More Illinois school districts balancing budget in tough economic times

                                                                                                                                                                                                                                                                                                                          ISBusing ISBE using revised data to avoid penalizing districts for late payments from the state                                                                                                                                                 

 Springfield, IL — The Illinois State Board of Education (ISBE) released its annual financial profile of the state’s public schools using revised Fiscal Year 2010 data that takes into account that the state is behind in payments to school districts. The 2011 financial profile scores show that the number of districts in Financial Recognition increased from last year’s 550 to this year’s 571, or nearly 66 percent of all districts are doing a sound job of managing their finances during this current fiscal crisis. Using the revised data, the percentage of districts in Financial Recognition is nearly 70 percent.

“Local school boards are grappling with decreased revenue and late payments from the state,” said State Superintendent of Education Christopher A. Koch. “Many districts have had to make very difficult and painful decisions during the past several years in order to try and balance budgets. While we expect continued lean economic times, the Board is advocating for increased education funding for the next fiscal year. Even in times of great financial stress, we must continue to invest in education for our students and our state’s future.”

The Financial Profile is based on data from Fiscal Year 2010, which ended June 30, 2010. The State Board of Education is required to calculate each district’s finances to add late payments, thus removing any impact of late payments for mandated categoricals such as pupil transportation, special education and other expenditures due to the state and national recession. The school code was amended, effective August 2009, to specifically ensure that districts are not designated as being in financial difficulty solely due to delayed state payments.

The Financial Profile is a “point in time” picture and it is likely that the financial condition of many districts has changed in the nearly nine months since the end of the prior fiscal year. During any given time over the past two years, the state of Illinois has a backlog of bills owed to schools totaling more than $1 billion and currently owes $4.6 billion to vendors.

Given the uncertainty of state funding, many school districts have announced layoffs in recent weeks to meet statutory deadlines and better position themselves for financial stability.

ISBE developed the Financial Profile in 2003 to help monitor the finances of school districts and identify which ones are in or moving toward financial difficulty. The 2011 Financial Profile data provided to ISBE showed a 2.5 percent increase in the number of districts that achieved Financial Recognition, going from 63.3 percent of districts last year to 65.8 percent this year. The 2011 Financial Watch list – those districts facing the most severe financial problems – decreased to 32 or 3.7 percent from 39 districts or 4.5 percent last year.

For the 2011 Financial Profile of 868 districts, there are:

*604 Financial Recognition school districts, based on FY10 revised data, up from 449 in 2005 and up from 578 with revised data in 2010.

  • 188 Financial Review school districts, down from 249 in 2005 and down from 196 with revised data in 2010.
  • 52 Financial Early Warning school districts, down from 111 in 2005 and down from 66 with revised data in 2010.
  • 24 Financial Watch school districts, down from 79 districts in 2005 and down from 29 with revised data in 2010.
  • Results of the Financial Profile:

 

 

FY 10 Financial Profile Based on FY 09 Revised Data

FY 11 Financial Profile Based on FY 10 Data

FY 11 Financial Profile Based on FY 10 Revised Data

#

%

#

%

#

%

Financial Recognition

578

66.5%

571

65.8%

604

69.6%

Financial Review

 

196

22.6%

203

23.4%

188

21.6%

Financial Early Warning

66

7.6%

62

7.1%

52

6%

Financial Watch

29

3.3%

32

3.7%

24

2.8%

Total

869

100%

868

100%

868

100%

The list is created by using five indicators of financial performance:

 

  • Fund Balance to Revenue Ratio
  • Expenditures to Revenues Ratio
  • Days Cash on Hand
  • Percent of short-term borrowing available
  • Percent of long-term debt remaining

The School District Financial Profile was reviewed by the Illinois State Board of Education during its regularly scheduled meeting today.

The 2011 Financial Profile for all districts in Illinois can be found online at

http://www.isbe.net/sfms/P/profile.htm