IRVINE : School Budget Report Reveals Uncertainties

The state-required interim budget report required of all public school districts had always been a routine matter for the Irvine Unified School District, until the county went bankrupt.

For the first time in the school district’s history, administrators say they are only able to give a “qualified certification” to the district’s finances, due to uncertainties over $107 million frozen in the county investment pool.

The designation falls one step below the routine “positive certification,” which assures that financial obligations will be met for the current school year and two additional school years. The budget for the district this year is $100 million.

The qualified status of the district is an acknowledgment that Irvine Unified may be unable to meet future financial obligations, according to Deputy Supt. Paul Reed. He said the school district expects to have enough cash on hand to operate through April.

Although Reed’s cash-flow projections fall short of the entire school year, the district is not filing a “negative certification.” Such a certification is an admission that a school district will not be able to meet all financial obligations. A negative certification would prompt state officials to take over management of the district.

Because of uncertainty over how the county will respond to school districts, Reed said the district is unable to predict its financial future at this time.

The most serious problem ahead for Irvine Unified is a $54.5-million loan payment due June 14. But there have been recent indications that a majority of county supervisors may support a full return of the principal invested by county school districts.