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Board warned CDE could take over financial control if SFUSD fails to file a balanced budget by July 1
Summary
District staff explained that if the board does not adopt a budget and submit it by July 1, the California Department of Education can prepare a budget at the district's expense, withhold apportionments, and impose oversight measures; qualified or negative fiscal certifications could lead to state fiscal intervention.
District staff used part of the June 26 special meeting to walk the board through statutory and administrative consequences of failing to file a budget by the July 1 deadline. Because San Francisco is a single unified administrative body, staff said the California Department of Education (CDE) acts in the role a county office would normally play for other districts.
Deputy Superintendent Myung Lee reviewed the statutory steps: if a district does not submit a budget, the state would develop a budget for the district by September 15 at the district's expense; the state could withhold state apportionments and decline to approve warrants; and a qualified or negative certification could trigger assignment of a fiscal expert, withholding of compensation and possible rescission of local governing authority in extreme cases.
Nut graf: Staff framed the July 1 interim submission as an important protective measure because it keeps the district in the state's standard fiscal process and preserves local control options. "If a school district does not submit a budget CDE ... will at the district's expense develop a budget, by September 15 and transmit the budget to the governing board," Myung Lee said.
Board members used the discussion to underscore the urgency of the July 1 deadline while also seeking clarity about the amount and specificity of reductions to show CDE that the district has a credible plan. Staff said the July submission will be a placeholder in some respects but must be accompanied by an action plan and assumptions; further recertification could follow after the governor signs the state budget and bargaining results evolve.
Ending: The board directed staff to submit an interim budget consistent with the presentation and to continue to document the actions underway to close the gap so the district can maintain a positive fiscal certification or demonstrate a credible path to balance.
