The state budget committee has signed off on a list of school financial risk indicators – meaning schools now know which factors the state plans to monitor in order to track each corporation’s fiscal health.
The state’s Distressed Unit Appeal Board, or DUAB, oversees schools in financial trouble, and this year a committee has worked to create a list of eight school financial status indicators for the board to monitor. That way the board can see which schools might be at risk for major money issues then step in before it’s too late.
The list looks at information on annual student enrollment, total cash balances, yearly surpluses or shortfalls, expenses versus income, funding sources, and how much money corporations use for paying employees compared to how much they have overall.
Another indicator focuses on how much a district uses voter-approved referendum funding. DUAB executive director Courtney Schaafsma says it’s crucial to know how losing those dollars could impact a corporation.
“That was important to see how heavily a school corporation is relying on the referendum revenue for every day operating expenses,” she says.
The fiscal indicator committee and the subsequent list it’s been tasked with curating stems from a controversial bill lawmakers passed earlier this year. Gary and Muncie schools were taken over for financial problems last year, and lawmakers sought a solution to prevent similar situations from unfolding elsewhere.
The fiscal indicator committee also includes secondary details about a district’s student demographics and community population alongside the indicators.
Schaafsma says that’s important in order to provide context for each corporation across the state.
“Those particular items were things the committee felt were not something that we would ever use as an indicator of financial health, but they certainly help to flesh out the full story for the school corporation,” she says.
Schaafsma says the fiscal indicator committee will meet once more to make the list official, and it likely will remain the same based on the budget committee’s positive feedback.
Data based on the indicators will be collected and shared with DUAB, other state officials, and the public starting next year.