State Supt. Chris Reykdal shared the information below with PSE and other labor partners. I thought our membership would find this helpful so I’m sharing with you all:
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Recently, the K–12 system has become more familiar with the binding conditions process. The law requires binding conditions when a school district is unable to produce a balanced budget for the upcoming school year, a balanced budget extension for the current school year, or a financial statement for the prior school year.
Currently, a total of seven districts are on formal OSPI financial oversight:
· 5 districts on binding conditions (Mt. Baker, Tukwila, Yelm, Shelton, and Mabton);
· 1 district on Financial Oversight (Prescott); and
· 1 district on Enhanced Financial Oversight (Marysville).
Since the beginning of the 2023–24 school year, we have had one district (La Conner) enter and exit the binding conditions process through evidence of improved financial performance.
OSPI is already engaging with several districts not currently on binding conditions but have the potential to be placed there by the end of this budget cycle (August 2025). Two to three more districts may enter into binding conditions this summer, bringing the total above seven.
OSPI has a formal Financial Health Indicators Model as required in statute that is updated in the spring of each year and posted to our website.
In addition to the measures within the tool mentioned above, OSPI is finding there are additional local budgeting activities that can identify districts in financial trouble. Our experience has shown that if a district uses one of these fiscal strategies occasionally, it should not be cause for concern. Given the information provided by districts on binding conditions, school districts are cautioned from using two or more of these at the same time or in succession to meet expenditure demand.
· Repeated reliance on interfund loans to meet General Fund cash needs;
· Apportionment advances;
· Declining enrollment; and
· Multiple months of reliance on interest bearing warrants from the county to meet monthly expenses.