to declining enrollment, the budget should be revised monthly, or at least quarterly, to provide up-to-date information to the board at all times. Does the district openly discuss the impact of budget revisions at the board level? Yes This is now the case. Presentations are now made to the board regularly. For a short period of time in the recent past, the information provided to the board by a prior administrative team may not have been as timely or reliable as it is now. Are budget revisions made or confirmed by the board at the same time the collective bargaining agreement is ratified? Yes Has the district s long-term debt decreased from the prior fiscal year? Yes The independent audit reports for through 25-6 show the amount of long-term debt is steadily decreasing largely due to repayment of general obligation bonds. However, at this time, the district has not recognized the full financial impact of retiree benefits under the GASB 45 requirements. Has the district identified the repayment sources for the long term debt? Yes Retiree benefits are funded on a pay as you go basis, with no funds set aside for the long-term debt portion of the liability. The disclosure of the long-term debt obligation of employee retirement benefits under GASB 45 requirements will significantly affect the district s financial position. Obtaining an updated actuarial report should be considered in the near future. 13. Retiree Health Benefits Is this area acceptable? Yes Fiscal Crisis & Management Assistance Team

47 FISCAL HEALTH RISK ANALYSIS 39 The district provides post-employment health care benefits, in accordance with district employment contracts, to all employees who retire from the district on or after age 55 with at least ten years of continuous service for classified employees or 15 years of service for certificated employees. Classified employees hired after January 1, 23 must have 15 years of service to be eligible. The district currently provides health care benefits to 234 retirees. The district provides medical benefits at the same level that employees received when they retired for a period of up to five years or age 65, whichever occurs first. The cost of retiree benefits in 25-6 on the pay-as-you-go basis was $427,482 and the future long-term liability is estimated to be about $5 million as of June 3, 26 (source: 25-6 independent audit report). The district cap on benefits was $9, in 25-6 and $9,5 in 26-7, with agreement to add the revenue limit COLA factor to $9,5 in future years. The revenue limit COLA would be calculated as the statutory cola + or deficit, equalization, etc. Has the district completed an actuarial calculation to determine the unfunded liability? No An actuarial report was not provided to the team, based on the minimal level of liability. The district plans to obtain an actuarial report this year. Does the district have a plan for addressing the retiree benefits liabilities? Yes The district is currently using the pay-as-you-go method. No funding has been set aside to meet the GASB 45 early retiree benefit requirements. However, the Assistant Superintendent of Business and board are working on a plan to address GASB 45 in the near future. Has the district conducted a re-enrollment process to identify eligible retirees? The district recently went through a full re-enrollment process for all active and retired employees requiring proof of marriage and birth certificates for children. 14. Leadership/Stability Is this area acceptable? Yes, at this time Does the district have a Superintendent and/or Chief Business Official that has been with the district over four years? See explanation below The district has undergone many administrative changes over the past several years that are partially responsible for the recent budget crisis. The current Hacienda La Puente Unifi ed School District

48 4 FISCAL HEALTH RISK ANALYSIS superintendent has been with the district for many years as an assistant superintendent, and accepted the superintendent position in June 26. The current Assistant Superintendent of Business was an employee of the district for many years, left for a short period of time and returned in September 26. Both of these administrators have many years of experience and have brought much needed overall stability to the district and the business operations. Does the Governing Board adopt clear and timely policies and support the administration in their implementation? Yes Based on the interview conducted with two board members, FCMAT believes that the board is working with the administration to address the current issues. Does the Governing Board refrain from micromanaging? Yes, in most instances 15. District Liability Is this area acceptable? Yes Has the district performed the proper legal analysis regarding potential lawsuits that may require the district to maintain increased reserve levels? Yes According to the 25-6 independent audit report, the district is a defendant in several legal actions brought about in the normal course of operations, but in the opinion of management, there are no cases that would materially affect the financial statements. Most such claims are covered by insurance. Has the district set up contingent liabilities for anticipated settlements, legal fees, etc? There is no need for such action 16. Charter Schools Is this area acceptable? Yes The district does not have any charter schools at this time. 17. Audit Report Is this area acceptable? Yes Did the district receive an audit report with material findings? No The 24-5 and 25-6 independent audit reports did not include any major audit adjustments or findings, although financial adjustments were made to several funds other than the general fund by the auditors due to their materiality threshold. Most of the management comments and other findings related to ASB activities. All prior year recommendations were implemented. The district is Fiscal Crisis & Management Assistance Team

49 FISCAL HEALTH RISK ANALYSIS 41 committed to always resolving audit findings to ensure they do not reoccur in subsequent years. Can the audit findings be addressed without impacting the district s fiscal health? Yes, all have been implemented 18. Facilities Is this area acceptable? Yes Has the district passed a general obligation bond? Yes, in 2 for $1 million. Has the district met the audit and reporting requirements? Yes The bond funds were used for modernization projects that will be substantially complete by June 3, 27. The oversight of bond funds and reporting obligations has been contracted out and all requirements have been met. Is the district participating in the state s school facilities program? Yes. As such, the district is required to fund the annual 3% routine restricted maintenance contribution for the maintenance and upkeep of district facilities and meets that obligation. Does the district have sufficient personnel to properly track and account for facility-related projects? Yes An outside contractor is used for this purpose. At this time, most of the major modernization projects are completed. Does the district have surplus property that may be sold or used for lease revenues? Yes The district owns some excess property, but no decision has been made as to the future disposition of it. The district currently operates several small elementary schools. Should a decision be made in the future to close or combine the smaller schools, additional property might become available.. Are there other potential statutory options? No Does the district have a Facilities Master Plan that was completed or updated in the last two years? Yes The district regularly updates its facilities plan. FCMAT did not request or receive a copy, as this issue was outside the scope of the current study agreement. Hacienda La Puente Unifi ed School District

50 42 FISCAL HEALTH RISK ANALYSIS RISK ANALYSIS Total the number of areas that were not acceptable ( No responses). Use the key below to determine the level of risk to the district s fiscal health Low Moderate High Extremely High Total No Responses: 3 At this time, with three No responses, the district s rating is in the low risk category. However, because of a few qualified responses, the lack of an integrated position control system, and continued concerns about declining enrollment, the district should carefully consider the recommendations made in this report and continue to closely monitor all aspects of the budget. This report includes recommendations regarding implementing a position control system to ensure that salary and benefit costs are accurately projected during the school year and in the stages of budget development. It is possible for the district to increase enrollment/ada generated funding levels by improving the percentage of students that attend school each day, without increases in staffing levels. Improvements in the methods of communicating the elements of the district s budget and analyzing the proposals related to negotiations will keep the board, staff, and community well informed on how decisions are made for the district. Fiscal Crisis & Management Assistance Team

51 APPENDICES 43 Appendices Appendix A - Study agreement Appendix B - First management letter, April 4, 26 Appendix C - Second management letter, July 19, 26 Appendix D - Third management letter, September 6, 26 Appendix E - Multiyear projection detail Hacienda La Puente Unifi ed School District

52 MANAGEMENT ASSISTANCE TEAM STUDY AGREEMENT March 2, 26 The FISCAL CRISIS AND MANAGEMENT ASSISTANCE TEAM (FCMAT), hereinafter referred to as the Team, and the, hereinafter referred to as the District, mutually agree as follows: 1. BASIS OF AGREEMENT The Team provides a variety of services to school districts and county offices of education upon request. The District has requested that the Team provide for the assignment of professionals to study specific aspects of the Hacienda La Puente Unified School District operations. These professionals may include staff of the Team, County Offices of Education, the California State Department of Education, school districts, or private contractors. All work shall be performed in accordance with the terms and conditions of this Agreement. 2. SCOPE OF THE WORK A. Scope and Obiectives of the Study The scope and objectives of this study are to: 1) Conduct a review of the District's 25-6 Second Interim financial report for all the general fund, Adult Education and Child Development funds including revenue, expenditure, and ADA/enrollment information. 2) Prepare a general fund multi year financial forecast to identify the District's financial position in 26-7 and 27-8 if enrollment continues to decline and no changes other than statutory COLA, step and column, and CPI trends are applied. 3) Determine the current level of risk to the District's fiscal health using the FCMAT Fiscal Health Risk Analysis model. B. Services and Products to be Provided 1) Orientation Meeting - The Team will conduct an orientation session at the District to brief District managementand supervisorypersonnelon the proceduresof the Team and on the purposeand scheduleof the study. 2) On-site Review - The Team will conduct an on-site review at the District office and at school sites if necessary. 3) ProgressReports- The Team will hold an exit meeting at the conclusion of the on-site reviewto informthe Districtof significantfindingsand recommendationsto that point. 4) Exit Letter- The Team will issue an exit letter approximately1daysafter the exit meeting detailingsignificantfindingsand recommendationsto 1

53 date and memorializing the topics discussed in the exit meeting. 5) Draft Reports - Sufficient copies of a preliminary draft report will be delivered to the District administration for review and comment. 6) Final Report - Sufficient copies of the final study report will be delivered to the District following completion of the review. 3. PROJECT PERSONNEL The study team will be supervised by Barbara Dean, Deputy Administrative Officer, Fiscal Crisis and Management Assistance Team, Kern County Superintendent of Schools Office. The study team may also include: A. Michele McClowry FCMAT Management Analyst B. Margaret Rosales, FCMAT Fiscal Consultant C. Carleen Wing Chandler, FCMAT Fiscal Consultant Other equally qualified consultants will be substituted in the event one of the above noted individuals is unable to participate in the study. 4. PROJECT COSTS The cost for studies requested pursuant to E.C (d)(1) shall be: A. $4. per day for each Team Member while on site, conducting fieldwork at other locations, presenting reports, or participating in meetings. B. All out-of-pocket expenses, including travel, meals, lodging, etc. Based on the scope identified in section 2A, estimated cost is $6,5. District will be billed at actual costs. Payments for FCMAT services are payable to Kern County Superintendent of Schools- Administrative Agent. 5. RESPONSffiILITIES OF THE DISTRICT A. The District will provide office and conference room space while on-site reviews are In progress. B. The District will provide the following (if requested): 1) A map of the local area 2) Existing policies, regulations and prior reports addressing the study request 3) Current organizational charts 2

54 4) Current and four (4) prior year's audit reports 5) Any documents requested on a supplemental listing C. The District Administration will review a preliminary draft copy ofthe study. Any comments regarding the accuracy of the data presented in the report or the practicability of the recommendations will be reviewed with the Team prior to completion ofthe final report. Pursuant to EC (c), representatives of FCMAT will have limited contact with District pupils. The District shall take appropriate steps to comply with EC (c). 6. PROJECT SCHEDULE The following schedule outlines the planned completion dates for key study milestones: Orientation: Staff Interviews: Exit Interviews: Preliminary Report Submitted Final Report Submitted Board Presentation February 6,26 February 6-8, 26 February 8, 26, March 17, 26 To be determined To be determined 7. CONTACT PERSON Please print name of contact person: Walter Freeman Telephone EAX Edward Lee Vargas, Hacienda La Puente.~rintendent. ed School District I&~ Barbara Dean, Deputy Administrative Officer Fiscal Crisis and Management Assistance Team /-/8-k Date In keeping with the provisions of AB12, the County Superintendent will be notified of this agreement between the District and FCMAT and will receive a copy ofthe final report. 3

55 April 4, 26 Edward L. Vargas, Superintendent East Gale Avenue City of Industry, California Dear Superintendent Vargas, The purpose of this letter is to confirm the initial major findings and recommendations identified by the Fiscal Crisis and Management Assistance Team (FCMAT) as discussed at the exit conference conducted at the district office on March 22, 26. The district requested that FCMAT conduct a review of the budget development process and prepare a multiyear projection as described in the study agreement, as follows: 1. Conduct a review of the district s 25-6 second interim financial report for all the general fund, adult education and child development funds including revenue, expenditure, and ADA/ enrollment information. 2. Prepare a general fund multiyear financial forecast to identify the district s financial position in 26-7 and 27-8 if enrollment continues to decline and no changes other than statutory COLA, step and column, and consumer price index trends are applied. 3. Determine the current level of risk to the district s fiscal health using the FCMAT Fiscal Health Risk Analysis model District Budget and Multiyear Projections FCMAT reviewed district records, interviewed employees and examined numerous financial reports to gather pertinent information for this study. The district s once-large reserve balance of $25 million has dwindled over several years and has been used to cover the deficiency between revenues and expenditures. The district continues to deficit spend even though budget adjustments were made in prior years and this year.

56 The district recently submitted a qualified second interim report to the Los Angeles County Office of Education. The projected ending balance for 25-6 will barely meet the minimum 3% reserve for economic uncertainties required by the state. The deficit spending is largely due to declining enrollment and the district s inability to quickly respond by adjusting the budget. The decline in enrollment was even greater than anticipated this year, leaving the district facing budget reductions of at least $1 million in 26-7 on top of $3 million in cuts implemented this year to retain fiscal solvency. In addition, several employees in the business office are either new to the district or to their current positions. The high turnover in key personnel may have kept the seriousness of the budget crisis from being adequately communicated to the board, staff and community. The study team was asked to prepare a multiyear projection (MYP) based on the district s working budget as of the 25-6 second interim report. The MYP could not be completed because some of the data in the second interim report had not been updated. The MYP process requires uploading budget information from a mainframe computer system into a software program, assuming that all budget line items are complete and accurate. The base data was deemed incomplete when various test assumptions did not produce plausible data. This situation was discussed with the district administration, and it was mutually decided to postpone the preparation of the MYP projections for a few weeks to allow the district time to review all of the budget line items in question. It should be noted that the major budget components were deemed reasonable; it was specific line item detail that, when uploaded, was found to be incomplete. Although preparation of the MYP is temporarily delayed, the findings and recommendations contained in this letter may assist the district administration and board of trustees as they conduct the difficult process of identifying and approving $1 million in budget reductions. The district s financial situation is very serious. Deficit spending must cease. The administration and board have kept budget reductions as far away from the classroom as possible, but few future cuts can be made without drastically impacting student programs or amending bargaining agreements. With 85% to 9% of the unrestricted budget devoted to employee compensation, the bargaining units and the administration must work closely to help the district avoid insolvency. Communication may not have been sufficient to keep key stakeholders and employees informed about the budget shortfall. Most employees stated that the budget problems caught them by surprise and they were unaware that major budget reductions were being considered. The most common complaint from staff was that communication has been sporadic or inadequate and must be improved to ensure that all parties are kept apprised of the board s decisions during this process. The Public Information Officer (PIO) is on medical leave, leaving the district with no one in charge of keeping the public informed about the budget crisis. The district should consider alternatives to assist with public relations and press releases until the PIO returns. 2

57 Spending on major facility and technology projects is ongoing. Employees and the public may not completely understand the difference between unrestricted general fund dollars and the restricted funding sources available for construction and other specific programs. Open communication, beginning budget work early, and including stakeholders in the decision making will enable the district to effectively work through the process. All parties should be kept informed over the next few months to ensure that the budget savings are properly calculated and incorporated into the final adopted budget. Employee contract negotiations are in progress. Only the smallest bargaining unit (SEIU) has settled its contract. The budget includes an allowance to cover a 2% increase for all employees this year. It may be difficult for the district to explain to the public why salary increases are being approved while budget reductions are being made. In the past, some budget reductions have not materialized due to subsequent decisions by the administration or board of trustees. One example is the last-minute change in the high school teacher staffing ratio from 34:1 to 33:1 that occurred just before the start of school in 25. The budgeted savings from a teacher ratio of 34:1 were not realized, so one-time reserve funds were used to cover the deficit. In the future, programs should not be added or enhanced without carefully identifying an ongoing funding source. FCMAT did not delve into the specific budget reductions being considered by the administration and board of trustees, but it was noted that the district has several small elementary schools with fewer than 3 students enrolled. The administrative and operational costs to maintain a small school are nearly as high as those of a larger campus. Other school districts facing critical budget deficits have been faced with the difficult decisions to close small schools or adjust boundaries to smooth out enrollment. The district should seriously consider closing small schools during the budget reduction process. The 25-6 second interim report for the adult education fund was budgeted incorrectly. Revisions submitted to the business office by the Assistant Superintendent were not promptly updated. Based on FCMAT s interview with the child development program director, the second interim report for that fund also was incorrect. All operating funds such as the adult education fund, child development fund and cafeteria fund should be updated every time the general fund budget is revised, especially at interim reporting periods. The study team noted that the district s categorical (CAT) form for 24-5 showed a restricted carryover for home-to-school transportation and special education transportation. This is highly unusual since it would indicate the district incurred no encroachment for transportation in the prior year. The current year s budget showed that only personnel costs were budgeted in the transportation resource code. Expenditures may have been incorrectly coded, which could have caused incorrect information to be entered on state and federal reports. In some cases, this could result in the district not receiving appropriate funding. The district should carefully review its account code structure for accuracy for the current fiscal year and budget year, and make corrections as necessary. The district should also consider refiling certain state and federal reports if revenues and/or expenditures have been reported incorrectly.

58 The business staff should strive to complete the current budget adjustments quickly to facilitate the preparation of multiyear projections that will accurately verify and forecast the financial condition of the district this year and in two subsequent years. The district may wish to consider contracting an independent consultant with extensive budget experience to provide assistance. Once the budget is corrected, FCMAT will return to prepare the MYP as required by the study agreement. The proposed cuts and savings must be accurately projected and fully implemented to ensure that the district s 26-7 budget is approved by the Los Angeles County Office of Education (LACOE). The LACOE will require that the district submit a detailed, accurate budget reduction plan and multiyear projection by June 3, 26, indicating that the district will be able to meet its financial obligations in 26-7 and two subsequent years, along with its adopted budget. Budget Development and Oversight Responsibility for developing the district s budget generally resides with the business office under the direction and oversight of the Chief Business Officer. Budget revisions, monitoring, and financial reporting are the responsibility of the director, with changes submitted by budget managers throughout the district. Budget monitoring is essential to ensure that district funds are used correctly and effectively. Five business office employees are assigned to budget tasks, but three of them are new to their positions and have very limited experience. The turnover and lack of experience have placed a heavy burden on the director, creating a major backlog in budget revisions. The district s multiple software systems have made budget development and monitoring difficult and timeconsuming. The business office must develop, manage, revise, and monitor the budget and financial resources in a timely manner to retain the district s fiscal viability. The budget should reflect the district s goal to provide a comprehensive instructional program. The district distributes an annual budget guide. However, budget managers may not always be fully trained or included in budget development. This seems especially true with regard to federal and state categorical programs. Most budget managers at sites and departments can access their budgets online, but need more training to use the system more effectively. Budget managers need to be held accountable for budgeting accurately and not overspending their allocations. The level of student enrollment, number of sites, impact of contractual obligations, and past practices often determine the budgeting process used by a school district. A successful budget model establishes a level of financial confidence within the district. Throughout the process, budget managers must be provided with clear and concise procedures to follow. Budget development should begin early in the year, preferably in January after the governor proposes the budget for the upcoming fiscal year. The first step in the process is to approve a budget calendar indicating the due dates that must be met to adopt the district s budget by June 3 each year. A well-managed budget development calendar serves two purposes: It allows site and department budget managers to identify their needs for the upcoming year and it strengthens communications between the managers and the business office. 4

59 The business office staff should meet with budget managers and principals at least once in the spring to discuss budget assumptions and assist in budget development, and again in the fall to review prior year carryovers. One of the most critically essential budget development and monitoring tools is a position control system to identify employee salary and benefit costs. A reliable position control system also is an integral part of the overall internal accounting controls to ensure that salaries and benefits are budgeted and paid only as authorized by the board of trustees. Salaries and benefits are approximately 85% of a district s general fund budget. Unanticipated increases in these categories can quickly alter a district s fiscal stability. An integrated position control system establishes authorized positions by site or department and ensures that staffing levels and payroll expenditures conform to district formulas and standards, preventing overstaffing and overpayments. The district s position control system is not computerized. Instead, employee tracking and budgeting for salaries and benefits is managed manually by the Human Resources Department and Fiscal Services. The business director uses an Excel spreadsheet based on payroll information to identify current employee salaries and benefits. Data in the Human Resources Department is managed on Excel spreadsheets and by memory. Human Resources uses its system to track and fill positions. Implementation and utilization of a reliable, computerized position control system by Human Resources, budget and payroll should be top priority. This will enable Human Resources and the business office to jointly maintain salary and benefit information. The fiscal/budget department would open new positions or change existing ones. Human Resources would place employees or remove them from positions. Payroll could only pay employees based on the information in the system. This separation of duties enhances internal control standards. The district uses multiple computer systems: its own Boss system and the LACOE PeopleSoft system and Human Resources system for payroll, which flows directly into PeopleSoft but not into Boss. Agencies using multiple systems effectively must constantly reconcile the data to maintain financial integrity and reliable records. The district s business office does not reconcile the data in the two systems until the year-end financial closing. FCMAT could not verify the accuracy of the data in either system because the reports did not match. The Director of Human Resources prepares enrollment projections, which are reviewed by the Assistant Superintendent of Business. Student enrollment and the corresponding average daily attendance (ADA) are the key factors in the amount of state funding received in revenue limit funds. Enrollment levels were down more than projected, exacerbating the budget shortfall. District staff must review and update enrollment projections throughout the budget development process and adjust staffing accordingly. Staffing ratios must be carefully reviewed and strictly enforced. The district has reduced certificated staff as enrollment has declined, but classified positions may not have been adjusted. The district s small and large schools have some similar classified support staff regardless of the enrollment level. Staffing ratios should be reviewed and updated before adoption of the 26-7 budget. 5

60 As with most districts in California, the cost of special education has increased significantly. The district should closely review the caseloads of resource specialist program teachers especially at the small elementary schools, monitor the use and placement of instructional assistants, and consider employing part-time instructional assistants in place of full-time assistants wherever possible. The district receives considerable state and federal categorical funds that are designated by the granting agency for special projects. At the end of last year, the district had over $5 million in unspent carryover categorical funds. Careful planning for the effective use of these funds may help ease the burden on the unrestricted general fund. The recent second interim report showed that the restricted ending balance is projected to be the same as the prior year ending balance, indicating that categorical fund expenditures were not reviewed. As the district considers reductions and further changes in the budget for next year, it should develop a process to fully define anticipated increases or decreases in spending. Once the options are identified and prioritized, a full cost analysis must be completed to determine the total savings of each. For example, when positions are created or eliminated, the cost of statutory benefits and health coverage must be calculated along with salaries to quantify the full dollar value of these changes. Once budget reductions are approved by the board, the cuts must be implemented and monitored to ensure that the anticipated savings are realized. Proper planning and cost analysis will protect the district s future financial health. The district should consider forming a budget committee. Many school districts use budget committees with members representing all employee groups and community stakeholders to review and prepare recommended budget reductions to the board. A budget committee could help communicate financial information to constituents, which would enhance trust throughout the district. Multiyear financial projections are an important part of the overall budget process and a major requirement of the AB12 school district financial oversight legislation. The district is required to submit multiyear projections along with the adopted budget and all interim reports. AB12 requires school districts to be able to meet all financial obligations for the current and two subsequent years. The district is taking a proactive, responsible approach to address the budget shortfall in The administration and board must work diligently to find ways to reduce the budget with as little impact to students and employees as possible. As the district faces major budget reductions, the availability of cash to cover current expenditures may be tight. Monthly cash flow projections should be prepared and cash regularly reconciled to better manage cash and plan the timing of certain types of expenses. 6

61 Should you need any further information at this time, please feel free to contact our office. The study team will complete the multiyear projection as soon as the district has performed the necessary current year budget adjustments. Sincerely, Michele McClowry Management Analyst 7

62 July 19, 26 Dr. Barbara Nakaoka, Superintendent East Gale Avenue City of Industry, California Dear Superintendent Nakaoka, The purpose of this letter is to confirm our agreement that the Fiscal Crisis and Management Assistance Team (FCMAT) will postpone further work in the district until August 21-22, 26. This is because the 25-6 third interim report with district-prepared multiyear projections contained information that impeded FCMAT s ability to upload and process the data into our software system. The study team discussed this situation with you and Assistant Superintendent Walter Freeman on June 14, 26. The district requested that FCMAT conduct a review of the district s budget development process and prepare a multiyear projection as described in the study agreement, as follows: 1. Conduct a review of the district s 25-6 second interim financial report for all the general fund, adult education and child development funds including revenue, expenditure, and ADA/ enrollment information. 2. Prepare a general fund multiyear financial forecast to identify the district s financial position in 26-7 and 27-8 if enrollment continues to decline and no changes other than statutory COLA, step and column, and consumer price index trends are applied. 3. Determine the current level of risk to the district s fiscal health using the FCMAT Fiscal Health Risk Analysis model. FCMAT has previously addressed other issues related to this scope of study, as described in our management letter dated April 4, 26. FCMAT visited the district in mid-june to review the budget and prepare a multiyear projection based on the 25-6 third interim report that was approved by the Board of Trustees. However, while reviewing pertinent documents during the fieldwork, the study team noticed that the districtprepared multiyear projection that was included with the third interim report was not in a useable format.

63 At that time in mid-june the district was in the process of finalizing the 26-7 budget, with plans to present it to the board for approval in the very near future. The Los Angeles County Office of Education (LACOE) and the California Department of Education (CDE) require adopted budgets to include a district-prepared multiyear projection, which the district was also in the process of finalizing. The district and FCMAT mutually agreed during a meeting on June 14, 26 that FCMAT would postpone work on the district s multiyear projection until after the 25-6 accounting records were closed, the state-required SACS unaudited actual documents were finalized, and the 26-7 budget had been approved by LACOE. It has since been determined that this information will be available on August 21, 26. The district s dedication to ensuring future fiscal solvency by taking action to address the budget shortfall in 25-6 and 26-7 is to be commended. The administration and board are working together to identify and approve budget reductions with as little impact to students and employees as possible. As the district faces major budget reductions, the availability of cash to cover current expenditures may be tight. Monthly cash flow projections should be prepared and cash regularly reconciled to better manage cash and plan the timing of certain types of expenses. Should you need any further information at this time, please feel free to contact our office. In addition, please notify FCMAT when the district has completed the year-end closing process, and the study team will then return to complete the multiyear projections as requested in the study agreement. Sincerely, Michele McClowry, CPA Fiscal Intervention Specialist C: Walter Freeman, Assistant Superintendent of Business 2

64

65 September 6, 26 Dr. Barbara Nakaoka, Superintendent East Gale Avenue City of Industry, California Dear Superintendent Nakaoka, The purpose of this letter is to confirm the major findings and recommendations identified by the Fiscal Crisis and Management Assistance Team (FCMAT) during fieldwork that was conducted in the district on August 21 and 22, 26, and discussed at the exit meeting with Mr. Walter Freeman and Ms. Maureen Scanlon on August 24, 26. In March 26 the district initially requested that FCMAT review its budget development process and prepare a multiyear projection (MYP) as described in the study agreement, as follows: 1. Conduct a review of the district s 25-6 second interim financial report for all the general fund, adult education and child development funds including revenue, expenditure, and ADA/ enrollment information. 2. Prepare a general fund multiyear financial forecast to identify the district s financial position in 26-7 and 27-8 if enrollment continues to decline and no changes other than statutory COLA, step and column, and consumer price index trends are applied. 3. Determine the current level of risk to the district s fiscal health using the FCMAT Fiscal Health Risk Analysis model. The scope of the project was amended after FCMAT visited the district on two occasions prior to August 26 because it was determined that the district s financial data was not in a format that FCMAT could process using its MYP software. Two prior letters from FCMAT to the district are attached to provide a historical record of the findings and recommendations that have been identified previously. These letters should provide a thorough picture of the findings that will be included in the final report, which will be forthcoming in approximately six weeks.

66 Since several months have passed, rather than using the 25-6 second interim report as a base for the MYP, FCMAT is currently processing the MYP using the district s 26-7 adopted budget as a base. The MYP will evaluate the 26-7 budget and will include financial projections for 26-7 and In addition, FCMAT is preparing a fiscal health risk analysis to evaluate the financial impact of past trends in 18 operational and management areas. Both documents will be included in the final report District Budget and Multiyear Projections Multiyear financial projections are an important part of the overall budget process and a major requirement of the AB12 school district financial oversight legislation. The district is required to submit multiyear projections along with the adopted budget and all interim reports. AB12 requires school districts to be able to meet all financial obligations for the current and two subsequent years. FCMAT reviewed district records, interviewed employees and examined numerous financial reports to gather pertinent information for the MYP. The district has experienced deficit spending in the past and could continue to deficit spend if the budget is not carefully and frequently monitored, even though significant budget adjustments were made in 25-6 and this year. The deficit spending is largely attributable to declining enrollment and the district s inability to quickly respond by making timely budget adjustments. The enrollment decline was even greater than anticipated in Enrollment is projected to decline by 5 in 26-7 and another 2 in A high turnover in key personnel may have kept the seriousness of the budget crisis from being adequately addressed in prior years. For the most part, budget development and monitoring is performed by the Director of Fiscal Services. Since there is no integrated position control system in place, this employee also oversees the position control function by preparing Excel spreadsheets to calculate and budget for employee salaries and benefits. Because several employees in the business office are either new to the district or to their current positions, the director is responsible for an enormous workload. As discussed with district administrators, the FCMAT study team could not previously prepare an MYP based on the district s working budget as of the 25-6 second interim report. The MYP process requires uploading budget information from a mainframe computer system into a software program, assuming that all budget line items are complete and accurate. The base data was deemed incomplete when various test assumptions did not produce plausible data. FCMAT s MYP will be prepared using the district s budget information but may contain assumptions different from other multiyear projections prepared by district staff. At this time, based on the 26-7 budget information that the district provided to FCMAT, it appears that the district will comply with the AB 12 requirement of meeting its financial obligations in the current and two subsequent years. The district met the required 3% reserve for economic uncertainties and ended the 25-6 fiscal year with unrestricted general fund reserves exceeding the projected ending fund balance on the 25-5 third interim report by over $3 million. The unaudited actual financial statements indicate that all of the excess funds have been designated for specific future purposes. 2

67 Salaries and benefits are budgeted at approximately 89% of the district s unrestricted general fund. Employee contract negotiations are not settled for 26-7, except for a cap on the cost of employee health benefits at $9,5 per employee. The budget includes projected step and column moves for both certificated and classified employees. The ending fund balance of 25-6 includes a designation of 2% to offset a retroactive pay increase of that amount should that come to pass. Maintaining fair and competitive salaries and benefits is important to recruit and retain highly qualified employees, but it may be difficult for the district to explain to the public why salary increases are being approved when significant budget reductions were implemented. One of the most critically essential budget development and monitoring tools is a position control system to identify employee salary and benefit costs. A reliable position control system also is an integral part of the overall internal accounting controls to ensure that salaries and benefits are budgeted and paid only as authorized by the board of trustees. Unanticipated increases in salaries and benefits can quickly alter a district s fiscal stability. An integrated position control system establishes authorized positions by site or department and ensures that staffing levels and payroll expenditures conform to district formulas and standards, preventing overstaffing and overpayments. It was reported to FCMAT that the district reduced 18 certificated teaching positions this year due to declining enrollment. The staffing ratios must be strictly enforced. The district seems to have reduced certificated staff as enrollment declined, but classified positions may not have been adjusted. The district s small and large schools have some similar classified support staff regardless of the school s enrollment level. Staffing ratios should be reviewed and updated regularly. The district receives considerable state and federal categorical funds that are designated by the granting agency for special purposes. At the end of 23-4, the district had over $5 million in unspent carryover categorical funds. At the end of 25-6, the district had restricted carryover of $6.6 million, over $1.5 million more than the prior year. Compliance with program legal restrictions is very important but with careful planning, many districts have effectively used categorical funds to help ease the burden on the unrestricted general fund. Should you need any further information at this time, please feel free to contact our office. The study team will complete the multiyear projection and fiscal health risk analysis as soon as possible and will include the specific details in the final report. Sincerely, Michele McClowry, CPA Fiscal Intervention Specialist C: Gary Matsumoto, Chief Business Officer

68 General Fund Restricted & Unrestricted Programs REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Date: 2/26/27 Time: 1:57 AM Description Revenues Revenue Limit Sources Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance Components of Ending Fund Balance Fund Balance Reserved Reserve for Revolving Cash Reserve for Stores Reserve for All Others General Reserve Legally Restricted Balance Designated for Economic Uncertainty Other Designated Undesignated/Unappropriated Negative Shortfall Account Codes Base Year ,252,234 12,893,714 34,827,566 1,673,22 174,646,734 83,655,266 26,238,12 36,168,91 8,41,793 15,54,28 1,451,28 2,2, (2,282,147) 171,372,413 3,274,321 1,276,721 (1,276,721) 1,997,6 19,178,985 21,176,585 5, 3, 6,975,584 6,622,232 5,179,474 2,49,295 Proj ,13,593 12,893,714 35,925,531 1,673,22 178,623,58 84,367,947 26,655,88 36,95,595 8,718,16 15,959,687 1,492,816 2,263,799 (2,282,147) 174,125,81 4,497,257 1,276,721 (1,276,721) 3,22,536 21,176,585 24,397,12 5, 3, 6,975,584 6,517,149 5,262,78 5,292,39 Proj ,943,858 12,893,714 36,778,531 1,673,22 181,289,323 85,189,264 27,8,41 37,574,61 8,941,927 16,348,454 1,532,85 2,324,92 (2,282,147) 176,71,288 4,579,35 1,276,721 (1,276,721) 3,32,314 24,397,12 27,699,434 5, 3, 6,975,584 6,429,498 5,339,615 8,64,737 Notes 1, 2, 3 4 5, 6, 7 1. Source: 13 Class Size Reduction, Grades K 3 (Obj 8434) - K-3 CSR Revenue based on 97% of Projected K-3 CBEDS Enrollment: 27/8-6,198 *.97 * $1,72 = $6,444,864 28/9-6,237 *.97 * $1,12 = $6,667,1

69 2. Source: 11 State Lottery (Obj 856) - FCMAT did not adjust the unrestricted Lottery based on decling ADA. As the district has adjusted for the reduced ADA and Lottery adjustments. 3. Source: 7156 Instructional Materials: Grades K 8 (Includes Disaster funding and Fast Growth) (Obj 859) - Instructional Materials based on: 27/8 - Prior Year CBEDS estimate of 23,37 * = $1,288,229 28/9 - Prior Year CBEDS estimate of 22,736 * (includes COLA) = $1,37,93 4. Source: No reporting requirements (Obj 113) - Adjustment of Classroom Teachers: 27/8 - Reduction of 18 Classroom $46,816 Average Salary per anticipated decline of 5 ADA. 28/9 - Reduction of 7 Classroom $46,816 Average Salary per anticipated decline of 2 ADA. 5. Source: No reporting requirements (Obj 341) - Health/Welfare Adjusted by COLA: 27/8 Estimated COLA 4.7% and reduced by 18 Teachers * $9,5 28/9 Estimated COLA 2.8% and reduced by 7 Teachers * $9,5 6. Source: 13 Class Size Reduction, Grades K 3 (Obj 341) - Health & Welfare increased by COLA estimate in future years. 7. Source: No reporting requirements (Obj 342) - Health and Welfare Adjusted by COLA:

70 General Fund Unrestricted Program Only REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Date: 2/26/27 Time: 1:57 AM Description Revenues Revenue Limit Sources Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions to Restricted Resources Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance Components of Ending Fund Balance Fund Balance Reserved Reserve for Revolving Cash Reserve for Stores Reserve for All Others General Reserve Legally Restricted Balance Designated for Economic Uncertainty Other Designated Undesignated/Unappropriated Negative Shortfall Account Codes Base Year ,225,36 11,673,383 1,12, 133,18,689 65,875,2 15,953,512 27,17,12 2,92,91 11,332,931 1,92,891 (3,472,888) 12,89,469 12,29,22 1,276,721 (8,934,899) (1,211,62) 1,997,6 12,556,753 14,554,353 5, 3, 6,975,584 5,179,474 2,49,295 Proj ,13,665 11,895,62 1,12, 136,119,267 66,312,647 16,251,316 27,677,747 3,5,582 11,66,814 1,124,584 (3,548,763) 122,483,927 13,635,34 612,917 (9,696,84) (1,39,721) 3,325,619 14,554,353 17,879,972 5, 3, 6,975,584 5,262,76 5,292,312 Proj ,916,93 12,117,838 1,12, 138,154,768 66,853,412 16,555,76 28,145,9 3,86,78 11,974,937 1,154,947 (3,566,62) 124,24,918 13,949,85 638,994 (9,92,891) (1,559,885) 3,389,965 17,879,972 21,269,936 5, 3, 6,975,584 5,339,61 8,64,742 Notes 1, 2 3 4, 5, 6 1. Source: 13 Class Size Reduction, Grades K 3 (Obj 8434) - K-3 CSR Revenue based on 97% of Projected K-3 CBEDS Enrollment: 27/8-6,198 *.97 * $1,72 = $6,444,864 28/9-6,237 *.97 * $1,12 = $6,667,1

71 2. Source: 11 State Lottery (Obj 856) - FCMAT did not adjust the unrestricted Lottery based on decling ADA. As the district has adjusted for the reduced ADA and Lottery adjustments. 3. Source: No reporting requirements (Obj 113) - Adjustment of Classroom Teachers: 27/8 - Reduction of 18 Classroom $46,816 Average Salary per anticipated decline of 5 ADA. 28/9 - Reduction of 7 Classroom $46,816 Average Salary per anticipated decline of 2 ADA. 4. Source: 13 Class Size Reduction, Grades K 3 (Obj 341) - Health & Welfare increased by COLA estimate in future years. 5. Source: No reporting requirements (Obj 341) - Health/Welfare Adjusted by COLA: 27/8 Estimated COLA 4.7% and reduced by 18 Teachers * $9,5 28/9 Estimated COLA 2.8% and reduced by 7 Teachers * $9,5 6. Source: No reporting requirements (Obj 342) - Health and Welfare Adjusted by COLA:

72 General Fund Restricted Program Only REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Date: 2/26/27 Time: 1:57 AM Description Revenues Revenue Limit Sources Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions from Unrestricted Resources Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance Components of Ending Fund Balance Fund Balance Reserved Reserve for Revolving Cash Reserve for Stores Reserve for All Others General Reserve Legally Restricted Balance Designated for Economic Uncertainty Other Designated Undesignated/Unappropriated Negative Shortfall Account Codes Base Year ,26,928 12,893,714 23,154, ,22 41,628,45 17,78,246 1,284,59 9,6,989 5,48,892 4,27, ,137 2,2, 1,19,741 5,562,944 (8,934,899) 8,934,899 8,934,899 6,622,232 6,622,232 6,622,232 Proj ,26,928 12,893,714 24,29, ,22 42,53,791 18,55,3 1,43,772 9,272,848 5,712,434 4,298, ,232 2,263,799 1,266,616 51,641,874 (9,138,83) 663,84 9,696,84 9,33, (15,83) 6,622,232 6,517,149 6,517,149 Proj ,26,928 12,893,714 24,66, ,22 43,134,555 18,335,852 1,525,334 9,428,71 5,855,219 4,373, ,93 2,324,92 1,283,915 52,55,37 (9,37,815) 637,727 9,92,891 9,283,164 (87,651) 6,517,149 6,429,498 6,429,498 Notes 1 1. Source: 7156 Instructional Materials: Grades K 8 (Includes Disaster funding and Fast Growth) (Obj 859) - Instructional Materials based on: 27/8 - Prior Year CBEDS estimate of 23,37 * = $1,288,229 28/9 - Prior Year CBEDS estimate of 22,736 * (includes COLA) = $1,37,93

73 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 243 Community Day Schools (Education Code sections ) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources ,11 RevLimit 285,11 285,11 Federal Revenues Other State Revenues Other Local Revenues Total Revenues 285,11 285,11 285,11 Expenditures Certificated Salaries ,12 227, ,19 Classified Salaries ,182 66,485 67,814 Employee Benefits ,179 94,297 96,581 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 379, , ,414 Revenues over Expenditures (94,272) (13,152) (111,313) Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions ,272 13, ,313 Total Other Sources\Uses 94,272 13, ,313 Net Increase (Decrease) in Fund Balance (8,88) (17,41) Fund Balance Net Beginning Fund Balance Ending Fund Balance

74 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 31 NCLB: Title I, Part A, Basic Grants Low-Income and Neglected Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,679,557 3,679,557 3,679,557 Other State Revenues Other Local Revenues Total Revenues 3,679,557 3,679,557 3,679,557 Expenditures Certificated Salaries ,32,518 1,32,518 1,32,518 Classified Salaries , , ,859 Employee Benefits , , ,622 Books and Supplies ,53 448,53 448,53 Services and Other Operating Expenditures ,63 687,63 687,63 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost , , ,452 Debt Service Total Expenditures 3,679,557 3,679,557 3,679,557 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

75 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 33 NCLB: Title I, Part B, Reading First Program Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues , , ,281 Other State Revenues Other Local Revenues Total Revenues 839, , ,281 Expenditures Certificated Salaries ,85 516,85 516,85 Classified Salaries Employee Benefits , , ,691 Books and Supplies ,454 1,454 1,454 Services and Other Operating Expenditures ,89 173,89 173,89 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,396 3,396 3,396 Debt Service Total Expenditures 839, , ,281 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

76 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 331 Special Ed: IDEA Basic Local Assistance Entitlement, Part B, Sec 611 (formerly PL ) Account Base Year Proj. 1 Description Codes 26-7 Rule(s) 27-8 Revenues Revenue Limit Sources RevLimit Federal Revenues ,672,691 4,672,691 Other State Revenues Other Local Revenues Total Revenues 4,672,691 4,672,691 Expenditures Certificated Salaries Classified Salaries ,285,99 3,285,99 Employee Benefits ,386,71 1,386,71 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 4,672,691 4,672,691 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance Proj ,672,691 4,672,691 3,285,99 1,386,71 4,672,691 Notes

77 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 3315 Special Ed: IDEA Preschool Grants, Part B, Sec 619 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,577 13,577 13,577 Other State Revenues Other Local Revenues Total Revenues 13,577 13,577 13,577 Expenditures Certificated Salaries ,174 84,174 84,174 Classified Salaries Employee Benefits ,43 19,43 19,43 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 13,577 13,577 13,577 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

78 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 332 Special Ed: IDEA Preschool Local Entitlement, Part B, Sec 611 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,99 197,99 197,99 Other State Revenues Other Local Revenues Total Revenues 197,99 197,99 197,99 Expenditures Certificated Salaries , , ,226 Classified Salaries Employee Benefits ,919 38,919 38,919 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,764 5,764 5,764 Debt Service Total Expenditures 197,99 197,99 197,99 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

79 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 333 Special Ed: IDEA Infant Discretionary, Part B, Sec 611 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

80 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 334 Special Ed: IDEA Local Staff Development Grant, Part B, Sec 611 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,7 9,7 9,7 Other State Revenues Other Local Revenues Total Revenues 9,7 9,7 9,7 Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures ,7 9,7 9,7 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 9,7 9,7 9,7 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

81 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 3345 Special Ed: IDEA Preschool Staff Development, Part B, Sec 619 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

82 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 336 Special Ed: IDEA Low-Incidence Entitlement, Part B, Sec 617 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,139 8,139 8,139 Other State Revenues Other Local Revenues Total Revenues 8,139 8,139 8,139 Expenditures Certificated Salaries Classified Salaries ,65 4,65 4,65 Employee Benefits ,489 3,489 3,489 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 8,139 8,139 8,139 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

83 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 3385 Special Ed: IDEA Early Intervention Grants Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,543 83,543 83,543 Other State Revenues Other Local Revenues Total Revenues 83,543 83,543 83,543 Expenditures Certificated Salaries ,932 73,932 73,932 Classified Salaries Employee Benefits ,611 9,611 9,611 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 83,543 83,543 83,543 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

84 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 345 Special Ed: Workability I Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,13 246,13 246,13 Other State Revenues Other Local Revenues Total Revenues 246,13 246,13 246,13 Expenditures Certificated Salaries ,559 39,559 39,559 Classified Salaries ,16 124,16 124,16 Employee Benefits ,29 45,29 45,29 Books and Supplies , 6, 6, Services and Other Operating Expenditures ,28 15,28 15,28 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,12 16,12 16,12 Debt Service Total Expenditures 246,13 246,13 246,13 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

85 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 355 Vocational Programs: Voc & Appl Tech Secondary II C, Sec 131 (Carl Perkins Act) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues , 156, 156, Other State Revenues Other Local Revenues Total Revenues 156, 156, 156, Expenditures Certificated Salaries ,27 21,27 21,27 Classified Salaries ,2 13,2 13,2 Employee Benefits ,695 15,695 15,695 Books and Supplies ,828 12,828 12,828 Services and Other Operating Expenditures ,25 3,25 3,25 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 156, 156, 156, Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

86 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 371 NCLB: Title IV, Part A, Drug-Free Schools Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,59 91,59 91,59 Other State Revenues Other Local Revenues Total Revenues 91,59 91,59 91,59 Expenditures Certificated Salaries ,7 51,7 51,7 Classified Salaries Employee Benefits ,621 16,621 16,621 Books and Supplies ,911 7,911 7,911 Services and Other Operating Expenditures ,5 8,5 8,5 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,858 6,858 6,858 Debt Service Total Expenditures 91,59 91,59 91,59 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

87 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 435 NCLB: Title II, Part A, Teacher Quality Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,12 67,12 67,12 Other State Revenues Other Local Revenues Total Revenues 67,12 67,12 67,12 Expenditures Certificated Salaries ,43 366,43 366,43 Classified Salaries ,25 8,25 8,25 Employee Benefits ,632 97,632 97,632 Books and Supplies , , ,125 Services and Other Operating Expenditures ,6 18,6 18,6 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,975 49,975 49,975 Debt Service Total Expenditures 67,12 67,12 67,12 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

88 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 445 NCLB: Title II, Part D, Enhancing Education Through Technology Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,262 3,262 3,262 Other State Revenues Other Local Revenues Total Revenues 3,262 3,262 3,262 Expenditures Certificated Salaries ,821 14,821 14,821 Classified Salaries Employee Benefits ,917 2,917 2,917 Books and Supplies ,267 5,267 5,267 Services and Other Operating Expenditures , 5, 5, Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,257 2,257 2,257 Debt Service Total Expenditures 3,262 3,262 3,262 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

89 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 445 NCLB: Title II, Part D, Enhancing Education Through Technology Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,328 75,328 75,328 Other State Revenues Other Local Revenues Total Revenues 75,328 75,328 75,328 Expenditures Certificated Salaries ,76 177,76 177,76 Classified Salaries Employee Benefits ,579 38,579 38,579 Books and Supplies , , ,172 Services and Other Operating Expenditures , , ,262 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,69 52,69 52,69 Debt Service Total Expenditures 75,328 75,328 75,328 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

90 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 411 NCLB: Title V, Part A, Innovative Education Strategies Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues , , ,825 Other State Revenues Other Local Revenues Total Revenues 322, , ,825 Expenditures Certificated Salaries ,626 53,626 53,626 Classified Salaries ,29 95,29 95,29 Employee Benefits ,532 57,532 57,532 Books and Supplies ,298 52,298 52,298 Services and Other Operating Expenditures , 4, 4, Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,79 24,79 24,79 Debt Service Total Expenditures 322, , ,825 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

91 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 421 NCLB: Title III, Immigrant Education Program Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,8 62,8 62,8 Other State Revenues Other Local Revenues Total Revenues 62,8 62,8 62,8 Expenditures Certificated Salaries Classified Salaries ,71 43,71 43,71 Employee Benefits ,387 11,387 11,387 Books and Supplies ,353 2,353 2,353 Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,63 4,63 4,63 Debt Service Total Expenditures 62,8 62,8 62,8 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

92 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 423 NCLB: Title III, Limited English Proficiency (LEP) Student Program Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,88 482,88 482,88 Other State Revenues Other Local Revenues Total Revenues 482,88 482,88 482,88 Expenditures Certificated Salaries ,883 3,883 3,883 Classified Salaries ,45 45,45 45,45 Employee Benefits ,989 89,989 89,989 Books and Supplies Services and Other Operating Expenditures ,541 1,541 1,541 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,17 36,17 36,17 Debt Service Total Expenditures 482,88 482,88 482,88 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

93 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 564 Medi-Cal Billing Option Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 19,89 19,89 19,89 Ending Fund Balance 19,89 19,89 19,89

94 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 581 Other Federal Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues ,69 55,69 55,69 Other State Revenues Other Local Revenues Total Revenues 55,69 55,69 55,69 Expenditures Certificated Salaries , , ,551 Classified Salaries ,466 19,466 19,466 Employee Benefits ,335 76,335 76,335 Books and Supplies ,327 7,327 7,327 Services and Other Operating Expenditures ,217 32,217 32,217 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,713 37,713 37,713 Debt Service Total Expenditures 55,69 55,69 55,69 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 1,478 1,478 1,478 Ending Fund Balance 1,478 1,478 1,478

95 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 691 Cal-SAFE Supportive Services Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,2 15,956 18,922 Other Local Revenues Total Revenues 11,2 15,956 18,922 Expenditures Certificated Salaries ,121 41,943 42,781 Classified Salaries ,586 2,997 21,416 Employee Benefits ,494 25,259 25,845 Books and Supplies ,53 5,217 6,11 Services and Other Operating Expenditures , 4, 4, Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,496 8,54 8,779 Debt Service Total Expenditures 11,2 15,956 18,922 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 86,328 86,328 86,328 Ending Fund Balance 86,328 86,328 86,328

96 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 6226 School Facilities Needs Assessment Grant Program Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 17,1 17,1 17,1 Ending Fund Balance 17,1 17,1 17,1

97 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 625 Early Mental Health Initiative (EMHI) (Department of Mental Health) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,725 38,725 38,725 Other Local Revenues Total Revenues 38,725 38,725 38,725 Expenditures Certificated Salaries ,3 3,366 3,433 Classified Salaries ,5 22,95 23,49 Employee Benefits ,418 6,557 6,688 Books and Supplies ,57 2,852 2,195 Services and Other Operating Expenditures , 3, 3, Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 38,725 38,725 38,725 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

98 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 6268 Certificated Staff Performance Incentive Bonus Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 199, , ,466 Ending Fund Balance 199, , ,466

99 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 6286 English Language Acquisition Program, Teacher Training & Student Assistance Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 76,944 76,944 76,944 Ending Fund Balance 76,944 76,944 76,944

100 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 6296 Calif. Public School Library Act of 1998 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 25,427 25,427 25,427 Ending Fund Balance 25,427 25,427 25,427

101 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 63 Lottery: Instructional Materials Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,2 772,2 772,2 Other Local Revenues Total Revenues 772,2 772,2 772,2 Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies ,62 714,62 714,62 Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,598 57,598 57,598 Debt Service Total Expenditures 772,2 772,2 772,2 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 1,24,638 1,24,638 1,24,638 Ending Fund Balance 1,24,638 1,24,638 1,24,638

102 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 635 ROC/P Apportionment Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 121, , ,627 Ending Fund Balance 121, , ,627

103 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 636 Pupils with Disabilities Attending ROC/P Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 6,2 6,2 6,2 Ending Fund Balance 6,2 6,2 6,2

104 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 645 School Safety & Violence Prevention, Grades 8 12 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues , , ,877 Other Local Revenues Total Revenues 34, , ,877 Expenditures Certificated Salaries Classified Salaries , , ,733 Employee Benefits ,988 8,611 82,493 Books and Supplies , 11,625 15,171 Services and Other Operating Expenditures ,91 12,91 12,91 Capital Outlay , 1, 1, Other Outgo Direct Support/Indirect Cost ,679 28,765 29,57 Debt Service Total Expenditures 34, , ,877 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 38,84 38,84 38,841 Ending Fund Balance 38,84 38,841 38,84

105 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 65 Special Education Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources ,741,827 RevLimit 4,741,827 4,741,827 Federal Revenues Other State Revenues ,62,813 11,582,765 11,97,82 Other Local Revenues ,32 54,32 54,32 Total Revenues 16,344,96 16,864,912 17,189,229 Expenditures Certificated Salaries ,84,851 12,75,716 12,315,278 Classified Salaries ,596,245 1,628,128 1,66,649 Employee Benefits ,986,453 4,122,114 4,221,662 Books and Supplies ,9 144, ,896 Services and Other Operating Expenditures ,88 999,958 1,25,899 Capital Outlay 6-69 Other Outgo ,2, 2,263,799 2,324,92 Direct Support/Indirect Cost Debt Service Total Expenditures 2,737,329 21,234,699 21,697,34 Revenues over Expenditures (4,392,369) (4,369,787) (4,58,75) Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions ,392,369 4,369,867 4,58,244 Total Other Sources\Uses 4,392,369 4,369,867 4,58,244 Net Increase (Decrease) in Fund Balance 22,582 (115,76) Fund Balance Net Beginning Fund Balance 8 Ending Fund Balance 8 249

106 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 666 Tobacco-Use Prevention Education: Elementary Grades 4 8 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,74 34,278 35,237 Other Local Revenues Total Revenues 32,74 34,278 35,237 Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies ,298 31,515 32,397 Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,442 2,763 2,84 Debt Service Total Expenditures 32,74 34,278 35,237 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

107 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 75 Demonstration Programs in Intensive Instruction Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

108 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 791 Economic Impact Aid: Limited English Proficiency (LEP) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,89,4 1,894,441 1,947,485 Other Local Revenues Total Revenues 1,89,4 1,894,441 1,947,485 Expenditures Certificated Salaries ,75 368, ,582 Classified Salaries ,98 537,9 548,9 Employee Benefits , , ,436 Books and Supplies ,359 54,45 54,73 Services and Other Operating Expenditures ,249 18,249 18,249 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,698 56,833 58,425 Debt Service Total Expenditures 1,89,4 1,894,441 1,947,485 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 299,21 299,21 299,21 Ending Fund Balance 299,21 299,21 299,21

109 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 712 Education Technology: Staff Development Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 5,26 5,26 5,26 Ending Fund Balance 5,26 5,26 5,26

110 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 714 Gifted & Talented Education (GATE) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues , ,46 22,933 Other Local Revenues Total Revenues 188, ,46 22,933 Expenditures Certificated Salaries ,46 73,864 75,296 Classified Salaries ,61 14,92 15,2 Employee Benefits ,281 3,311 31,47 Books and Supplies ,12 52,717 55,612 Services and Other Operating Expenditures ,69 19,69 19,69 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,492 5,922 6,88 Debt Service Total Expenditures 188, ,46 22,933 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 9,377 9,377 9,377 Ending Fund Balance 9,377 9,377 9,377

111 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7155 Instructional Materials: Grades K 8 (Includes Disaster funding and Fast Growth) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,393,5 1,288,229 1,37,93 1 Other Local Revenues Total Revenues 1,393,5 1,288,229 1,37,93 Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies ,289,561 1,289,561 1,289,561 Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,939 13,831 15,352 Debt Service Total Expenditures 1,393,5 1,393,392 1,394,913 Revenues over Expenditures (15,163) (87,82) Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance (15,163) (87,82) Fund Balance Net Beginning Fund Balance 1,75,242 1,75,242 1,6,79 Ending Fund Balance 1,75,242 1,6,79 1,512, Source: 859 All Other State RevenueInstructional Materials based on: 27/8 - Prior Year CBEDS estimate of 23,37 * = $1,288,229 28/9 - Prior Year CBEDS estimate of 22,736 * (includes COLA) = $1,37,93

112 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7155 Instructional Materials: Grades K 8 (Includes Disaster funding and Fast Growth) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 1,883 1,883 1,883 Ending Fund Balance 1,883 1,883 1,883

113 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7158 Instructional Materials for Deciles 1 and 2 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 255,62 255,62 255,62 Ending Fund Balance 255,62 255,62 255,62

114 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 723 Transportation: Home to School Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,47,861 1,97,11 1,127,829 Other Local Revenues Total Revenues 1,47,861 1,97,11 1,127,829 Expenditures Certificated Salaries Classified Salaries ,11 42, ,748 Employee Benefits , , ,36 Books and Supplies ,29 392,88 47,16 Services and Other Operating Expenditures (35,298) (35,298) (35,298) Capital Outlay ,38 142, ,237 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 1,47,861 1,97,11 1,127,829 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance

115 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 724 Transportation: Special Education (Severely Handicapped/Orthopedically Handicapped) Education Code s Account Base Year Description Revenues Codes Rule(s) Revenue Limit Sources Federal Revenues Other State Revenues Other Local Revenues Total Revenues , ,672 RevLimit Expenditures Certificated Salaries Classified Salaries Employee Benefits Proj. 1 Proj , , , ,988 Books and Supplies Services and Other Operating Expenditures , , ,988 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 829, , ,988 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance Ending Fund Balance Notes

116 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 725 School Based Coordination Program (SBCP) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 118,38 118,38 118,38 Ending Fund Balance 118,38 118,38 118,38

117 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7271 California Peer Assistance & Review Program for Teacher (CPARP) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues , 251,28 258,315 Other Local Revenues Total Revenues 24, 251,28 258,315 Expenditures Certificated Salaries ,45 113,45 113,45 Classified Salaries Employee Benefits ,25 14,25 14,25 Books and Supplies ,499 96,227 12,54 Services and Other Operating Expenditures ,9 7,1 7,291 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,91 2,253 2,82 Debt Service Total Expenditures 24, 251,28 258,315 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 166, , ,765 Ending Fund Balance 166, , ,765

118 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7286 International Baccalaureate (IB) Program: Staff Development & Startup Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 15,787 15,787 15,787 Ending Fund Balance 15,787 15,787 15,787

119 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7294 Staff Development: Mathematics and Reading (AB 466) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 99,213 99,213 99,213 Ending Fund Balance 99,213 99,213 99,213

120 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7375 Tenth Grade Counseling Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries Employee Benefits Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 14,39 14,39 14,39 Ending Fund Balance 14,39 14,39 14,39

121 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7385 County Oversight Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,62 697, ,493 Other Local Revenues Total Revenues 666,62 697, ,493 Expenditures Certificated Salaries , ,3 291,53 Classified Salaries ,829 14, ,952 Employee Benefits ,371 14, ,114 Books and Supplies ,981 44,668 5,56 Services and Other Operating Expenditures ,78 29,88 3,57 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,722 56,255 57,83 Debt Service Total Expenditures 666,62 697, ,493 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 48,315 48,315 48,315 Ending Fund Balance 48,315 48,315 48,315

122 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7385 County Oversight Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,82 277, ,29 Other Local Revenues Total Revenues 264,82 277, ,29 Expenditures Certificated Salaries ,5 154,91 157,88 Classified Salaries ,92 23,378 23,845 Employee Benefits ,942 58,97 6,321 Books and Supplies ,656 11,232 13,582 Services and Other Operating Expenditures ,5 6,5 6,5 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,752 22,348 22,973 Debt Service Total Expenditures 264,82 277, ,29 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 33,519 33,519 33,519 Ending Fund Balance 33,519 33,519 33,519

123 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7385 County Oversight Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,64 824, ,749 Other Local Revenues Total Revenues 787,64 824, ,749 Expenditures Certificated Salaries , 555,9 567,18 Classified Salaries Employee Benefits ,2 2,159 25,184 Books and Supplies ,132 7,218 Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,638 66,468 68,329 Debt Service Total Expenditures 787,64 824, ,749 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 21,325 21,325 21,325 Ending Fund Balance 21,325 21,325 21,325

124 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7385 County Oversight Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,957,46 2,49,27 2,16,399 Other Local Revenues Total Revenues 1,957,46 2,49,27 2,16,399 Expenditures Certificated Salaries ,769 24,784 28,879 Classified Salaries ,178 83, ,7 Employee Benefits ,447 5,3 512,53 Books and Supplies , 191,227 26,8 Services and Other Operating Expenditures , ,13 161,344 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost , , ,776 Debt Service Total Expenditures 1,957,46 2,49,27 2,16,399 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 621, , ,939 Ending Fund Balance 621, , ,939

125 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 7385 County Oversight Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,543,599 1,616,148 1,661,4 Other Local Revenues Total Revenues 1,543,599 1,616,148 1,661,4 Expenditures Certificated Salaries , ,96 425,427 Classified Salaries , , ,844 Employee Benefits , ,467 15,433 Books and Supplies ,298 43, ,594 Services and Other Operating Expenditures ,954 36, ,193 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost ,782 13, ,99 Debt Service Total Expenditures 1,543,599 1,616,148 1,661,4 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 121,63 121,63 121,63 Ending Fund Balance 121,63 121,63 121,63

126 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 781 Other State Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,937 76,937 76,937 Other Local Revenues Total Revenues 76,937 76,937 76,937 Expenditures Certificated Salaries Classified Salaries , 1, 1, Employee Benefits Books and Supplies ,221 16,221 16,221 Services and Other Operating Expenditures ,475 59,475 59,475 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 76,937 76,937 76,937 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 4,582 4,582 4,582 Ending Fund Balance 4,582 4,582 4,582

127 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 815 Ongoing & Major Maintenance Account (RMA: Education Code Section ) Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues Other Local Revenues Total Revenues Expenditures Certificated Salaries Classified Salaries ,138,899 2,179,44 2,22,719 Employee Benefits , , ,815 Books and Supplies ,89 818,97 841,81 Services and Other Operating Expenditures ,22 412, ,326 Capital Outlay , , ,666 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 4,448,258 4,559,981 4,663,67 Revenues over Expenditures (4,448,258) (4,559,981) (4,663,67) Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out ,84 637,727 All Other Financing Sources All Other Financing Uses Contributions ,448,258 5,223,785 5,31,334 Total Other Sources\Uses 4,448,258 4,559,981 4,663,67 Net Increase (Decrease) in Fund Balance (111,723) (215,349) Fund Balance Net Beginning Fund Balance Ending Fund Balance

128 General Fund Restricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 91 Other Local Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues , 25, 25, Other State Revenues Other Local Revenues ,9 12,9 12,9 Total Revenues 37,9 37,9 37,9 Expenditures Certificated Salaries ,48 21,48 21,48 Classified Salaries Employee Benefits ,792 2,792 2,792 Books and Supplies Services and Other Operating Expenditures ,9 12,9 12,9 Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 37,9 37,9 37,9 Revenues over Expenditures Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance Fund Balance Net Beginning Fund Balance 481, , ,884 Ending Fund Balance 481, , ,884

129 General Fund Unrestricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE No reporting requirements Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources ,225,36 RevLimit 123,13, ,916,93 Federal Revenues Other State Revenues , 5, 5, Other Local Revenues ,12, 1,12, 1,12, Total Revenues 121,845,36 124,723, ,536,93 Expenditures Certificated Salaries ,387,928 59,695,813 6,233,8 1 Classified Salaries ,953,512 16,251,316 16,555,76 Employee Benefits ,4,649 23,442,66 23,815,713 2, 3 Books and Supplies ,92,91 3,5,582 3,86,78 Services and Other Operating Expenditures ,332,931 11,66,814 11,974,937 Capital Outlay ,92,891 1,124,584 1,154,947 Other Outgo Direct Support/Indirect Cost (3,472,888) (3,548,763) (3,566,62) Debt Service Total Expenditures 11,255, ,632,6 113,255,119 Revenues over Expenditures 11,589,382 13,91,659 13,281,811 Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out ,276, , ,994 All Other Financing Sources All Other Financing Uses Contributions (8,934,899) (9,696,84) (9,92,891) Total Other Sources\Uses (1,211,62) (1,39,721) (1,559,885) Net Increase (Decrease) in Fund Balance 1,377,762 2,88,39 3,7,191 Fund Balance Net Beginning Fund Balance 12,556,753 13,934,515 16,716,453 Ending Fund Balance 13,934,515 16,716,453 19,438, Source: 113 Classroom Teachers - ADA Decline AdjustmentAdjustment of Classroom Teachers: 27/8 - Reduction of 18 Classroom $46,816 Average Salary per anticipated decline of 5 ADA. 28/9 - Reduction of 7 Classroom $46,816 Average Salary per anticipated decline of 2 ADA. 2. Source: 341 H&W, Cert.Health/Welfare Adjusted by COLA: 27/8 Estimated COLA 4.7% and reduced by 18 Teachers * $9,5 28/9 Estimated COLA 2.8% and reduced by 7 Teachers * $9,5 3. Source: 342 H&W, Class.Health and Welfare Adjusted by COLA:

130 General Fund Unrestricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 11 State Lottery Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,3, 4,3, 4,3, 1 Other Local Revenues Total Revenues 4,3, 4,3, 4,3, Expenditures Certificated Salaries ,6, 3,672, 3,673,44 Classified Salaries Employee Benefits , 477,36 477,5 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 4,68, 4,149,36 4,15,94 Revenues over Expenditures 232, 15,64 149,6 Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance 232, 15,64 149,6 Fund Balance Net Beginning Fund Balance 232, 382,64 Ending Fund Balance 232, 382,64 531,7 1. Source: 856 State Lottery RevenueFCMAT did not adjust the unrestricted Lottery based on decling ADA. As the district has adjusted for the reduced ADA and Lottery adjustments.

131 General Fund Unrestricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 12 Class Size Reduction, Grade 9 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,738 65,738 65,738 Other Local Revenues Total Revenues 65,738 65,738 65,738 Expenditures Certificated Salaries , , ,921 Classified Salaries Employee Benefits ,312 21,891 25,94 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 65, , ,861 Revenues over Expenditures (1) (16,79) (21,123) Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance (1) (16,79) (21,123) Fund Balance Net Beginning Fund Balance (1) (16,71) Ending Fund Balance (1) (16,71) (37,833)

132 General Fund Unrestricted Program Only Date: 2/26/27 Time: 1:57 AM REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE 13 Class Size Reduction, Grades K 3 Account Base Year Proj. 1 Proj. 2 Description Codes 26-7 Rule(s) Notes Revenues Revenue Limit Sources RevLimit Federal Revenues Other State Revenues ,222,645 6,444,864 6,667,1 1 Other Local Revenues Total Revenues 6,222,645 6,444,864 6,667,1 Expenditures Certificated Salaries ,43,665 2,479,278 2,48,251 Classified Salaries Employee Benefits ,44,141 3,555,836 3,646,747 2 Books and Supplies Services and Other Operating Expenditures Capital Outlay 6-69 Other Outgo Direct Support/Indirect Cost Debt Service Total Expenditures 5,834,86 6,35,114 6,126,998 Revenues over Expenditures 387,839 49,75 54,12 Other Financing Sources\Uses Interfund Transfers In Interfund Transfers Out All Other Financing Sources All Other Financing Uses Contributions Total Other Sources\Uses Net Increase (Decrease) in Fund Balance 387,839 49,75 54,12 Fund Balance Net Beginning Fund Balance 387, ,589 Ending Fund Balance 387, ,589 1,337, Source: 8434 Class Size Reduction, Grades K 3K-3 CSR Revenue based on 97% of Projected K-3 CBEDS Enrollment: 27/8-6,198 *.97 * $1,72 = $6,444,864 28/9-6,237 *.97 * $1,12 = $6,667,1 2. Source: 341 H&W, Cert.Health & Welfare increased by COLA estimate in future years.