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Sacramento City Unified faces tighter county oversight of its payments as its financial crisis is projected to stretch for years.
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The Sacramento County Office of Education and the county Department of Finance recently established new rules requiring the district to submit planned payments two days in advance so officials can ensure there is enough cash to cover them.
Chad Rinde, Sacramento County’s Director of Finance, told trustees in Thursday’s school board meeting to think of the procedures like managing a personal bank account.
“If you don’t have adequate funds, the bank is going to stop you at some point. They’re not going to honor your checks. Your debit card won’t work,” Rinde said.
“It’s the same thing with the local government as well.”
The district has been one of only two in Sacramento County with “fiscal accountability status” since 1998, allowing it to issue payments without first seeking approval from the county. County officials are now implementing safeguards around that decades-old arrangement because of the district’s financial crisis.
The new procedures also call for monthly meetings between district, county and SCOE fiscal staff to review payment issuance. If the district does not comply with the procedures, Rinde warned, it could lose its current independence in issuing payments.
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“I don’t have discretion to allow you to go in the negative,” Rinde said.
“So if the district does issue checks that you have inadequate funds for, I can’t honor those. I don’t have a magic pot of funds to be able to honor that.”
In a letter to district Superintendent Cancy McArn dated July 1, Rinde and Nick Schweizer, associate superintendent for the Sacramento County Office of Education, said the procedures could be revised further as the district’s financial condition develops.
The development comes as Sacramento City Unified has scrambled in months to address an unprecedented deficit projected to reach nearly $284 million in 2026-27 and nearly $510 million by 2028-29.
In June, district officials continued to project that Sacramento City Unified could face a cash deficit by November. If the district requires an emergency state loan, it could lose local control while the loan is repaid with interest. Under state receivership, interim leadership would be appointed and the district would face stricter oversight.
Read more Sacramento City Unified faces new county payment oversight amid budget crisis