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Joseph City Unified School District

—Among the highest-risk districts

District demographic information

General information
County	Navajo County
Operational peer group (FY 2024)	7
Legislative district(s)	6 and 7

School information	FY 2024	FY 2025
Students attending	418	396
Number of schools	2	2

Summary of risks identified

Joseph City Unified School District (District) is at high risk of not being able to operate within its available budget constraints and cash resources. As shown on the measure cards below, the District’s high-risk status is due to its change in weighted student count (WSC), operating and capital budget limit reserves, General Fund operating margin ratio, and General Fund change in fund balance.

The District’s WSC has consistently declined every year since 2022, with an overall 11.07% decline, including a 2.54% decline in FY 2026, to date, impacting its budget limits and student-count-generated revenues.

The District accumulated a peak operating budget limit reserve balance of $886,728 in FY 2022, but it steadily declined to $20,798 in FY 2025, which represents a single-year decrease of 83.50% and a 4-year decrease of 97.59%. Similarly, the District accumulated a peak capital budget limit reserve of $161,567 in FY 2022 and has been steadily spending the reserve since then. Specifically, the District decreased its reserve to only $22,857 in FY 2025, which represents a 75.93% decline since FY 2021 and 29.28% decline during FY 2025. With its steadily decreasing operating and capital budget limit reserves, the District is limiting the resources available to meet its current and future operating and capital needs.

While the District reduced General Fund spending from FYs 2024 to 2025, General Fund expenditures still exceeded available revenues (i.e., negative operating margin) in FYs 2024 and 2025, reducing the District’s General Fund balance 21.91% and 55.24%, respectively, leaving it with a General Fund reserve balance that would cover less than 1 month of expenditures going into FY 2026.

While the District has not yet exceeded its statutorily prescribed budget limits or cash resources, it must identify and implement appropriate risk-mitigation measures to prevent future overspending and cash deficits. See the District’s action plan below.

District action plan

The District's management created this downloadable financial risk action plan to describe its current and planned actions to reduce its financial risks. The action plan includes the District's identified root causes for each of its risk areas, its planned mitigating actions, and the estimated financial impact.

Analysis and data

The Measures page describes how each measure was calculated, how districts were identified as high risk for each measure, and other measure-related information.

High risk

Change in weighted student count

Analysis

-2.54%	-11.07%
(1-year change)	(4-year change)

Data

FY	Group A WSC
2026	538
2025	552
2024	573
2023	599
2022	605

What is this measure telling me?

This measure shows a district's change in group A weighted student count (WSC) over a 1- and 4-year period. A single-year substantial decrease in WSC, or smaller but repeated decreases over more years, may expose a district to higher financial risk due to the loss of student-count-generated revenue.

High risk

Budget limit reserve—

Operating budget

Analysis

-83.50%	-97.59%
(1-year change)	(4-year change)

Data

FY	Budget limit (in $)	Expenditures (in $)	Balance (in $)
2026	5,066,566
2025	5,369,984	5,349,186	20,798
2024	5,810,543	5,684,468	126,075
2023	6,064,528	5,535,034	529,494
2022	5,678,615	4,791,887	886,728
2021	4,983,891	4,120,593	863,298

What is this measure telling me?

This measure shows how a district's Maintenance and Operation (M&O) Fund budget limit reserve has changed over a 1- and 4-year period. Declining, negative, or unfunded M&O Fund budget limit reserves indicate higher financial risk.

High risk

Budget limit reserve—

Capital budget

Analysis

-29.28%	-75.93%
(1-year change)	(4-year change)

Data

FY	Budget limit (in $)	Expenditures (in $)	Balance (in $)
2026	366,952
2025	317,554	294,697	22,857
2024	435,145	402,824	32,321
2023	514,604	478,304	36,300
2022	400,724	239,157	161,567
2021	356,367	261,395	94,971

What is this measure telling me?

This measure shows how a district's Unrestricted Capital Outlay (UCO) Fund budget limit reserve has changed over a 1- and 4-year period. Declining, negative, or unfunded UCO Fund budget limit reserves indicate higher financial risk.

Financial position—

General Fund operating reserve ratio

Analysis

6.58%	16.59%
FY 2025 unaudited	FY 2024 audited

Data

FY	Balance (in $)	Expenditures (in $)
2025 unaudited	403,039	6,123,383
2024 audited	1,054,051	6,354,906

balance ÷ expenditures = operating reserve ratio

What is this measure telling me?

This measure shows the percent of General Fund monies held in reserve for future spending (i.e., fund balance), compared to total spending from the prior year. A negative operating reserve ratio indicates a negative fund balance, which means the district must use monies received in the following year to cover prior-year spending.

High risk

Financial position—

General Fund operating margin ratio

Analysis

-9.18%	-6.21%
FY 2025 unaudited	FY 2024 audited

Data

FY	Revenue (in $)	Expenditures (in $)
2025 unaudited	5,608,380	6,123,383
2024 audited	5,983,203	6,354,906

(revenue - expenditures) ÷ revenues = operating margin ratio

What is this measure telling me?

This measure shows the percent of district General Fund revenues not spent in the year received for each of the most recent 2 years. A district with below-average operating reserves exposes itself to higher financial risk each time its spending exceeds its revenues (i.e., negative operating margin).

High risk

Financial position—

General Fund change in fund balance

Analysis

-55.24%	-21.91%
FY 2024 to 2025 unaudited	FY 2023 to 2024 audited

Data

FY	Change amount (in $)
2024 to 2025 unaudited	-497,492
2023 to 2024 audited	-295,682

What is this measure telling me?

This measure shows the 1-year percentage change in a district's General Fund balance for each of the most recent 2 years. Declining fund balances or a negative fund balance in the most recent year indicate higher financial risk as less resources remain available for current and future needs.

Capital monies redirected to operations

Analysis

0.00%	0.00%
(FY 2026)	(5-year average)

Data

FY	Capital monies (in $)	Amount redirected (in $)
2026	274,992	0
2025	285,234	0
2024	298,845	0
2023	278,037	0
2022	244,282	0

What is this measure telling me?

This measure shows the percentage of intended capital funding the district has redirected to operational spending rather than capital spending in the current year and on average over the last 5 years. Districts that direct a substantial portion of their intended capital funding to operational spending may be at higher financial risk.

Small school budget limit adjustment

Analysis

N/A - District is too large to be eligible for adjustment.

Data

FY	Adjustment (in $)	Total operating and capital budget limit (in $)
2026	0	5,433,518
2025	0	5,687,538
2024	0	6,245,688
2023	0	6,579,132
2022	0	6,079,339

The small school adjustment is included in the total operating and capital budget limit.

What is this measure telling me?

This measure shows a district's additional budget capacity from a small school adjustment in the current year and each of the prior 4 years. The loss of the ability to include a small school budget limit adjustment or an unfunded small school budget limit adjustment due to a frozen tax rate may indicate higher financial risk.

Frozen tax rate

Analysis

District's primary property tax rate is not frozen.

What is this measure telling me?

This measure shows whether a district has a frozen primary property tax rate, limiting the District's ability to increase its property tax revenue to fund its allowable budget limits.

Receivership

Analysis

District is not in receivership.

What is this measure telling me?

This measure identifies whether a district is operating under a State Board of Education-appointed receiver due to gross mismanagement or insolvency.

Less common revenues in FY 2025

Some districts have access to revenues and budget capacity that are not available to all districts. These revenues may help lessen financial risks for some districts, but desegregation and small school adjustment revenues can contribute risk for other districts, if they result in a district's property tax rate being frozen, which can cause the district to accumulate unfunded budget capacity. Select the information icon to learn more about the revenues presented.

	Desegregation	$0
	Federal Impact Aid	$0
	Small school adjustment	$0
	Voter-approved budget overrides	$687,380
	Total less common revenues per student	$1,736

Source: Desegregation, small school adjustment, and voter-approved budget override amounts - FY 2025 Arizona Department of Education BUDG75 report. Federal Impact Aid amounts - FY 2025 district submitted, unaudited annual financial reports.

Joseph City Unified School District

Summary of risks identified

District action plan

Analysis and data

Change in weighted student count

Budget limit reserve—

Operating budget

Budget limit reserve—

Capital budget

Financial position—

General Fund operating reserve ratio

Financial position—

General Fund operating margin ratio

Financial position—

General Fund change in fund balance

Capital monies redirected to operations

Small school budget limit adjustment

N/A - District is too large to be eligible for adjustment.

Frozen tax rate

District's primary property tax rate is not frozen.

Receivership

District is not in receivership.

Less common revenues in FY 2025

Additional school district resources

Arizona Auditor General