The Sacramento City Unified School District board on Tuesday approved the district's 2024–25 unaudited actual financial report after business staff reported a substantial year‑end shift and warned of both a projected multi‑year structural deficit and an urgent cash shortfall risk this fiscal year.

Cindy Thao, assistant superintendent of business services, told trustees the district closed 2024–25 with total revenues of $705.3 million and expenditures of $846.9 million, producing a large year‑end swing in fund balance. Thao said the combined fund balance after required reserves was $157.1 million, including $45.1 million unassigned, and that the unrestricted fund balance declined by about $43.35 million to roughly $62.4 million.

The numbers matter because staff and the county office now project multi‑year deficits unless the district identifies tens of millions of dollars in additional savings. Janae Marking, chief business and operations officer, told the board she is pausing the multi‑year rightsizing plan to pursue an "intensive corrective action" approach because of two distinct problems: a structural deficit that would produce negative ending fund balances in out years and a more immediate, tactical concern that cash could be insufficient to meet near‑term obligations without swift action.

"We are setting this rightsizing plan to the side because we need a new plan of intensive corrective action," Marking said during her presentation, adding that staff will "constrict" unrestricted general fund spending in areas that do not affect classrooms or required services in the near term.

Why it matters: staff said late invoices, payroll timing, prior‑year unpaid obligations and a long history of unbudgeted or unauthorized contracts drove much of the 2024–25 gap. Thao reported $62 million in unauthorized contracts booked in 2024–25, and said about 98% of those were for special‑education services. Marking said the district's special‑education program has growing needs and that special‑education staff estimate an additional roughly $40 million may be necessary to fund minimum services for the year. The Sacramento County Office of Education told the district it would need to identify roughly $35 million in additional reductions to remain solvent given the recent certificated agreement.

Board action: Member Navarro moved to approve the 2024–25 unaudited actuals; Member Benjamin seconded. The motion carried unanimously: Member Jean, Member Benjamin, Member Navarro, Member Singh and Member Ibarra voted aye; the student member cast a preferential aye.

What happens next: staff told trustees the first interim report in December (covering actuals through Oct. 31) is likely to show a negative certification unless quick corrective steps shore up cash and reduce projected spending. Marking said staff will explore revenue options and immediate monthly cash‑constraining steps, and will continue working with sites, departments and labor partners to identify reductions and efficiencies. She warned that a negative certification at second interim (January actuals reported in March) would likely trigger external intervention by the county office or FCMAT.

Ending: Trustees asked for more detail from the special‑education team and for regular, transparent updates. Marking asked the board and all district stakeholders to work collaboratively on decisions that will be needed to protect classroom services while stabilizing the district's finances.