Education Finance
Financial Risk Assessments and Rankings
In light of the gravity of fiscal issues facing school districts, along with the fact that several districts are maintaining and/or anticipating negative fund balances, in the fall of 2004, the State Board of Elementary and Secondary Education (SBESE) requested that the Department develop a financial assessment tool for use as an indicator of financial risk.
Over the last several months, this assessment tool has been developed and refined. In April 2004, the SBESE approved the final version of the FY 04-05 assessment. In this year, there are nineteen factors with eighteen factors falling in two major categories: 1) fiscal management; and 2) auditing, internal controls, and compliance. The final factor identifies new districts or districts that have been issued a "going concern” opinion by its independent auditor.
Once the template for the risk assessment is populated with data, points are assigned to each factor and districts are sorted with those districts scoring the highest number of points considered most at risk financially.
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