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County may seize Yosemite Unified

Wendy Alexander/The Madera Tribune
Madera County Schools Superintendent Cecilia Massetti may take over ailing Yosemite schools.


Financial problems focus of concerns, says Massetti


Madera County Superintendent of Schools Cecilia Massetti has notified the Yosemite Unified School District that the Madera County Office of Education considers YUSD to be in poor fiscal health and is at risk of becoming insolvent.


In a letter addressed to YUSD board president Tammy Loveland, dated January 12, Massetti stated that under the provisions of AB1200, her office is exercising its legal authority to “stay or rescind any action that is determined to be inconsistent with the school district’s ability to meet its obligations for the current or subsequent fiscal year.”


In accordance with that notice, Massetti has placed a fiscal advisor, Jamie Perry, to work with YUSD administrators “to analyze and improve the district’s financial condition.”


Massetti further informed Loveland that Perry will “retain full stay and rescind authority (over district finances) and shall continue until the district is able to attain a qualified financial status.”


Steve Carney, chief business officer for the MCOE has been attending meetings of the YUSD school board and meeting with district staff to keep abreast of the district’s unhealthy financial developments.


Massetti indicated to Loveland the MCOE lacks confidence in YUSD to manage its finances without outside assistance. To that end, the County has engaged the Fiscal Crisis and Management Team (FCMAT), a state agency, to assist in the fiscal rehabilitation of YUSD.


Yosemite Unified’s fiscal problems are serious this year and expectations are they will only get worse. The 2017-2018 budget indicates a decrease in its fund balance of $1,129,207. The 2018-2019 budget forecast shows deficit spending of $1,586,375, and a decrease in fund balance of $1,880,161 in 2019-2020.


The required three-year budgetary projection shows that YUSD will maintain the minimum reserve of 3 percent in only one year — 2017-2018. The 2018-2019 year falls short of the mandated balance by $501,199, and the 2019-2020 year misses the required 3 percent by $2,324,473.


Here’s what caused fiscal dislocation


Personnel problems have been cited by Massetti as one of the reasons for the district’s problems. She cites the following adverse situations:


• Yosemite Unified’s 2017-2018 budget was prepared by an interim school superintendent who resigned June 30, 2017, leaving a host of questions as to how that budget was developed.


• The district then hired a new schools chief with the dual role of superintendent/chief business officer.


• The payroll position became vacant for the 2017-2018 school year and remained open until September 2017. The replacement for this position took another job in November, leaving the position open again. It remains vacant.


• The executive assistant to the superintendent left the district in November.


•The assistant business manager was laid off in July, leaving the “major budget and fiscal position in the district vacant.


• A director of special projects was hired in August and was put in charge of the Business Department. This individual had no experience in accounting.


• In December 2017, the director of special projects resigned, leaving the Business Department without a “hands-on” staff.


• In 2017, the district had to hire a new principal of the high school, a director of special education, and a principal of one of the elementary schools.

Other red flags


In addition to personnel problems, other red flags emerged in YUSD that eroded confidence in its ability to handle its own finances.


• A plan of proposed budget cuts has not been brought to the school board.


• The current business staff lacks the capacity to identify budget cuts, keep the budget current, and follow statutory guidelines for layoff of staff.


• If budget cuts are not made by March 15, it is likely the district will deplete its cash balances by October 2018.


• The business services department lacks capacity to complete ongoing tasks.


• Internal control procedures are lacking and putting the district at risk. These include cash not being deposited in a timely manner, cash levels in funds not monitored, and lack of authorized staff on site to make decisions.


According to Carney, YUSD submitted its 2017-2018 budget to the MCOE in July with a multiyear projection for the current year, 2018-2019, and 2019-2020.


Carney said the district was required in January to submit a first interim report on its budget and give it a designation of positive, qualified, or negative certification.


Yosemite Unified labeled its first interim report qualified, but given the concerns the county had regarding the district’s finances, the certification was reduced from qualified to negative.


It was this negative certification that moved the MCOE to take action on YUSD finances.


The district must submit a second interim report to the MCOE in March.


Yosemite Unified School District is made up of Yosemite High School, Coarsegold Elementary School, Rivergold Elementary School, and Yosemite Adult School.