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Board accepts FY24-25 unaudited actuals; staff warns of multiyear shortfall
Summary
The board accepted the district's unaudited FY24-25 financial statements, which show a roughly $40 million deficit for the year and a projected multiyear funding shortfall that could jeopardize required reserves by 2026-27 without intervention.
The East Side Union High School District Board of Trustees on Sept. 11 accepted the district's unaudited actual financial report for fiscal year 2024-25, which closes the district's books pending the external audit. The board approved the report by a 5-0 vote.
What the report shows: District staff told trustees the district recorded about $356 million in total revenues and roughly $396 million in total expenditures for FY24-25, producing a deficit spend in that fiscal year of approximately $40 million. The district began FY25-26 with an estimated beginning balance of about $118.5 million and will roll forward with a projected reserve roughly $78.6 million after the closing adjustments.
Structural concern: Finance staff highlighted a multiyear projection that, absent corrective actions, would produce ongoing deficits in FY25-26 and beyond and would prevent the district from meeting the state-required 3 percent minimum reserve by the 2026-27 fiscal year. Staff noted a principal driver: special-education program costs materially exceed federal IDEA and state special-education funding — the report estimates a funding shortfall on special education on the order of $25 million.
Next steps: Staff informed the board that a revised fiscal solvency plan will be submitted to the county by Oct. 8, and the district will present an updated first interim report in December. Trustees were told the budget process will include internal budget-review committees and public budget-advisory committee meetings (first advisory meeting scheduled Sept. 23) to discuss mitigation options.
Board action: Trustee Rafael Arellano moved to accept the unaudited actuals; Trustee Lay seconded. The motion passed 5-0.
Quote: Associate Superintendent for Business said the organization and budget managers deserve credit for keeping actual spending close to projections: "They've come through," staff said, while also warning that the multiyear outlook required corrective steps.
Provenance: topic introduction at 01:24:10 (unaudited actuals presentation); topic finish at 01:33:15 (motion and acceptance).
