The status of the Highland and Triad school districts’ finances has not changed over the last year, according to their Annual Financial Profiles (AFP), which were released Friday by the Illinois State Board of Education (ISBE).
Highland is on the state’s “Financial Review” list.
“The report is of no surprise to us,” said Highland Superintendent Mike Sutton. “We have been in the Review category each of the last three years — in fact our score improved slightly in 2015/16 because expenditures were less than revenue and our debt obligations decreased.
Triad is on the “Financial Watch” list.
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“Triad is on the Financial Watch list for the most part due to reliance on the state for funding,” said Triad Superintendent Leigh Lewis.
Triad receives approximately 35 percent of its funding from the state, Lewis said.
“Since 2010, Illinois has been pro-rating general state aid until this fiscal year. This year the state has fully funded general state aid but is behind $2 million in payments for transportation and special education. From fiscal years 2010 to 2016, the Triad District lost approximately $5 million in general state aid. Keep in mind expenses have increased, not decreased, from 2010 to 2016,” Lewis said.
The profiles provide school districts and their stakeholders with information on school districts’ financial integrity. The profiles examine five key indicators of financial integrity: fund balance to revenue ratio, expenditure to revenue ratio, days cash on hand, percentage of short-term borrowing ability remaining, and percentage of long-term borrowing ability remaining.
“Triad has no short-term debt, and scores perfect on that factor,” Lewis said. “The only factor for the financial watch list that is not related to the lack of state funding is Triad’s long-term debt. Because Triad has built schools recently, the district will be paying those buildings off until the 2028,” Lewis said.
School districts receive a score from 1.00 (lowest financial strength) to 4.00 (highest financial strength) and a corresponding designation:
▪ 4.00 through 3.54: Financial Recognition;
▪ 3.53 through 3.08: Financial Review;
▪ 3.07 through 2.62: Financial Warning; and
▪ 2.61 through 1.00: Financial Watch.
Highland’s score was 3.35. Triad’s was 2.45.
ISBE created the 2017 AFPs by analyzing school districts’ fiscal year 2016 annual financial reports.
Statewide in fiscal year 2016, the increase in total operational revenues exceeded the increase in total operational expenditures, leading to a slight increase in school districts’ overall scores for financial strength.
However, more than 1/4 of all Illinois school districts issued short- or long-term debt to sustain normal operations. School districts pay interest on outstanding debt, which decreases the funds available for education services in the future. Many school districts also eliminated staff and programming to reduce operational costs.
ISBE provides tools and guidance on financial management to all school districts seeking assistance and to school districts designated in Financial Watch. But State Superintendent of Education Tony Smith said what really needs to happen is Illinois has to fundamentally change how schools are funded.
“Illinois school districts’ financial health has improved over the last year, but at what cost to students?” said Smith. “Illinois must overhaul our school funding model, which is the most inadequate and the most inequitable in the country. Every school district in the state is having to make hard choices to cover the day-to-day costs of keeping their schools’ doors open. Forcing school districts to rely primarily on taxing local property wealth to fund education inherently means the students who need the most will receive the least. We expect dedication, innovation, and improvement from our administrators, educators, and students; we owe them the resources necessary to meet those expectations.”
Statute requires the AFP analysis to count mandated categorical program (MCAT) funds as revenue, though school districts received their final fiscal year 2016 quarterly MCAT payment six months late. School districts have not received any MCAT payments for the first three quarters of fiscal year 2017.
“Our mandated categorical revenue is included in our Annual Financial Report, since we report on the accrual basis,” Sutton said. “However, the cash ratio was adjusted because we did not actually receive the payments. We continue to focus on what we have control over — our expenses. We are hopeful that the state is able to achieve a budget for next year and some growth in revenue occurs. That is very optimistic.”
Other area schools’ standings
In Madison County, Alton, Bethalto and Edwardsville also made the Watch list. East Alton Elementary was on the Early Warning list. East Alton-Wood River High School District, Madison, and the Wood River-Hartford Elementary District were on the Review list. Collinsville, Granite City, Roxana and Venice were on the Recognition list. Staunton, which includes the Livingston area in northeastern Madison County, was also on the Recognition list.
In Bond County, Greenville is on the Early Warning list. Mulberry Grove was on the Review list.
In Clinton County, Aviston, Bartelso, Breese Elementary, were all on the Review list. Carlyle, Breese Central High School, Damiansville, Germantown, North Wamac, St. Rose and Wesclin were all on the Recognition list. Willow Grove was on the Early Warning list.