Theresa Harrington / EdSource
The Oakland Unified school board discusses new contracts on July 2, 2019.

Oakland Unified has turned to a financial consultant to bring fiscal stability as the district attempts to deal with a recent grand jury report that criticized the district for “a broken administrative culture.”

At the same time, the district will continue its search for a new chief financial officer.

To help pave the way for a new fiscal leader, the school board on Tuesday agreed to hire a well-respected fiscal consultant at a cost of up to $176,000 through December as an interim CFO, who is expected to work alongside a permanent replacement the district hopes to hire in September. Luz Cazares, who founded Lucid Partnerships in nearby Alameda, a consulting organization that specializes in school budget and management issues, has worked as a financial analyst in Chicago Public Schools, a fiscal management supervisor in the Massachusetts Department of Education as well as a CFO in Alameda City Unified and a deputy superintendent for business services in Pleasanton Unified, both in Alameda County.

She is also experienced in “best practices” outlined by the Government Finance Officers Association, said chief systems service officer Preston Thomas, noting that her contract includes creating a budget development process that includes these. Thomas was recently promoted to his newly created position to replace the chief business officer position, which was eliminated as part of a central office reorganization amid budget cuts.

“One of the key criteria is to get operations in a place in which somebody would come in and take over and kind of lead from that place,” said Thomas, who signed the contract on behalf of the district. She will report to both Thomas and district Superintendent Kyla Johnson-Trammell.

The contract would allow Cazares to bring in additional help from other experts, Thomas said, noting that the district has had difficulty recruiting a new CFO since former CFO Ofelia Roxas resigned two months ago. Thomas told EdSource after the meeting that many districts are struggling to find chief business and fiscal officers because there is not a large pool from which to choose.

However he acknowledged that Oakland Unified has special challenges because it is still working to improve its systems and address criticisms raised in a recent Alameda County Civil Grand Jury report, which said the district wastes millions of dollars every year due to a “broken administrative culture.” 

Cazares was chosen from among eight candidates and three finalists based on her knowledge of California laws and school finance, Thomas said, adding that she is not interested in the permanent position. 

Board member James Harris asked about the transition after she leaves.

“What assurance do we have that that knowledge stays?” he asked, explaining that it is important for district staff to be able to continue to operate at her level.

Although the district hopes to hire a new CFO in September, Thomas said Cazares would stay during the transition, to avoid the kinds of “hard, abrupt stops” the district has dealt with when previous fiscal administrators left. Cazares will lay the groundwork for her successor, he said. 

The grand jury report criticized the district’s fiscal systems, saying they were inefficient and failed to maximize economies of scale in purchasing and contracts because the district entered into several contracts with the vendors for similar services instead of consolidating them for one negotiated price.

Thomas said he would work with Cazares to strengthen the district’s systems for payroll, purchasing and contracts.

“She’s an expert in all those areas,” he said, adding that Cazares could also help with recruiting her replacement and handing off the new systems she develops.

Thomas also pointed out that the Alameda County Office of Education has been providing internal fiscal support to the district, which is expected to continue at least through December. The county, he said, has been diagnosing problems in the district’s fiscal department, while introducing “best practices” and coaching staff. 

Harris said it’s important that all staff receive training to ensure that new systems can be well-implemented, especially in light of the central office reorganization that is just being rolled out.

“There’s a whole other cultural piece that needs to happen,” he said. “I want to be sure we are building some fertile ground for the next person to come in. I don’t want to say, ‘We’ve got this.’…It’s not about what’s at the top. It’s about the functionality of the whole organization working together.”

Board president Aimee Eng agreed, saying Cazares could provide a “bridge” in the fiscal department as Thomas works to ensure continuity.

“We have had significant turnover that has been difficult,” she said.

Last week, the board approved its $568.9 million 2019-20 budget although several board members said they were not confident in its accuracy, in part because the fiscal department was short-staffed after the CFO left two months ago. They asked the fiscal department to bring back more information to corroborate its projections in September, after it has time to analyze actual revenues and spending from the “closing of the books” as of June 30. 

Thomas said working with the district’s interim controller to ensure the accuracy of the budget would be one of Cazares’ primary and “absolutely critical” responsibilities. He also noted that the district will be undergoing some audits, which he expected Cazares to help facilitate. He said Cazares would also coach the interim controller and other staff members. 

District parent Michael Louden spoke against the contract, saying the district would in essence be paying for two CFOs through December after a permanent hire is made. He said it seemed like “a terribly rushed idea,” especially in light of the grand jury report, which pointed to overspending on consultant contracts. Instead, he said the district should have been able to handle the duties Cazares will take on in-house.

But board member Jody London said the district had to hire an interim CFO because it has had “extreme difficulty recruiting for this position.”

The board also approved a Tentative Agreement with its Service Employees International Union on the heels of its agreement with the teachers’ union, which will provide a one-time 3 percent bonus, a 3 percent raise retroactive to Jan. 1 and a 2 percent raise in 2019-20. The agreement is expected to cost nearly $3 million through 2020-21. This is the same as what the teachers’ union negotiated for 2018-2020, but does not include the additional 3.5 percent increase teachers are slated to receive Jan. 1, 2021 or the 2.5 percent raise teachers will get effective June 30, 2021. Instead, the district and SEIU have agreed to reopen salary negotiations for 2020-21.

Although the Alameda County Office of Education said it appeared that the district could afford the SEIU agreement, it noted that this is contingent on the district board’s commitment to cutting $10 million in 2020-21 and $10.5 million in 2021-22.

Editor’s Note: As a special project, EdSource is tracking developments this year in the Oakland Unified and West Contra Costa Unified School Districts as a way to illustrate some of the most urgent challenges facing many urban districts in California. West Contra Costa Unified includes Richmond, El Cerrito and several other East Bay communities.

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