An annual state audit has found 19 Colorado school districts had one or more financial warning indicators, down from 26 a year ago.
The Fiscal Health Analysis of Colorado School Districts reported, “In spite of significant funding cuts, districts have planned for reductions in revenue and have simultaneously reduced the number of warning indicators again this year.
“However, as budget cuts continue at the state level, districts will continue to experience increased financial stress. It is likely there will be increases in warning indicators in future years.”
Education Commissioner Robert Hammond agreed that next year’s audit might find more problems.
“Quite frankly, we were a little surprised it was as good as it was,” he told the Legislative Audit Committee, which released the report Monday afternoon.
The report, done by the Office of the State Auditor, reviews district finances based on five financial indicators, including such things as health of the general fund and reserves. Districts were reviewed for the three-year period ending June 30, 2011.
In the latest audit, 13 districts had one warning indicator and six had two. The 2011 audit, which examined the three years ending June 30, 2010, listed 20 with one warning indicator, five with two and only one – Hoehne, a rural district east of Trinidad – with three indicators.
There were 49 districts with one or more indicators for the three years ending June 30, 2009, and 43 for the previous three-year time frame.
The latest audit noted that the most common reasons for the indicators were deliberate spending down of fund balances and spending on construction projects.
Here are the six districts with two indicators:
- Hoehne – The district now is down to two indicators from three. It’s been affected by uncollected property taxes.
- Jefferson County – The district noted deliberate spending down of reserves to cushion the impact of budget cuts.
- La Veta – The district spent down reserves and had capital expenses.
- Mountain Valley – The district spent reserves to compensate for state cuts.
- North Park – The district cited spending for construction projects.
- Trinidad – The district cited overstaffing, general fund transfers to the food service fund and declining enrollment.
The Department of Education also monitors district financial performance annually and can place troubled districts on financial watch. No districts currently have financial concerns serious enough to require that designation. Hoehne did request and receive a state loan to cover cash flow in 2011-12.