After having its board-approved 2012-13 budget "disapproved" by the county Office of Education, the Portola Valley School District is hoping an amended budget showing an unrestricted balance of nearly half a million dollars will pass muster with the county.
The district, still trying to recover from the financial escapades of former superintendent Tim Hanretty, has managed to balance its budget in large part because of a major boost in funding from the Portola Valley Schools Foundation. Foundation members rallied to raise more money and to allow the district to spend it sooner than it was allowed to in the past after the financial crisis came to light in January.
The foundation has pledged $1.3 million, to be used in the current fiscal year. Last fiscal year's contribution was $975,000.
Although the foundation's contributions are supposed to be incorporated into the following fiscal year's budget, recent audits have revealed that Mr. Hanretty was using the funds to cover costs of the current budget. The foundation has agreed to allow the same-year spending to continue until the district is able to stabilize its budget and re-establish its reserve, which now is empty.
Mr. Hanretty has pleaded guilty to charges of embezzlement and other misappropriation of the district's money. His sentencing is scheduled for this month.
The school board is expected to approve the amended budget on Wednesday, Oct. 3. The district will then submit the document to the county for approval.
In August, the district was informed that the county Office of Education would not accept the budget approved by the board in June. The county cited several factors, including a projected ending deficit, and a concern that the district would be unable to "meet its multi-year financial obligations."
The district has been in danger of going into receivership because of the deep hole discovered in its budget as auditors pored over the books after Mr. Hanretty's January resignation.
County Superintendent of Schools Anne Campbell told the Almanac that her office is working closely with the district to come up with a spending plan that the county can sign off on. "We don't want them to be taken over by the state any more than they want to be taken over by the state," she said.
"The district has done a tremendous amount of work in getting on track to make them fiscally solvent," she added.
Sandra Lepley, the district's interim chief business official, said the amended budget projects a $480,000 balance in unrestricted funds. The ending balance for both unrestricted and restricted funds is $735,000, she said. The district is optimistic that the amended budget will be approved, she added.