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Denair Unified remains in fiscal peril
Schools across state report improved finances
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While the number of California school districts in financial jeopardy has diminished by two-thirds in the past year, Denair Unified School District remains on the list of negatively certified districts that are projected to not be able to meet their financial obligations for the 2014-2015 school year.

DUSD is among seven Local Educational Agencies — or school districts, county offices of education, and joint power agencies — of the state’s 1,038 that are negatively certified. The others are Orland Joint Unified, Acton-Aqua Dulce Unified, Inglewood Unified, San Ardo Union Elementary, San Ysidro Elementary, and Windsor Unified. While Denair is struggling toward fiscal recovery after an almost two year period that placed the District facing a potential state takeover, the number of districts making positive growth in the state is increasing overall according to the Second Interim Report by the California Department of Education that was released earlier this month.

The Report identifies districts that have negative certification as well as those with qualified certification — a less serious recognition that designates LEAs that may not meet their financial obligations for the current or two following fiscal years. Qualified certification allows an LEA’s county office of education to intervene to administer funds, which DUSD experienced when the Stanislaus County Office of Education lent the District $1.3 million for the 2012-2013 school year as well as a $1.1 million loan for the 2013-2014 school year. According to DUSD Chief Business Officer Linda Covello, the loans were necessary as cash deferrals across the state of California as well as General Fund deficit spending created a negative cash balance. No additional loans are anticipated for the 2014-2015 or subsequent school years, said Covello. 

The overall fiscal health of California school districts is on an uptick as the number of LEAs that have exited the fiscal red zone of negative or qualified certification has decreased from 92 according to the 2012-2013 second interim report to 30 for the 2013-2014 interim report. This year alone has also seen a significant decrease from 49 LEAs in March’s First Interim Report to 30 this month.  

“A combination of factors over the past few years has given schools the tools they need to take control of their own future again,” said Tom Torlakson, state superintendent of public instruction in a press release. “Although we won’t be finished until every school is on stable ground, this is welcome news that school funding is moving in the right direction.”

School districts across the state are facing completion of their transition year for the new state funding method, Local Control Funding Formula, which places more spending control in the hands of the districts. Districts’ LCFF spending is developed in conjunction with the Local Control Accountability Plan which is one component of the state mandated LCFF which requires school districts to prepare a plan detailing ways in which it will meet the needs of students as well as state and local priorities.