For Immediate Release
March 20, 2008
Illinois school districts showing improved financial health; Nearly 70% receive top financial recognition
Governor Blagojevich and State Board’s commitment to improved funding for schools paying off; $5.9 billion increase in school funding
Springfield, Ill. — The Illinois State Board of Education’s (ISBE) annual financial profile of the state’s public schools shows a growing number of schools making financial improvements. Through Governor Blagojevich’s commitment to increased education funding ISBE’s advocacy on the behalf of schools, nearly 70 percent of the states’ districts are in the highest category, receiving financial recognition, while only 3 percent are on the financial watch list. Also, for the fifth straight year, the number of districts spending more than they take in dropped – from 76.8 percent in 2004 to 23 percent in 2008. In that same timeframe Governor Blagojevich and the State Board have worked with lawmakers to provide an additional $5.9 billion for Illinois schools.
“There are no easy decisions when it comes to school funding, but this clearly shows that local boards are being good stewards with the resources the Governor and lawmakers have been able to provide them,” said State Superintendent of Education Christopher A. Koch. “It’s very promising to see districts making these financial improvements.”
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. The Financial Profile is based on the State Board’s analysis of school districts’ June 30, 2007 Annual Financial Reports.
Each district in the state receives a designation in one of the following four categories (highest to lowest): Financial Recognition; Financial Review; Financial Early Warning; and Financial Watch.
- 602 Financial Recognition school districts, up from 356 in 2004 and 513 in 2007
- 182 Financial Review school districts, compared to 193 in 2007
- 59 Financial Early Warning school districts, compared to 115 in 2007
- 30 Financial Watch school districts, down from 53 in 2007
In addition to making gains over the FY07 Financial Profile (based on FY06 data), Illinois districts have made significant improvements since the 2004 Financial Profile (based on FY03 data).
- 69% in 2008 get financial recognition, up from 40% in 2004
- 21% are in financial review, compared to 27% in 2004
- 7% are in financial early warning compared to 16% in 2004
- 3% are in financial watch compared to 17% in 2004
The Financial Profile designation is just one piece of information that school districts and communities should use to judge the financial management and condition of their school district.
The list 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 now has another tool to monitor school district finances – the school district’s budget. Beginning in FY 2007, school districts must now submit their annual budgets for the next fiscal year to ISBE. This is a result of PA 94-0234 – legislation initiative proposed by the State Board. If a district does not have a balanced budget, it must also submit a deficit reduction plan.
The school District Financial Profile was reviewed by the Illinois State Board of Education during its regularly scheduled meeting today.
The 2008 Financial Profile can be found online at http://www.isbe.net/sfms/P/profile.htm.