In 2003, Oakland Unified School District went into state receivership. In other words, it went bankrupt, and the state had to bail it out. Today, the school district is still under state control and, incredibly, continues to experience financial problems.

Given Oakland Unified School District’s history of scandals and fiscal mismanagement, it comes as no surprise it is still in financial chaos. Unfortunately, taxpayers have been footing the bill for the district’s incompetence and ill-advised financial moves.

According to the Oakland Tribune (July 7, 2008), “Five years after the state assumed control of the nearly bankrupt Oakland school system, the district’s finances remain on shaky ground, an investigation by the Alameda County Civil Grand Jury has concluded.”

The article continues, “The brief report… expressed concern about the Oakland Unified School District’s future. The authors concluded that the district’s fiscal department has made improvements, but its efforts have been ‘hampered by continuous staff turnover, particularly in the area of finance.’”

Obviously, the school district is continuing to plan poorly for its fiscal needs and the way it allocates resources when “[t]he grand jury also suggested that the district is not doing enough to protect its budget against sharply dropping revenues — a phenomenon caused in large part by the dwindling number of students attending district schools.” 
 
As the state faces a $15-plus billion deficit, it simply cannot afford to, nor should it have to, bailout a school district that continually misspends taxpayer dollars. Why should taxpayers be punished for the ineptitude of school district officials? Why reward a school district for poor fiscal management? Taxpayers—and the children who attend the district’s schools–deserve better.

The current system allows school districts to spend recklessly more money than they receive in revenues. State receivership is a long process that does not encourage state officials to intervene before a school district teeters on the edge of a fiscal abyss.

Clearly, this lack of state oversight and intervention is a serious systematic problem that begs for corrective action. Financial problems should be identified before school districts become financially insolvent. A structure that requires more oversight and accountability would ensure school districts remain solvent before more districts, and the children they educate, fail their primary mission due to financial negligence.

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