Inglewood Unified is one of seven school districts in California that’s operating in the red, but district leaders believe they’ve done the right things to keep the double-doors open.

At the same time that the Inglewood Unified School District made the state's list of districts on the verge of bankruptcy, it also got the green light for a $17 million loan to meet its employee payroll. In spite of eliminating 223 employee positions (mostly teachers) in the past two years, Inglewood Unified was projected to run out of money in two months.

Inglewood's school board has said that their financial woes can be traced to two separate factors: funding deferrals by Sacramento in the wake of the state budget crisis and sharply falling student enrollment.

The district lost 1,000 students last year.

Melvin Iizuka with the L.A. County Office of Education said a $17 million loan approved last week will keep employee paychecks coming. 

"At this point we certainly think that they should have sufficient cash to end this fiscal year," said Iizuka, before adding that "as for next year, we’ll have to see the data they provide to us."

Inglewood Unified and other districts must submit budget updates on March 15.

While the loan keeps the district afloat, it comes at a price. To qualify, the district must approve $7 million in cuts to its campus and department budgets this school year.

Inglewood Unified's financial distress has earned it a negative status from California's Department of Education, one of seven school districts in the state with such a designation and the only one in Southern California.

The status gives Iizuka's office veto power over financial decisions made by Inglewood Unified's school board.

Correction: An earlier version of this story stated that Inglewood Unified was the district closest to falling into bankruptcy, which was incorrect.