What to Know
- An accounting mistake led to a $4 million deficit at the end of the 2017-2018 school year.
- In September, the district was on track to be $30 million in debt by the end of the 2018-2019 school year.
- District officials were collaborating with union leadership to revise the 2018 budget, with guidance from the County Board of Education.
The Sweetwater Union High School District Board of Trustees approved the cash-strapped district's plan to offer early retirement incentives to hundreds of teachers despite the County Office of Education pressing for more information gathering.
The SUHSD recently made cuts to fill a $30 million budget gap. Along with adding two work furlough days for employees, the district offered eligible employees incentives to retire early.
The teachers union told NBC 7 last week that nearly 100 teachers agreed to retire mid-school year with an additional 50 agreeing to retire at the end of the 2018-2019 school year.
The County Office of Education, which is in charge of making sure school districts can pay their bills, approved the district’s revised budget that was submitted last month and also sent in a financial advisor to oversee finances.
However, on Monday, the county suggested the board not approve the early retirements without submitting a detailed reduction plan for their office to review.
"A decision to approve nearly $19 million in payouts to 308 individuals is fiscally irresponsible when considering the District's current financial crisis," Michael L. Simonson, Assistant Superintendent of Business Services with the San Diego County Office of Education said in a letter sent to school board President Kevin Pike.
The letter also suggests payouts may not be necessary and that the district could save the same amount of money in the long run, without spending any now, through natural attrition.
Read the full letter here.
On Monday, the board approved the district's plan unanimously.
A total of 300 district employees agreed to take the early retirement offer. Those include certified and classified employees.
Sweetwater Education Association President Gene Chavira said 144 certified employees including teachers and counselors have taken the option for early retirement. Of those, 94 will leave at the end of 2018. The remaining 50 will leave at the end of the 2018-2019 school year, Chavira said.
Sweetwater Union High School District spokesperson Manny Rubio said last week that the district is working with an outside company to determine the real-time cost savings of the move to decide if it's worthwhile.
Lakeside resident Bob Crowley says one question still needs to be answered.
"It's the ends to a bad situation, but still, where did the $30 million go? Yea, that's a short-term solution, but they still have to find the $30 million. Where is it?" he said.
The state-funded Fiscal Crisis Management Assistance Team (FCMAT) has been investigating the district's finances and presented its report at Monday's meeting.
According to the county, the report found discrepancies in the district's budget compared to actual expenditures.
A statement from the county in response to the FCMAT's findings read in part:
"FCMAT’s concerns about SUHSD 'include but are not limited to deficit spending; inadequate fund balance; insufficient reserve levels; approval of bargaining agreements that exceed the district’s ability to support them; lack of position control; no reconciliation of payroll with budget or human resources records; inadequate internal controls over cash and other vital operational areas; … financial and operating systems that are not integrated with one another and rely on a single programmer to troubleshoot and clear monthly payroll tables; and millions of dollars of county-office-processed payroll left unposted for months in the district’s financial system.'”
You can read the full report here.
The county said FCMAT would begin a "extraordinary audit" to determine if any fraud or misappropriation occurred.
There are more than 2,000 teachers in the district, according to the SUHSD spokesperson.
The district serves an estimated 40,000 students in 28 schools including 11 middle schools, 13 high schools and four alternative education sites.