May 28, 2013
State Schools Chief Tom Torlakson Reports Sharp
Drop in Number of Districts in Financial Jeopardy
SACRAMENTO—A new report shows that less than half as many California school districts are in financial jeopardy now as a year ago, State Superintendent of Public Instruction Tom Torlakson announced today.
The state's Second Interim Status Report for 2012-13 shows that 92 local educational agencies (LEAs) are either in negative or qualified financial status. The same report from a year ago showed a record 188 LEAs in financial jeopardy.
"When the number of districts struggling financially is cut in half, we know we are making tremendous progress—especially after years of tough budget cuts," Torlakson said. "But the 92 districts that still face financial jeopardy represent some 1.7 million students, and we must continue our work to get them on solid fiscal ground. Thankfully, voter approval of Proposition 30—and the budget proposal that reflects it—keeps us firmly on that path."
Eight LEAs received negative certifications; 84 received qualified certifications. This is down from 124 LEAs in the First Interim Status Report for 2012-13, issued in March, and from the 188 LEAs in the Second Interim Report for 2011-12, issued a year ago.
Twice a year, the California Department of Education receives Notice of Interim Certifications on the financial status of the state's 1,037 LEAs, which include school districts, county offices of education, and joint powers agencies. The certifications are classified as positive, qualified, or negative.
A positive certification is assigned when an LEA will meet its financial obligations for the current and two subsequent fiscal years. A qualified certification is assigned when an LEA may not meet its financial obligations for the current or two subsequent fiscal years. This certification allows the LEA's county office of education to provide assistance to the district.
A negative certification—the most serious of the classifications—is assigned when an LEA will be unable to meet its financial obligations for the remainder of the current year or for the subsequent fiscal year. This certification means the LEA's county office of education may intervene in the district's finances.
The assistance or intervention by the county office may include assigning external consultants, requiring a district fiscal recovery plan, or disallowing certain district expenditures.
This new list is a compilation of the certifications by LEAs that were due April 16, 2013, and cover the financial and budgetary status of the districts for the period ending January 31, 2013. The certifications reflect whether the LEAs are able to meet their financial obligations for the remainder of the current fiscal year and subsequent two fiscal years, based on projections at that point in time.
These certifications predate the Governor's May Revision to the proposed 2013-14 state budget. Because these Interim Status Reports are snapshots in time, the LEAs' financial status may have changed since these certifications were collected.