Money woes are bad enough at City College of San Francisco that, for the second time in eight years, outside evaluators are expressing uncertainty about whether the vital institution can stay in business.

On Thursday, the trustees will hear from an auditor whose financial study of the college raises “substantial doubt about its ability to continue as a going concern.”

The study, requested by City College, found that the school spent nearly $14 million more than it took in as of June 30, the end of the last fiscal year. The result was a 58% drop in the unrestricted general fund — a plunge so steep that the school’s financial condition has been declared a “material weakness,” indicating serious problems. The college has been deficit spending for at least three years.

Lest the auditor’s language make it appear that City College officials believe it will close, they don’t.

“Not to my knowledge, no,” said Evette Davis, a City College spokeswoman. “This audit is being treated as a validation of the hard decisions the college needs to make.”

The audit found, for the first time, that reserve funds have fallen below the 5% required by the state chancellor’s office and by the commission that threatened to revoke City College’s accreditation in 2012 and shut down the school. Although City College emerged from its accreditation crisis in 2017, officials haven’t fixed all the problems that brought the school to the brink of bankruptcy and closure eight years ago. Some of those same problems appear to be threatening its future again.

“This year’s ‘going concern’ finding is a specific warning that the (college) district is both out of money and out of time to enact the budget stabilization plan recommended by the auditor,” City College Chancellor Mark Rocha wrote the trustees in a letter he plans to give them on Thursday.

The audit by Brandon Harrison, who specializes in education audits for the accounting firm Eide Bailly and has been under contract for five years, identified four major reasons for the current financial crisis:

• Heavy deficit spending that began in 2016-17. Although the trustees adopted a balanced budget this year, the audit found that that budget rests on the assumption that City College will reduce faculty and staff salaries by 16.4% in one year.

“A personnel reduction of this size will be difficult to accomplish within one year,” Harrison wrote. “Although employee costs can be reduced, this process takes time and the (college) district has shown difficulty in effectively managing its payroll and benefit costs.”

• The recent loss of state stability funding. For three years, from 2014 to 2017, the money “artificially inflated” City College’s funding levels as the school fought to stay accredited. The state provided $39 million a year, on average. The college also lost state funding as enrollment has steadily fallen during the last decade.

All of that, “combined with (the) increasing cost of payroll and benefits,” created a structural deficit, Harrison wrote.

• City College is one school, but it maintains 10 costly locations. Two serve no students, while others serve less than the equivalent of 200 full-time students. The audit did not identify which locations these were, and Davis, the spokeswoman, did not immediately know the answer.

“These centers are incurring administrative, operating and maintenance costs with little to no ongoing revenue generation,” Harrison wrote.

• College officials assumed a higher enrollment than materialized last year. Nevertheless, the school spent money based on the incorrect assumption. The college enrolls about 64,000 full- and part-time students.

Harrison notes in his report that although City College “does not meet minimum fund balance requirements,” and there is “substantial doubt about its ability to continue as a going concern,” his report makes recommendations based on the idea that the college will stay open.

To ensure fiscal solvency, the auditor recommends that City College “develop a more aggressive fiscal management and budget stabilization plan.”

The audit does not mention the popular “Free City” program that allows San Francisco residents to study for free at City College because it is a city-funded program and not a drain on college finances.

The audit includes a response from Rocha, the chancellor, and his management team, who provide a proposal for correcting the problems.

The proposal begins with an emphasis on the “student-centered restructuring” of academics Rocha began in 2018.

The massive overhaul — which is in line with cost-cutting state goals for community colleges — aims at doubling down on core college achievements: graduating more students, helping them transfer to university, completing vocational certificates and acquiring basic skills such as learning to speak English.

At the same time, Rocha has been eliminating community-oriented, non-credit classes and even shedding for-credit classes by the hundreds if they don’t, in general, support the school’s new focus. The chancellor has cut 634 classes since 2017, including 345 for the current semester alone.

He also wants to reduce the number of faculty who don’t teach but who are paid to do administrative tasks, develop a real estate plan to capitalize on valuable college-owned property and work on passing a bond measure known as Proposition A on San Francisco’s March ballot to help with the school’s construction needs.

In his letter to the trustees, Rocha also lashed out at faculty and students who have protested the hundreds of classes he’s cut, and the manner in which he has done it — slashing classes with no warning to instructors assigned to teach them.

“Every proposal and decision to reduce costs has met with fierce resistance, as if the board has options or other funding at its disposal,” Rocha wrote.

The chancellor did not mention a key action he took in August, which prompted one of the largest campus protests of the year. He drew up a new compensation plan for executives, doubling the salary of several, and adding it to the appendix of the 105-page budget for 2019-20 that the trustees approved the next day.

The salaries had to be withdrawn, and weeks later, the trustees instead approved a 10% raise for most administrators.

The plan, however, was to hire a consultant to determine whether the college could afford to give out bigger executive raises, after all.

Nanette Asimov is a San Francisco Chronicle staff writer. Email: nasimov@sfchronicle.com Twitter: @NanetteAsimov