The Upland Unified School District board was required to adopt a budget by June 30, regardless of the shortfall, but board members intend to make adjustments by the middle of August.
"We have until June 30 to adopt this budget ... even though we have other things going on," said school board member Steve Frazee. "In an ideal world we could wait a couple weeks until everything settled down. We don't have this option. It has to be adopted."
The board adopted the budget Tuesday.
Over the next few weeks, district officials will revise their budget based on the state budget, budget requirements by the San Bernardino County Superintendent of Schools Office as well as employee concessions, said Liz Seymour, the district's senior director of fiscal services.
District officials reached an agreement Tuesday with the Upland Teachers Association on concessions, which will be included in the revised budget.
The district's budget was given a negative certification by the San Bernardino County Superintendent of Schools Office after finding the district would not meet its financial obligations in the next fiscal year.
In May, the district was faced with a $9 million deficit in the 2013-14 fiscal year.
About $2 million in cuts have been made to classified, certificated, confidential and management positions, decreasing the deficit to $7 million, officials said.
The district made $1.53 million in cuts to certificated positions through attrition.
However, $119,000 in classified positions were cut by layoff and $339,000 in confidential and management positions were also cut through layoff.
The district's revenue limit for restricted and unrestricted general funds is $60.9 million and $57.9 million in only the unrestricted portion of the general fund.
Employee salaries account for 87 percent, $56.6 million, of both the restricted and unrestricted general fund budget and 91 percent, $42.9 million, of the unrestricted budgets.
Health and welfare is nearly one quarter of the budget, totaling $12.9 million, Seymour said.
Superintendent Nancy Kelly said the district is spending more money than it is taking in, and it has not made the necessary cuts over the past several years.
"Some districts over-cut. Some districts under-cut. Some districts cut right in the middle," Kelly said. "In Upland, there were less cuts than necessary. Now it's time for us to sit down and say what we can cut to balance our budget. That's going to be some tough conversations. We're going to have to make some decisions."
The district's average daily attendance dropped from 96 percent to 95.7 percent, resulting in a loss in average daily attendance funding.
A one-percent increase in attendance could lead to an additional $600,000 in funding, which equates to two furlough days, Seymour said.
Kelly said one of the immediate actions the district should take is work with principals to improve attendance, which is low for a unified school district such as Upland.
"Many years ago, you were funded whether or not students were in schools as long as you excused their absences," Kelly said. "Now that's changed and unless the student is in schools, we're not funded, so we need every student in school every day so that we can maximize the use of our ADA, which will help with our budget."
Kelly said she will be making recommendations to the board on where she believes cuts can be made and where budgets could be streamlined.
"We will look at everything in the budget to see where we can cut back, so we don't have to keep going back to our employees to ask them to take cuts in order to help us balance," she said.
Seymour said cash flow continues to be a major concern.
"We are currently projecting to continue to face our first shortfall as early as the end of October as soon as the payroll for the certificated employees is extracted," she said. "We do not have any current authority to borrow funds at this time."
The district will submit its revised budget to the county in early August and could receive a new certification by Aug. 15.
Should the county conditionally approve the budget or disapprove it, the district will have to revise the budget again by Sept. 8.