School district financial risk analysisDecember 2020

Summary results

As of December 2020, 13 Arizona school districts are at higher financial risk than other Arizona school districts based on our analysis of 10 financial risk measures. 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.

Current highest-risk districts

  • Antelope UHSD
    Antelope UHSD high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • General Fund operating reserve ratio
    • Operating budget limit reserve
  • Apache Junction USD
    Apache Junction USD high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • Operating budget limit reserve
  • Cedar USD
    Cedar USD high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • Receivership
  • Cottonwood-Oak Creek ESD*
    Cottonwood-Oak Creek ESD* high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • Operating budget limit reserve
  • Double Adobe ESD
    Double Adobe ESD high risk measures
    • Change in weighted student count
    • Frozen tax rate
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • General Fund operating reserve ratio
    • Operating budget limit reserve
    • Small school budget limit adjustment
  • Elfrida ESD
    Elfrida ESD high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • Frozen tax rate
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • General Fund operating reserve ratio
    • Operating budget limit reserve
  • Isaac ESD
    Isaac ESD high risk measures
    • Capital budget limit reserve
    • Change in weighted student count
    • Frozen tax rate
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • General Fund operating reserve ratio
    • Operating budget limit reserve
  • Mammoth-San Manuel USD
    Mammoth-San Manuel USD high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • Frozen tax rate
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • Operating budget limit reserve
  • Murphy ESD
    Murphy ESD high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • General Fund operating reserve ratio
    • Receivership
  • Pearce ESD*
    Pearce ESD* high risk measures
    • Change in weighted student count
    • Frozen tax rate
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • General Fund operating reserve ratio
    • Operating budget limit reserve
    • Small school budget limit adjustment
  • Safford USD*
    Safford USD* high risk measures
    • Capital budget limit reserve
    • Capital monies redirected to operations
    • Change in weighted student count
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • General Fund operating reserve ratio
    • Operating budget limit reserve
  • Stanfield ESD
    Stanfield ESD high risk measures
    • Capital budget limit reserve
    • Change in weighted student count
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • General Fund operating reserve ratio
  • Tucson USD
    Tucson USD high risk measures
    • Capital budget limit reserve
    • Change in weighted student count
    • Frozen tax rate
    • General Fund change in fund balance
    • General Fund operating margin ratio
    • Operating budget limit reserve

*District added to list in November 2020.

How to determine if your district is at financial risk

Our analysis looks at measures in these categories:

Is the district operating under a State Board of Education (SBE) appointed receiver as of December 1, 2020?

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

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?

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?

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

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?

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

Where are the highest-risk districts located?

School district financial risk analysis process