BY MICHELLE L. KLAMPE
STAFF WRITER
mklampe@pe.com

Published: 21 May 2012 10:14 PM

A record number of California schools, including 31 in the Inland Empire, may not be able to pay their bills in the next couple of years, the California Department of Education announced Monday, May 20.

Nearly 20 percent of California school districts and other local education agencies such as county education offices are in financial jeopardy, according to a list compiled by state officials using financial reports from March. The list includes 18 of 23 school districts in Riverside County and 13 of 33 school districts in San Bernardino County.

Twelve districts — none in the Inland Empire — have indicated they cannot meet their financial obligations this fiscal year or next, a budget status known as negative certification. Another 176 districts indicated they may not be able to pay their bills this year or in 2012-13 or 2013-14, a qualified certification.

Districts with a qualified budget could become insolvent within two years unless they make additional cuts or bring in more revenue. Districts with a negative budget cannot pay their bills this year or in 2012-13. Under both conditions, districts face increased supervision and sometimes intervention from the county office of education to ensure they don’t become insolvent.

The number of agencies on the financial edge has increased by 61 since the list was last released in February and up 45 over the previous year’s list, state officials said. In 2006-07, just 24 school districts had a negative or qualified certification, and none were in the Inland region.

“Having 13 is crazy,” said Dan Evans, a spokesman for the San Bernardino County office of education. “That is a stunning number that should give everybody pause to say, ‘What’s going on here?’”

State and local education officials said the dramatic increase is a by-product of the prolonged state budget crisis and the unknowns surrounding tax measures being proposed to help fund schools. Paul Jessup, deputy superintendent of the Riverside County office of education, said moving school districts back onto solid financial footing will be difficult as long as the state’s financial woes continue.

“We’re in desperate need of an honest state spending plan,” he said. “We keep on getting budgets built on hope. Hope is not a plan.”

Districts have been required since the 1990s to file two financial reports, known as interim reports, one each by Dec. 15 and March 15. Districts review their fiscal health for the current year and two subsequent years. The reports look at cash flow, reserves, deficit spending, enrollment and attendance, status of labor agreements and more.

The county office of education reviews the reports and submits them to the state Department of Education. When districts have qualified or negative certification, they face additional oversight from the county office, which can step in to veto decisions on spending. In the worst case scenarios, a school district that has run out of money can seek an emergency loan from the state Department of Education.

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