School district financial risk analysisDecember 2020


Demographic information

Less common revenues

County: Navajo County
Operational peer group (FY 2020): 11
Legislative district(s): 7
FY 2019 FY 2020
Students attending: 131 121
Number of Schools: 1 1
FY 2020
Federal impact aid
Small school adjustment
Voter-approved budget overrides
Total less common revenues per pupil

Analysis results

Summary of risks identified:

The State Board of Education placed the District in receivership and appointed a financial receiver in fiscal year (FY) 2011 when the District overspent its operating budget limit by over $1 million and incurred a $695,000 deficit in its New School Facilities Fund after constructing a new high school building. At the end of FY 2020, the District reported a remaining deficit balance of over $336,000 in the New School Facilities Fund. The District’s weighted student count has fluctuated since FY 2017, declining 21 percent since FY 2019, reducing its student-count-generated revenues and budget limits. While the District ended FY 2020 with a positive operating budget limit reserve, the reserve it reported was 79 percent unfunded since the District has not levied property taxes or transferred Impact Aid Fund monies, as allowed by State law, to fund the portion of its equalization and transportation formula funding budget capacity that is not funded by the State. On average since FY 2017, the District redirected 80 percent of its capital monies to operational spending, including 100 percent in FY 2021. Those redirected monies helped the District pay down its deficit balance but also contributed to a 96 percent decline in its capital budget limit reserve since FY 2017.

District response:

Cedar Unified School District (“CUSD’) acknowledges the remaining deficit balance of $336,253.00 in the new school facilities fund. In February 2019, the District developed a Receivership Exit Plan that was provided to the Arizona State Board of Education. The Receivership Exit Plan included the repayment of the New School Facilities Fund deficit over a five year period to be completely eliminated by end for FY 2023. As of the end of fiscal year 2020, CUSD’s reduction of the New School Facilities Fund deficit exceeds the District’s repayment schedule provided in the District’s Receivership Exit Plan. The district has been paying the deficit from funds allocated by Impact Aid through direct transfer from Impact Aid allocations.

The reduction in the District’s weighted student count (‘WSC”) from FY 2019 to the current WSC is the result of a combination of the Covid-19 pandemic resulting in reduced enrollment in the kindergarten program and over the last four years, the superintendent position with the district has been a revolving door. This has led to mistrust from the community, lack of leadership in the academic programs, and other discords in the school including corrective action in different programs. In addressing the fluctuation of student enrollment, the current superintendent and personnel have developed and implemented a strategic plan that starts with regaining the trust of the community through academic standards based aligned curriculum, professional development that addresses the needs of the students, parents and staff, that lead to student achievement and through creating a culture conducive to a healthy environment for all involved.

The District continuously monitors student-count-generated revenues and budget limits and makes the necessary spending adjustments through hiring freezes reduction in staffing and reduced spending when necessary as a result of reduced State funded revenues. During the Covid-19 pandemic and the current reduced student count the district has been operating at a reduced staff and has had reduced transportation costs both in fuel and repairs and maintenance that has enable the District to operate within the amounts funded by the State.

The District has and continues to operate only within its amounts funded by the State and not to the funding budget capacity limit. The District does receive Impact Aid Funds that are used to for capital expenses and operational spending in excess of amounts funded by the State. However, the District does not spend unfunded budget limits and has consistently underspent the amounts funded by the State over the last several years.

Although the District redirects its capital monies to operational spending that is funded by the State. The District capital spending needs has been funded by Impact Aid or through School Facilities Board grants. During FY 21, the District has been provided with a CARES ACT grant, some of which has been allocated to capital spending.

Change in weighted student count
-15.4% -12.3%
(1-year) (4-year)
Fiscal year Group A WSC
2021 143
2020 169
2019 182
2018 164
2017 163
Operating budget limit reserve
100.0% 42.3%
(1-year change) (3-year change)
Fiscal year Balance
2020 $2,313,030
2019 $1,027,302
2018 $2,468,604
2017 $1,625,043
Capital budget limit reserve
100.0% -96.1%
(1-year change) (3-year change)
Fiscal year Balance
2020 $74,656
2019 ($1)
2018 $1,924,904
2017 $1,924,904
General Fund operating reserve ratio
28.4% 11.6%
FY 2020 unaudited 2019 audited
Fiscal year Balance Expenditures
2020 unaudited $518,379 $1,826,934
2019 audited $248,727 $2,142,253
General Fund operating margin ratio
14.3% 3.0%
FY 2020 unaudited 2019 audited
Fiscal year Revenue Expenditures
2020 unaudited $2,130,867 $1,826,934
2019 audited $2,208,878 $2,142,253
General Fund change in fund balance
100.0% 69.0%
FY 2019 to FY 2020 unaudited 2018 to 2019 audited
Fiscal year Change amount
2019 to 2020 unaudited $303,716
2018 to 2019 audited $101,554
Capital monies redirected to operations
100.0% 80.0%
(FY 2021) (5-year average)
Fiscal Year Capital monies Amount redirected
2021 $65,716 $65,716
2020 $74,657 $0
2019 $63,542 $63,542
2018 $44,062 $44,062
2017 $6,015 $6,015
Small school budget limit adjustment

District is eligible for adjustment but did not increase its budget limit in FY 2021.

Fiscal year Adjustment
2021 $0
2020 $0
2019 $0
2018 $0
2017 $0
Frozen tax rate

District's primary property tax rate is not frozen.


District was placed in receivership in April 2011.