SFUSD board approves unaudited financial report and GAN-limit resolution; deputy superintendent warns of budget control issues

The San Francisco Board of Education unanimously approved the district's unaudited actuals for fiscal year 2024-25 and adopted the district's GANN-limit resolution after a presentation and Q&A with Deputy Superintendent Chris MontBenitez.

The board voted to approve item 2510-14SP1, the unaudited financial report and the GANN limit resolution, following a presentation that laid out the district's adopted budgets, interim revisions and final unaudited actuals along with an analysis of variances.

The presentation showed the difference between the district's planned budgets and what was actually spent. Deputy Superintendent Chris MontBenitez said the district closed the year with an unaudited deficit of about $38 million on general fund operations (revenues of about $1.24 billion versus expenditures of about $1.279 billion), and stressed the need for improved budget controls and a stronger position-control process to reduce multi-month budget variances that inflate "paper deficits." Board members asked technical questions about variance causes, position control and timeline for remediation; MontBenitez outlined training, new staffing and improved processes as the remedy.

Key facts and figures presented (unaudited actuals as read into the record): - General fund unaudited actual expenditures: approximately $1,279,000,000. - General fund unaudited actual revenues: approximately $1,240,000,000. - Estimated unaudited operating deficit (general fund): about $38,000,000 (ongoing structural deficit as presented). - The deputy superintendent recommended limiting budget additions midyear to positions and expenses that are likely to be staffed and to move nonstatutory, one-time funding decisions to next-year budget development.

Direct quotes: "What you're looking at is what I affectionately call the post mortem of last year's budget," Deputy Superintendent Chris MontBenitez told the board. "There is no such thing as a perfect budget. The variance just demonstrates how close or how good of a planner versus an actual following that plan a household is." He later recommended that the district adopt a reserve policy and strengthen position-control staffing.

Board deliberations: Commissioners and student delegates questioned how the district will reduce variances to a healthy target. MontBenitez said a reasonable near-term goal is variances of 10% or less for a budget of this size and that he expected visible improvement within two budget cycles as staff are trained and new systems are implemented. Commissioners pressed for more timely position-control and SELPA (special education local plan area) financial truing up; MontBenitez said those analyses will be a priority and noted the CFO hire and a planned director of position control post.

Vote and outcome: The board approved item 2510-14SP1 by roll call vote, recorded as: Student delegate Munn, Yes; Student delegate Cruz, Yes; Commissioner Alexander, Yes; Commissioner Fisher, Yes; Commissioner Gupta, Yes; Vice President Healy, Yes; Commissioner Wray, Yes; Commissioner Wiseman Ward, Yes; President Kim, Yes. The motion passed unanimously.

MontBenitez said staff will move to deeper month-to-month budget management and to maximize restricted funding when eligible to reduce pressure on the unrestricted general fund. He also said the district will propose a reserve policy at first interim and continue community engagement on the budget over the coming months.