School District Financial Risk Analysis


As of December 31, 2022, 3 Arizona school districts are at higher financial risk than other Arizona school districts based on our analysis of 10 financial risk measures, decreasing from 6 districts in December 2021. Our analysis focused on identifying the districts at the highest risk based both on their current and potential future financial difficulties. Collectively, the measures relate to a district’s overall financial risk of not being able to operate within its available cash resources and budget constraints. Four of last year’s highest-risk districts improved enough to be removed from the current list of highest-risk districts, generally by improving their budgetary reserves or financial position. Like nearly all Arizona districts, these previously high-risk districts reported using COVID-19 federal relief monies to maintain operations through June 30, 2022, contributing to improved budgetary reserves and financial positions in this year’s analysis. In accordance with laws 2021, Ch. 408, we published an interactive dashboard that compiled and reported school district spending and planned spending related to stimulus monies specified in the federal acts related to the COVID-19 pandemic through June 30, 2022. School districts reported spending $1.8 billion of $3.8 billion allocated COVID-19 federal relief grant monies through June 30, 2022.

Current highest-risk districts and their locations

The downloadable summary contains the list of High-Risk measures for each of the highest-risk districts.

How to determine if your district is at financial risk and create a financial risk action plan

For our school district financial risk analysis, we analyze the most current data available for 10 financial risk measures in the 7 categories listed below to identify the Arizona districts with the highest financial risk. Clicking on the category names below will bring you to the applicable measure page where you can learn more about each measure, including how it contributes to a district’s financial risk, how it is calculated, and how we identify districts at high risk for the measure.

Also included below is a financial risk action plan template that we developed based on meetings with Arizona’s current and past highest-risk districts as a tool any district can use to plan and take action to reduce its financial risks. District decision-makers can use the information provided in our analysis and action plan template to better understand district financial risks when evaluating district budget- and finance-related decisions.


Is the district operating under a State Board of Education (SBE) appointed receiver as of December 9, 2022?

Change in weighted student count

Is the number of students attending the district, used to calculate base funding, declining substantially and causing decreases in revenues?

Budget limit reserves

Is the district substantially diminishing its Maintenance and Operation and Unrestricted Capital Outlay Funds’ budget limit reserves or has the district exceeded its legal budget limits in the most recently completed fiscal year?

Financial position

Is the district currently spending more in its general operating fund than it is receiving to operate, causing substantial declines in operating reserves? Or has the district’s spending in recent years lead to negative balances in its general operating fund?

Capital monies redirected to operations

Is the district redirecting a substantial portion of its intended capital funding to current operational spending leaving lower than average resources for capital needs?

Small school budget limit adjustment

Has the district recently lost the ability to increase its budget limit with a small school adjustment or is the district’s small school adjustment at least 10 percent unfunded?

Frozen tax rates

Has the district’s property tax rate been frozen by the property tax oversight commission based on the constitutional limit for residential property taxpayers?

Financial risk action plan template for school districts

This template provides a step-by-step process district management can use to identify the district’s financial risks and develop, implement, and monitor mitigating actions to address its financial risks.

Auditor General’s school district financial analysis process

Our school district financial risk analysis is a year-round process as shown in the graphic below.

Full data set available for download

In addition to this analysis, we have issued this data file in Microsoft Excel format, which contains the December 2022 data, analysis results, and other information presented on the State and district results pages, including identifying the December 2022 highest-risk districts. The file also identifies the December 2021 highest-risk districts.