Independent review validates district's five-year forecast but confirms $25 million shortfall
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Summary
CFO Heidi Sun told the Salem-Keizer School District board that a 10-week review by Affton LLC validated the district's forecasting model and assumptions; the forecast still projects a $25 million structural deficit and the review delivered a validation tool for future checks.
Heidi Sun, Salem-Keizer School District chief financial officer, told the board that an independent, 10-week review of the district's five-year financial forecast found the district's model was calculating as intended and that most major assumptions were "strongly validated." Sun said the district is now planning reductions against a projected $25,000,000 structural deficit.
"We are forecasting right now a $25,000,000 structural deficit that we are planning reductions for," Sun said, and added that if the forecast were off by 5 percent the difference would be roughly $1.2 million — a level she described as manageable for planning purposes. Sun said Affton delivered a validation tool the district can use in future updates.
The review focused on two goals: testing the mechanics of the forecasting tool and validating the assumptions used to produce revenue and expense projections. Sun said Affton tested the model against historical district data and external sources and compared multiple calculation methods. "Across these inputs, Affton was able to confirm that the calculations the model was calculating correctly and was working as designed to work," she told trustees.
Board members asked about the cost and frequency of outside reviews. Sun said the engagement cost about $80,000 and that while there is no single best-practice interval, districts typically engage third parties periodically to avoid complacency in modeling.
In response to concerns about whether state funding accurately reflects local need, the superintendent noted earlier state-commissioned research: a report by AIR concluded Salem-Keizer was underfunded by approximately $7,000 to $8,000 per student. The superintendent clarified that the Affton engagement validated the district's internal forecasting mechanics, not whether state funding formulas match actual instructional costs.
Board members and district staff said they would prioritize a set of Affton's operational recommendations intended to make the tool more nimble and to address a small number of inputs that were "partially validated." Sun said those items represent relatively small dollar amounts and the net effect on the forecast was around $150,000 in offsetting adjustments.
The review and the delivered validation tool are intended to give administrators a reliable basis for planning budget reductions and for demonstrating to stakeholders the technical basis for recommended cuts.