What is this measure telling me, and why is it important?
This measure identifies whether a district was operating under a State Board of Education (SBE) appointed receiver as of December 9, 2022. The SBE appoints a receiver for a district if it finds gross mismanagement or insolvency , or when a district enters receivership as a consequence of using legislatively approved relief to deal with insolvency or inability to pay its bills, including payroll, when due. Generally, districts entering receivership do so after serious budgetary overspending and cash deficits have accumulated from recent district operations. The circumstances leading to receivership, or that require a district to remain in receivership, indicate high financial risk as the district must make adjustments not only to achieve a sustainable balance of revenues and spending in its current operations, but also to correct the prior overspending and cash deficits that led to the receivership.
Tell me more about receivership.
The process for receivership is based on A.R.S. §15-103, which gives the SBE the authority to appoint a receiver that is authorized to override any decision made by the district’s governing board, superintendent, or business manager. The receiver can reorganize a district’s finances and budget and terminate any district employee, including the superintendent and business manager, if the receiver determines such actions are in the district's best interest.
Districts have rarely been placed in receivership. In fact, since 2005, the SBE has placed only 6 districts in receivership. As of December 2022, all but 1 of those districts have successfully exited receivership by adjusting their spending to align with their revenues and eliminating the impact of their prior overspending and cash deficits. Some of the districts that were placed in receivership had not adequately reduced spending for a loss of student enrollment and related decreases in funding, while other districts were placed in receivership because of overspending in part from a lack of control over expansion costs for increasing student enrollment.
How were districts identified as high risk for this measure?
All districts in receivership as of December 9, 2022, were considered high risk for this measure.
Districts in receivership were determined based on review of SBE meeting minutes.
Districts at high risk for this measure
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