Auditors say ‘substantial doubt’ Sacramento City Unified schools can stay afloat

The Abridged version:

• A new audit report stated “significant uncertainty” when it comes to Sacramento City Unified’s financial future.
• The district is facing a $170 million budget deficit and is on track to run out of cash by July. So far, district staff say they have identified about $82 million in savings.
• The most recent findings echo diagnoses from other experts, who say Sacramento City Unified has been in trouble for years.

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Yet another expert has issued warning about the financial situation in Sacramento City Unified School District.

In a report released this week, Auditors with Crowe LLP, an accounting and consulting firm, said unsustainable expenses, declining enrollment and leadership turnover have created “substantial doubt” that the district will be able to pay its bills and stay afloat in the near future.

The consultants outlined their concerns in a report released this week. Members of the audit team are also expected to present at the school board’s meeting Thursday evening.

Sacramento City Unified is staring down a $170 million budget gap. So far, staff have identified about $82 million in savings.

Same story for Sac City

The most recent audit of Sacramento City Unified matches what many have said: The district had a problem years ago that was not corrected.

Leaders were preparing to take on the challenge of righting the fiscal ship around 2019. But when the pandemic hit and temporary relief grants poured in, the district had enough money to put pause on any real system reforms.

Now, that one-time money is gone, and the problems are unavoidable.

Board members approved a recovery plan just before the end of 2025. However, many of the fixes have been either slow to manifest or been scratched from the list.

“Despite efforts to address the District’s financial challenges,” the auditors wrote in their report, “significant uncertainty remains.”

Districtwide finger pointing

Among the reasons for the district’s predicament, the consultants note, are expenses that eclipse funding, as well as instability in the administration.

Interim Chief Business Officer Lisa Grant-Dawson has been with Sacramento City Unified since January. Her six-month contract follows the previous budget official’s departure in November and comes as the district continues to search for a permanent replacement.

During her stint so far, Grant-Dawson has run into frustrations from board members, who say they are tired of feeling like the last to know.

Grant-Dawson is set to give her most recent budget update at Thursday’s board meeting. In her presentation, she notes the district is currently expected to run out of cash by July.

Savannah Kuchar is a reporter covering education. She came to Sacramento to be a part of the Abridged team and contribute to a crucial local news source.