Despite closing its Klamath campus to save on rent, Klamath River Early College of the Redwoods still has an $84,000 deficit for the current school year.

In addition to closing its Klamath site, which eliminated a teaching position, KRECR officials eliminated an after-school coordinator and cut its staff salary by 5 percent at its Crescent City site, according to Director Bernadette Johnson. The KRECR board also discontinued health-care benefits for its employees for the rest of the 2012andndash;13 school year.

In a report to the School Board on Thursday, Johnson stated that the KRECR board hired Edtec, which provides back-office services for charter schools, to help ensure KRECR's short-term and long-term fiscal stability.

Hiring an outside bookkeeper was one of three requirements outlined in a letter Del Norte Superintendent Don Olson sent KRECR officials in December when they stated that the school was anticipating a deficit of $168,000 for the 2012andndash;13 school year.

"KRECR is assuring us they can overcome the $84,000 deficit," Olson said Thursday. "But they are in need of further assistance."

Staff with the County Office of Education will look into obtaining financial assistance from the California Charter Schools Association, said Deputy Superintendent Rodney Jahn. The charter schools association would provide a second look at KRECR's financial situation in addition to Edtec's support, he said.

Jahn and Lori Bomke, director of fiscal services, will bring back a list of recommendations and timelines to the School Board's Feb. 28 meeting, Olson said.

"We need to be monitoring (KRECR's) budget closely to make sure they can be fiscally viable to continue operations," he said.

According to KRECR's financial recovery plan, the school has established a separate bank account for scholarship funds. KRECR is finalizing a contract with Edtec to provide accounting services for the remainder of this school year and plans to contract with Edtec for the 2013-14 school year as well.

KRECR officials project a positive ending balance of $200,000 in the 2013-14 school year as a result of discontinuing employee health benefits and the 5 percent reduction in salaries, according to the fiscal recovery plan.

"We feel really good to have established a relationship with Edtec," Johnson said Thursday, adding that she'll bring monthly reports back to the County Office of Education. "We're moving as quickly as possible to make those changes."

When Johnson presented KRECR's first interim financial report and multi-year budget projection to the School Board in December, the board gave the report a negative certification due to the $168,000 deficit.

A negative certification is assigned when a local educational agency will be unable to meet its financial obligations for the remainder of the current fiscal year or for the next fiscal year, according to the California Department of Education. This certification means the agency's County Office of Education may intervene in its finances.

In addition to requiring KRECR hire an outside bookkeeper, Olson's letter also required the school to draft a written financial recovery plan as well as a contingency plan for closing the school.

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