|
For Immediate Release
April 20, 2005
State Board of Education to review 2005 School District
Financial Profiles
Finance Committee prior to Board
action
Springfield, Ill. –The Finance Committee of the
Illinois State Board of Education (ISBE) will review the
2005 School District Financial Profiles at its meeting
today. Approval of the profiles is anticipated at the
State Board of Education meeting tomorrow, April 21, 2005.
The School District Financial Profile was designed to
better illustrate information on school district finances
and to establish financial designation lists for all school
districts. Each district in the state receives a designation
in one of the following four categories: Financial Recognition;
Financial Review; Financial Early Warning; and Financial
Watch. The FY 2004 Profiles show improvement statewide
over the previous year, with:
- 50.6 percent of districts in Financial Recognition,
compared to 39.8 percent in FY 2003;
- 28.0 percent of districts in Financial Review, compared
to 27.0 percent in FY 2003;
- 12.6 percent of districts in Financial Early Warning,
compared to 15.7 percent in FY 2003; and
- 8.8 percent of districts in Financial Watch, compared
to 17.5 percent in FY 2003.
Three .pdf files are attached to this release:
In accordance with Section 1A-8 of the Illinois School
Code, ISBE is required to monitor and certify districts
in financial difficulty, based on a review of financial
data from each district. Two systems are utilized, the
School District Financial Profile and the system of Certifying
School Districts in Financial Difficulty.
- The School District Financial Profile identifies
school districts moving toward financial difficulty.
The system of determining profiles was developed with
school superintendents, school business administrators,
financial advisors, bond brokers and educational constituent
groups throughout the state. Trend analysis data is
incorporated in determine the profile score. There are
five indicators used:
- Fund Balance to Revenue Ratio - Reflects the overall
financial strength of the district
- Calculated by dividing the total of the ending
fund balance of the four operational funds (Educational,
Operations and Maintenance, Transportation,
Working Cash) plus the IMRF/FICA fund (if negative)
by the revenue received for the same funds
- Represents the percent of equivalent revenue
a district is saving each year
- Weighted 35 percent of the overall score
- Expenditure to Revenue Ratio – Identifies
how much a district expends for each dollar received
- Computed by dividing the total expenditures
for the four operational funds by the receipts
of the same funds
- Reflects whether a district is realizing an
operational surplus or is deficit spending
- Identifies if a district’s checking account
has a positive or negative balance
- Is weighted 35 percent of the overall score
- Days Cash on Hand – Provides an estimate
of the number of days a district could operate if
additional revenues were not received.
- Computed by dividing the total operational
expenditures by 360 days to obtain an average
expenditure per day
- Total cash and investments for the four operational
funds are divided by the average expenditure
per day to determine the number of days cash
on hand
- Weighted ten percent of the overall score
- Percent of Short-Term Borrowing Ability Remaining
– Reflects the percentage of short-term debt
margin a district has remaining for tax anticipation
warrants (TAWs) should the need arise
- Computed by dividing the total outstanding
TAWs by the product of 85 percent of the Equalized
Assessed Valuation (EAV) multiplied by the operational
funds tax rates
- Weighted ten percent of the overall score
- Percent of Long-Term Borrowing Ability Remaining
– Reflects the percentage of long-term debt
margin a district has remaining for major expenditures
like buildings and equipment
- Computed by multiplying the district’s
EAV by its maximum general obligation debt limitation
minus outstanding long-term debt
- Weighted ten percent of the overall score
Each indicator’s calculation is given a score of
4, 3, 2, or 1 which is weighted at the identified percentage.
The indicator scores are totaled for an overall composite
score. The composite score is categorized into School
District Financial Profile designations:
- 4.00 – 3.54 – Financial Recognition
- 3.53 – 3.08 – Financial Review
- 3.07 – 2.62 – Financial Early Warning
- 2.61 – 1.00 – Financial Watch
|
