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State Emergency Loans

Information on emergency loans made to school districts.

If a school district governing board determines during a fiscal year that it has insufficient funds to meet its current obligations, it may request an emergency apportionment loan. Statute specifies legislative intent that emergency apportionment loans are to be provided only through a legislative appropriation.

General statutory conditions for acceptance of a loan that exceeds 200 percent of the amount of the district's recommended reserve include:

  • The State Superintendent of Public Instruction (SSPI) shall assume all the legal rights, duties, and powers of the governing board of the district.

  • The SSPI shall appoint an administrator to act on behalf of the SSPI.

  • The school district governing board shall be advisory only and report to the state administrator.

  • The authority of the SSPI and state administrator shall continue until certain conditions are met. At that time, the SSPI shall appoint a trustee to replace the administrator. Trustee authority is addressed below.

General statutory conditions for acceptance of a loan that equals or is less than 200 percent of the amount of the district's recommended reserve include:

  • The SSPI shall appoint a trustee to monitor and review the operation of the district.

  • The school district governing board shall retain governing authority but the trustee shall have the authority to stay and rescind any action of the local district governing board that, in the judgment of the trustee, may affect the financial condition of the district.

  • The authority of the SSPI and the state-appointed trustee shall continue until the loan has been repaid, the district has adequate fiscal systems and controls in place, and the SSPI has determined that the district's future compliance with the fiscal plan approved for the district is probable.

List of State Emergency Loan Recipients

Questions:   Management Assistance Unit | 916-327-0538
Last Reviewed: Tuesday, August 2, 2016
Recently Posted in Fiscal Oversight