A state audit released Monday raised flags about the financial health of 42 percent of Colorado school districts over a three-year period ending in 2013.
Of the state’s 178 school districts, 76 missed at least one of the benchmarks used to evaluate their financial health, the Colorado Office of the State Auditor’s report showed. That’s up from 48 schools in last year’s report.
For the first time, one district — Silverton 1 in southwestern Colorado — missed three financial benchmarks. The district had missed only one in 2012.
The majority of the districts identified are in rural areas.
The analysis evaluates five ratios based on funding reserves, an ability to meet obligations for the next three years, and debt.
The marker that districts missed most was the operating margin ratio that looks at balance of revenues and expenditures.
“The trend identifies a decline over the three-year period, which could result from a reduction of the operating margin due to deliberate spending down of fund balance to supplement operations or planned capital project expenditures that used reserves,” the report explains.
Silverton Superintendent Kim White said the audit findings were not unexpected.
Silverton’s school district dipped into reserves in 2013 and again in 2014. It also increased debt by passing a mill levy override to remodel its historic school.
“It’s really unfortunate for any district, but particularly for any small district,” White said.
Part of the challenge for small, rural school districts, she said, is complying with state mandates.
“To meet all the different requirements for high quality teachers and serving non-English language speakers, you have to have people in place for that,” White said. “The cost for having someone in these roles is comparable to the cost in larger districts.”
In the metro area, Jefferson County Public Schools missed none of its benchmarks. It had missed two in the 2012 and 2013 reports.
Jeffco officials say the passage of a 2012 bond and mill levy override helped the district stop spending down its reserves and instead focus on building them up.
“We’re in a solid place now,” Jeffco superintendent Dan McMinimee said.
Lorie Gillis, the district’s chief financial officer, said the reserves grew to $49 million in 2013 — up from $36 million in 2012. Gillis said the reserve fund grew again in 2014.
Yesenia Robles: 303-954-1372, yrobles@denverpost.com or twitter.com/yeseniarobles
