SFUSD 2022-23 and 2023-24 Budget Numbers and Narratives
Budgets are moral documents. How do the numbers add up and what story are these numbers telling?
[TLDR: click here to skip the numbers and get right to the narratives.]
Slides immediately below are from the March 14, 2023 Board of Education meeting presentation: second Interim Report on the 2022-23 Fiscal Year budget. Spreadsheets are numbers transcribed from this and other SFUSD reports.
The $20M audit adjustment was not used to address the shortfall (red numbers) but was set aside as a reserve. There was active discussion of the high costs to fix the Empower payroll system at the time. These funds were not spent this fiscal year. During the presentation staff mentioned the source of the $20M was “Prop G”.
The Restricted budget doesn’t show a shortfall (no red numbers). Doesn’t have a pattern of overspending like the Unrestricted budget.
Declining enrollment could be used as a justification to cut the Unrestricted budget.
The Restricted fund has a large surplus that can be spent over multiple years.
The Unrestricted fund is framed as a problem area while the Restricted fund is not.
An additional $20M (yellow cells) was added to the Unrestricted fund between the December and March interim reports. This is the audit adjustment mentioned above.
An additional $82M (green cell) was added to the Restricted fund over the same period.
The separation between the two funds is framed as rigid.
This is a definition from the California Department of Education guide (Page 310.01):
Looking at the 2nd interim Standard Account Code Structure (SACS) report, the Total Revenue number ($698,847,353) matches the Unrestricted Revenue number shown in SFUSD staff presentation slides.
But the Expenditures number in the report ($564,357,187) does not match the Unrestricted Expenditures number ($724,635,277) shown in SFUSD staff presentation slides.
The difference is a $160,278,090 contribution of Unrestricted revenue to the Restricted fund.
In the presentation slides t
his amount is added to Unrestricted expenses and subtracted from Restricted expenses.
This seems like it could be a standard accounting practice. But the effect of the SFUSD staff presentation slides gives an impression that the Unrestricted fund is overspending and is problematic.
At the end of the day, the totals are the same, but if the expenditures were shown in the fund they are actually spent in, the presentation would paint a different picture.
The contribution that transferred $160M of revenue from one fund to another seems to show the separation between the two funds can be flexible.
Slides below are from the June 6, 2023 Board of Education meeting presentation: FY 2023-24 Recommended Budget & Multi-Year Projections.
The Unrestricted fund had $20M lower expenditures than projected.
$40M Shift from Unrestricted to Restricted. Again showing the separation between the funds can be flexible.
Next year’s Unrestricted budget is balanced. The framing: problem solved! We’re in great shape.
Where exactly did the $100+M of new revenue come from last year? Will it not be available going forward?
The shortfall (red numbers) is now in the Restricted Fund column. But that’s OK, because it will be paid out of the ending balance. The Unrestricted fund ending balance is set aside for reserves.
If SFUSD grants the Teachers Union the raises they are asking for, the district will be in the red.
Note this only shows the Unrestricted budget.
Another slide shows the effects of setting aside a $50M reserve for “Unsettled Labor Commitments” every year. This implies the district would still be solvent if the Teachers Union got half of what it was asking for.
Narratives
The overall narrative: The experts at the SFUSD central office have done the hard work of solving the budget shortfall crisis. But this newfound stability is threatened by unreasonable demands from the the Teachers Union that will just lead to another crisis.
An alternate narrative: There seems to be some flexibility in how SFUSD’s budget is presented and how dollars are categorized between funds. SFUSD staff was successful in finding more than $100M in additional revenue that hadn’t been budgeted at the start of last fiscal year. SFUSD staff should use similar creativity and resourcefulness to find a way to meet the union’s demands to pay our teachers a living wage.
Wishlist for SFUSD finance from parents and taxpayers who might be data nerds:
Present Unrestricted and Restricted budgets side by side whenever possible to show a holistic picture.
Post an Excel or CSV file with budget numbers presented at Board meetings along with the other agenda documents so we don’t have to transcribe them. [The spreadsheets used for this post are available if you send an email to info (at) sfeducationalliance (dot) com]
Provide Board Commissioners with a comprehensive list of Restricted revenue sources showing projected amounts for each year into the future and their expiration. Only the ones contributing more than $1M/yr if that’s easier. One slide in the 6/3/23 presentation had some of this info but it was admittedly incomplete. Commissioners should know these things before they commit to approving next year’s budget.
Bring back the budget dashboard or at least make current datasets available for download. The dataset for the most recent available year was used for this interactive data visualization tool (click the screenshot to try it yourself!). It seems hard for parents and even commissioners to understand where the money is coming from and where it’s going. Sankey diagrams like this could help.
