Report confirms highest ever number of school districts in financial jeopardy

A record number of California school districts are at risk of not being able to pay their bills the next several years, a state report released Monday confirmed.

As reported May 9 by Cabinet Report (, the California Department of Education's Second Interim Status Report for 2011-12 shows that of the 967 districts required to file semiannual reports on their financial status, an all-time high 188 local educational agencies are either in negative or qualified financial status.

That's up 61 LEAs from the first interim report issued in February, and an increase of 45 from the second report for 2010-11 issued a year ago.

This is the kind of record no one wants to set," Superintendent of Public Instruction Tom Torlakson said in a statement. "Across California, parents, teachers and administrators are increasingly wondering how to keep their schools' lights on, their bills paid and their doors open."

The report comes as the state continues to struggle financially. This year, California faces a nearly $17 billion budget deficit, and school districts, already feeling the sting of several years' worth of funding reductions, also could be hit with additional mid-year cuts totaling $5.5 billion if voters reject a November tax initiative designed to restore some of their lost funding.

Earlier this month in a report to a Legislative finance subcommittee, the Fiscal Crisis Management Assistance Team - the state's watchdog on school finance - revealed 181 districts were at risk of failing to meet their near-term financial obligations, but added the number was likely to be higher when the second interim report was released because budgets were still being reviewed.

The new report shows 12 LEAs received negative certifications and 176 received qualified certifications.

A qualified certification is assigned when a district may not meet its financial obligations for the current or two subsequent years. This certification allows the LEA's county office of education to provide assistance to the district.

Districts receiving a negative certification - the most dire of the classifications - will be unable to meet their financial obligations for the remainder of the current year or the next two, and means the district's county office of education may intervene in the district's finances and possibly take over administration duties.

All other LEAs received a positive certification, meaning they will meet their financial obligations for the current and two subsequent fiscal years.

The list of LEAs in financial jeopardy, found here, is based on data that was submitted April 16 and covers the financial and budgetary status of the districts for the period ending Jan. 31, 2012.

Students in these 188 LEAs represent some 2.6 million students - of California's total 6.2 million pupils- who are attending schools in districts with serious financial challenges, up from nearly two million students in February. more