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Source:FCMAT AB2756 Booklet

AB1200 Overview

FCMAT Predictors of School Districts Needing Intervention

The following 11 conditions represent those school agency problems most commonly encountered by the Fiscal Crisis and Management Assistance Team (FCMAT). The presence of any one condition is not necessarily an indication of a school agency in trouble. Unavoidable short-term situations such as key administrative vacancies can result in brief and acceptable periods of exposure to one or more of the following conditions. Exceeding acceptable limits of exposure in one or more of the following conditions is often the blueprint for districts nearing or presently in a crisis situation.

  1. Leadership Breakdown
    • Governance crisis
    • Ineffective staff recruitment
    • Board micromanagement and special interest groups influencing boards
    • Ineffective or no supervision
    • Litigation against district

  2. Ineffective Communication
    • Staff unrest and morale issues
    • Absence of communication to educational community
    • Lack of interagency cooperation
    • Breakdown of internal systems (payroll, position control)

  3. Collapse of Infrastructure
    • Unhealthful and unsafe facilities and sites
    • Deferred maintenance neglected
    • Low Budget Priority
    • Local and state citations ignored
    • No long-range plan for facility maintenance

  4. Inadequate Budget Development
    • Failure to recognize year-to-year trends
    • Flawed ADA projections
    • Failure to maintain reserves
    • Salary and benefits in unrealistic proportions
    • Insufficient consideration of long-term bargaining agreement effects
    • Flawed multi-year projections
    • Inaccurate revenue and expenditure estimations

  5. Limited Budget Monitoring
    • Failure to reconcile ledgers
    • Poor cash flow analysis and reconciliation
    • Inadequate business systems and controls
    • Inattention to Countu of Education data
    • Failure to review management control reports
    • Bargaining agreements beyond state COLA
    • Lawsuit settlements

  6. Poor Position Control
    • Identification of each position missing
    • Unauthorized hiring
    • Budget development process affected
    • No integration of position control with payroll

  7. Ineffective Management Information Systems
    • Limited access to timely personnel, payroll, and budget control data and reports
    • Inadequate attention to system life cycles
    • Inadequate communication systems

  8. Inattention to Categorical Programs
    • Escalating general fund encroachment
    • Lack of regular monitoring
    • Illegal expenditures
    • Failure to file claims

  9. Substantial Long-Term Debt Commitments
    • Increased costs of employee health benefits
    • Certificates of participation
    • Retiree health benefits for employees and spouse
    • Expiring parcel taxes dedicated to ongoing costs

  10. Human Resource Crisis
    • Shortage of staff (administrators, teachers, support, and board)
    • Teachers and support staff working out of assignment
    • Students/classrooms without teachers
    • Administrators coping with daily crisis intervention
    • Inadequate staff development

  11. Related Issues of Concern
    • Local and state audit exceptions
    • Disproportionate number of under performing schools
    • Staff, parent, and student exodus from the school district
    • Public support for public schools decreasing
    • Inadequate community participation and communication

Why AB1200 was created

AB1200 was created because of the need to ensure that local educational agencies throughout California adequately prepare to meet their financial obligations. The law was rooted in the concerns that arose following the bankruptcy of Richmond School District, and the fiscal collapse of a few other districts that were preparing to seek emergency loans from the state. Through the passage of AB1200, the legislature proclaimed that even in a time of tight revenues, the vast majority of California's 1,000-plus school districts have been able to maintain balanced budgets, and that local educational agencies should not expect to be bailed out by the state when they exhibit a pattern of unacceptable fiscal management. While only a handful of the state's school districts have reached this extreme stage of fiscal failure, the disturbing trend has shown an increasing number of school districts dipping into general fund reserves and spending more than they receive. The passage of AB1200 sent a strong message to local educational agencies to put and keep their finances in order.

What AB1200 Does

AB1200 is a statewide plan for county offices of education and school districts to work together on the local level to improve fiscal procedures, standards and accountability. AB1200 expands the role of county offices of education in monitoring school districts and mandates that they intervene, under certain circumstances, to ensure districts can meet their financial obligations. In crisis situations county offices can call upon the Fiscal Crisis and Management Assistance Team to help determine appropriate steps toward fiscal recovery. AB1200 provisions also apply to the state in its monitoring role over county offices of education. In short, no publicly-funded K-12 school operation has been left unaffected by this innovative effort to ensure fiscal solvency throughout the state's school system.

How AB1200 works

There are several defined "fiscal crises" that can prompt a county office of education to intervene in a district: a disapproved budget, a qualified or negative interim report (reporting requirements) or recent actions by a district that lead the county office to conclude that the district will not be able to meet its financial obligations. AB1200 spells out the procedures by which a county office monitors, assists, warns, or intervenes in the fiscal operation of a school district. A district can appeal a disapproved budget or a negative or qualified interim certification all the way up to the State Superintendent of Public Instruction. In any of these situations, a county office or even the state could ask for FCMAT's assistance and assessment.


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Last modified: March 11, 2005

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