Alameda County Office of Education Issues Conditional Approval of Oakland Unified’s 2026-27 Budget and Shares Positive News

Dear Oakland Unified Community,

I want to share positive news with you that we received from the Alameda County Office of Education (ACOE). We received County Superintendent Alysse Castro’s September 15 letter in response to our 2026-27 Budget and Local Control and Accountability Plan (LCAP). The letter underscores that the District still has work to do, but it also echoes what my team and I have been saying for months now - that our District is moving in the right financial direction.

ACOE has conditionally approved OUSD’s 2026–27 Budget and LCAP, which means the District must take additional actions before receiving final approval. That said, ACOE acknowledges that the District has submitted a budget with a positive fund balance, meets required reserve levels in each year of its multiyear projection, and has adopted a commitment to close its remaining structural deficit through our Financial Stabilization Implementation Plan. In fact, Superintendent Castro stated that the District's budget “is a materially stronger submission than the District has filed in recent years, and it reflects difficult and deliberate work.”

Highlights of Superintendent Castro’s Letter

• Meaningful progress on structural issues: ACOE says OUSD staff and the Board of Education are now taking the necessary steps to identify, approve, and implement difficult budget decisions.
• Better use of Restricted funds: The District is more effectively matching eligible expenses with available Restricted and categorical resources.
• Clear recognition of the problem: The Board has formally acknowledged its obligation to make the reductions and adjustments needed to avoid fiscal insolvency.

Superintendent Castro also stipulates that additional state funding and one-time resources improve the situation but do not eliminate the need for future reductions. As part of the County’s conditional approval of our Budget and LCAP, there are a number of steps that we must take in the coming months. 

Steps District Must Take

• Publicly report progress on implementing its 2026-27 Financial Stabilization Implementation Plan.
• Ensure necessary budget-balancing measures are ready for Board action no later than February 2027.
• ACOE will review the District's progress before the statutory deadline of November 8, 2026.

One additional important point is that Superintendent Castro also sent us this Annual Report Regarding Fiscal Solvency of the District covering 2025-26. That letter indicates, “ACOE has worked closely with the incoming OUSD team to review these changes, including reviewing budget assumptions and revisions line by line, receiving back up and clarity on questions raised, and ensuring they coordinate with their external auditor for additional compliance.”

Final Analysis

Superintendent Castro’s letter delivers a mixed but notably positive assessment. The approval is conditional because the District still has a structural deficit and must continue to work through all of the future reductions needed to maintain fiscal stability.

One of the most important takeaways, and one that has me thanking the Board and my team, is that ACOE sees OUSD as moving in the right direction, with meaningful improvements in budgeting practices and fiscal discipline, but with difficult work still ahead to turn short-term balance into long-term financial sustainability.

I appreciate the analysis and support of Superintendent Castro, and I can attest that we will continue the work that will ensure the District's fiscal health and stability well into the future.

In community,

Dr. Denise Saddler
Superintendent