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Schools Find No New Revenue, Report Says : Education: The district OKs a bookkeeping change to use additional lottery funds and state attendance money to cover possible budget shortfall. County superintendent will review the plan.


Los Angeles Unified School District officials have found no additional sources of money to cover a possible budget shortfall this year and instead will pin their hopes on increased lottery revenue and state money for student attendance, according to a report approved by the school board Monday.

County schools Supt. Stuart Gothold ordered the board two weeks ago to submit a plan by Thursday spelling out how it would bridge a potential deficit of $60 million, including $36 million to cover the recent teachers settlement.

After seeing that the district anticipated ending the year with only $6 million in emergency reserves, Gothold had downgraded its financial standing from "positive" to "qualified," the first step in a process that could end with the state taking over the financially battered school system.

The plan revealed Monday does nothing to bring new money to the district and recommended no midyear cuts. By a 5-0 vote, the board gave staff permission to change bookkeeping practices, a move that could provide an additional $10 million to $15 million this year.

With the change, finance officials will be allowed to add new lottery, student attendance or any other unanticipated revenues to this year's budget. Normally such funds go into the next year's budget.

"This is our best response to what the county required," said Los Angeles schools Supt. Sid Thompson.

Thompson said he has spoken with Gothold about the plan and it will be approved. Gothold could not be reached for comment Monday. A spokesman from his office said the report had not been reviewed.

If Gothold does not like the plan, the county can take further steps to control district finances, including appointing a fiscal adviser.

Under state law, school districts must end the year in the black and county superintendents have broad authority to ensure that takes place.

The report was challenged by board member Roberta Weintraub, who asked: "Is this just a puff piece? It looks like we are doing this for no reason." Weintraub abstained from voting on it.

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