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CDE Reports Fewer Districts with Budget Problems

March 12, 2015

State Superintendent of Public Instruction Tom Torlakson announced on March 4 another sign of the improving fiscal health of California schools – the number of California school districts in financial jeopardy continues to drop and has returned to pre-recession levels.

The First Interim Status Report for Fiscal Year 2014-15 shows 43 local educational agencies (LEAs) have either a negative or qualified certification. This is down from 49 a year ago, and down substantially from the height of the Great Recession in 2011-12, when 188 LEAs were facing financial difficulties.

The California Department of Education prepares Interim Status Reports twice a year to provide a "snapshot" of the financial status of the state's 1,028 LEAs. The LEAs receive a certification of positive, qualified, or negative.

"Positive" means an LEA can pay its bills this year and the next two years. "Qualified" means an LEA may have trouble paying its bills this year or the next two years. The most serious classification, "negative," means an LEA will be unable to pay its bills this year or next year and its county office of education may intervene by assigning external consultants, requiring a district fiscal recovery plan, or disallowing certain expenditures.

Of the current 43 LEAs on the list, five are negative, down by three from a year ago. The remaining 38 LEAs are qualified, down three from a year ago.

The classifications come from the LEAs' certified budgets last December, which cover the period ending last October. As a result of the time lag, some LEAs may have already cut their budgets to lift them out of negative or qualified status.

Source:  California Department of Education