Not that I’m surprised, but today the state released its list of school districts in financial distress and the Sacramento Bee reports that the number is higher than ever before.
School districts file a projected budget with the state by June 30 of every year, covering the fiscal year running from July 1 to the following June 30. Then, they file “interim reports” as the year progresses, so that the state can monitor whether they are staying on track financially. A district can be given positive, negative or “qualified” certification by the state based on the financial statements it files with any of its budget reports.
Positive certification means your budget for the current year is balanced, and your projections for the two years following the current year show positive cash flow and the required amount of cash in reserve (two percent in the case of SFUSD). If the state thinks you may not meet your financial obligations in the current or future years, you are given qualified certification; if the state believes you will not meet your financial obligations in the current year or future years, you are given negative certification. According to the Bee:
In 2006-07, there were three districts on the negative list and 19 on the qualified list. Today, there are 12 districts on the negative certification list and 114 districts with a qualified certification status. The latter includes several of the state’s large districts, including the largest, Los Angeles Unifed.