L.A. District Finds Extra $228 Million on the Books

The Los Angeles Unified School District discovered this week that it has a budget balance of $578 million left over from last fiscal year, far higher than the $350 million it had originally estimated in March.

But district officials, who scrambled to cut $110 million out of the budget in the middle of last fiscal year because of dire projections, could not agree about how they inadvertently saved $228 million. The district has a $5.8-billion general fund.

District Supt. Roy Romer said during a phone interview from Colorado that more money than expected was saved through the deep cost cutting in the middle of the year. Board of Education President Caprice Young said that the initial estimate of a $350-million cushion may have included errors because of poor accounting.

And Joe Zeronian, the district’s chief financial officer, said he didn’t have any idea why there was such a discrepancy.

“We haven’t analyzed it yet, and we don’t know why these things have happened,” he said, adding that projections in previous years had been far more accurate.

District officials were torn between relief that they had such a large cushion and dismay that their estimates were so off-base. Some of the money will be applied to this fiscal year’s budget, which was slashed by an additional $430 million.

“I think it is a terrible situation that we find ourselves in,” said board member Jose Huizar. “This signifies that we have to do a much better job in our accounting, and I think it’s unfair when we harm our students with cuts throughout the year and then say, ‘Oh we do have the money.’ ”

Board member David Tokofsky said the extra funds will increase suspicion among union members, who are in the middle of tense contract negotiations with the district.

Teachers union president John Perez could not be reached for comment. Former UTLA president Day Higuchi said the carry-over proves the union contention that there is money for pay raises. “Despite all of the agonizing and the talk about how to make cuts ... there is still some slush in the system and no one should talk about going the next five years without a salary increase.”

Huizar, Young and Tokofsky agreed that a $70-million cut that increased class sizes in fourth through 12th grades was the most regrettable action. That move cannot be reversed because year-round schools started classes in July; teachers have already been assigned and transportation routes determined.

“If we had known in cutting that back in April that we would have a ... surplus in August, it’s likely that we would not have increased class sizes,” Young said. “I know I would not have.”

The school board made its cuts because of state funding cutbacks and the increased costs of special education, workers’ compensation and legal services.

The cuts forced schools to reduce the number of teacher aides, librarians and school police. Schools also had to cut transportation costs, accounting and internal audits among other programs.

Throughout the process, budget officials spoke of the predicament in dire terms.

“We’re obviously working through a very difficult time,” Romer said earlier this year. “The only way we’re going to survive is to redouble our efforts.”

In past years, the district has been harshly criticized, especially by the teachers’ union, for routinely budgeting more than it spends. After a newly elected school board dismissed former Supt. Ruben Zacarias, his interim successor brought in Zeronian to clean up the budget process.

But it remains difficult for the district to closely track spending because of antiquated computer systems that cannot, for example, pinpoint the number of employees working for the district at any time.