SALIDA -- School district officials did not act on several years of warnings about their budgeting and now must slash spending by 10 percent to balance their books after several miscalculations, according to a report presented Monday night.
Stanislaus County Office of Education officials met with Salida Union School District's business staff 14 times over the past several years, pointing out budgeting and accounting errors, some of which have not been addressed.
To help steer the district in the right direction, staff will spend the next year working closely with school business consultant Terri Ryland and Don Gatti, assistant superintendent of business services at the county office of education.
Salida Union Superintendent Doug Baughn said he still has confidence in his business staff, adding that everyone in the district will work together to overcome the glaring bungle.
Most of the 70 people at a Monday night school board meeting were district employees, many of whom sat stunned during Ryland's hourlong presentation.
"It was pretty disturbing when I got the results back," said Ivan Wyeth II, Salida Union board president. "This is going to affect a lot of people's lives, but we're going to get through this."
Officials initially planned on going into the red by $208,000 this school year, but that number ballooned to $730,000, partly because of an error in calculating how much money the district would receive from the state for each student it educates.
That loss adds to what was an already grim budget outlook. It now appears the district will have to chop $2.4 million -- nearly 10 percent of its $26 million budget -- for the next school year. That's up from the $1.3 million the district initially projected cutting.
"That's a big chunk of money for any district," Ryland said. She noted that Salida's position is not unique, that many districts across the state are grappling with declining student enrollment and the recession, both of which bring drastic decreases in funding.
Because of Salida Union's surging budget gap, district officials decided to give their first interim budget review a "qualified" certification, meaning the district might not be able pay all its bills this school year or over the next two school years.
Other budgeting irregularities that officials need to correct include a drop of $400,000 in class size reduction funding and an increase of $640,000 in special education costs.
To help reconcile Salida Union's budget gap, officials moved $1.5 million from two reserve funds -- similar to savings accounts -- but noted that the move can be done only because the extra money is now gone.
Today, district staff will start assigning dollar figures to potential spending cuts, such as how much closing a school would save, or how much a 1 percent salary cut for all employees would save, or how much increasing class sizes by one or two students would save.
Wyeth said every person and program in the district should be considered when making the cuts.
Trustees most likely will form a budget advisory committee of administrators, teachers, staff, parents and community members to suggest spending reductions by March.
"We needed to blow it up, start it over," Baughn said. "We need to address the crisis and start a recovery plan."
The business office employee placed on leave after the error was discovered in November is still on leave, Baughn said. No action was taken on possible discipline or dismissal of that employee during a closed session before Monday's meeting.