Oakland Schools May Have to Repay Millions

The troubled Oakland Unified School District may have to repay $163 million in state and federal money it failed to track properly in 2002-03, the year before the state took over the district, an audit has found.

State Controller Steve Westly, whose office conducted the audit, said Friday that Oakland officials also failed to monitor how the district spent $322.5 million from construction bonds, which could limit its ability to issue future tax-exempt bonds.

The audit made 130 specific recommendations to correct deficient record-keeping, most of which were to follow existing rules the district had flouted. A separate independent auditor is still investigating whether fraud was committed.

The state took over management of the 46,000-student school district last June.