School districts cutting staffs and borrowing to balance budgets as economic woes continue

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


SPRINGFIELD, IL — The Illinois State Board of Education (ISBE) released its annual financial profile of the state’s public schools using revised Fiscal Year 2011 data that takes into account the state remains behind in payments for the third consecutive year to school districts. The 2012 financial profile scores show that the number of districts in Financial Recognition increased from last year’s 604 to this year’s 670 or 77.3 percent of 867 districts. While more districts have improved their financial standing, ISBE’s data also shows that school administrators continue to reduce their expenditures and increase borrowing to balance budgets.

“Local school boards and administrators continue to make difficult choices as they grapple with decreased local and state revenue as well as late payments from the state,” said Board Chairman Gery J. Chico. “They have been forced to cut staff, forgo supplies, delay facility repairs and outsource operations in order to cut costs.”

The Financial Profile is a snapshot in time that helps ISBE gauge school districts’ financial condition. Once approved, ISBE staff can use the Financial Profile tool, along with other data and information, to assess an individual district’s financial status.  

The list of districts categorized in Financial Recognition, Financial Review, Financial Early Warning and Financial Watch is based on each district’s Annual Financial Report from Fiscal Year 2011, which ended June 30. The rating 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 State Board of Education is required by law to calculate each district’s finances and to incorporate 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 condition of many districts has changed in the nearly nine months since the end of the prior fiscal year and may not be reflective of a district’s finances today. But the sluggish economy has meant that at any given time over the past three years, the state of Illinois has a backlog of bills owed to schools, sometimes totaling more than $1 billion. As of this week, the state owed more than $4.4 billion in overdue payments, including $729 million in education-related bills.

“Districts have increased cash balances by issuing debt or restructuring debt payments,” State Superintendent of Education Christopher A. Koch. “While we expect continued lean economic times, our Board is advocating a modest increase (3.9 percent) for the state’s K-12 education budget to fund daily operations and important ongoing reforms.”

This is the 10th year that the Financial Profile has been used to help districts and the state review district finances. From 2004 to 2009, the number of districts in Financial Recognition Status increased each year. That number decreased in 2010 but increased in 2011 and again this year. There is a slight decrease in the number of districts in the lowest category, Financial Watch, going from 24 districts last year to 17 districts in the FY12 Financial Profile Scores. Fifteen districts got off the list; fourteen reflected improvement and one district reorganized into another district.

There are eight new districts in Financial Watch this year but three are listed because they did not submit an Annual Financial Report. In total, four districts – Ashton-Franklin Center Community Unit School District 275, Bellwood School District 88, Maywood-Melrose Park-Broadview 89 and Thornton Township High School District 205 -  did not submit an Annual Financial Report. The ISBE continues to work with these districts in order to receive a report.

For the 2012 Financial Profile of 867 districts, there are:


         *670 Financial Recognition school districts, based on FY11 revised data, up from 513 in FY 2007 and up from 606 with revised data in 2011.

  • 143 Financial Review school districts, down from 193 in 2007 and down from 188 with revised data in 2011.
  • 37 Financial Early Warning school districts, down from 115 in 2007 and down from 52 with revised data in 2011.
  • 17 Financial Watch school districts, down from 53 districts in 2007 and down from 24 with revised data in 2011. 

Results of the Financial Profile:



FY 11 Financial Profile

Based on FY 10 Revised Data

FY 12 Financial Profile

Based on FY 11 Revised Data





Financial Recognition





Financial Review





Financial Early Warning





Financial Watch










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

 The 2012 Financial Profile for all districts in Illinois can be found online at:

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