At least twice per year, local education agencies self-certify their ability to meet their financial obligations and submit that certification to their overseeing agency for approval. Districts submit the documents to county offices of education, and county offices submit theirs to the CDE. The three possible certifications include:

Positive: the LEA will meet its obligations for the current fiscal year and two subsequent fiscal years;

Qualified: the LEA may not be able to meet its obligations for the current fiscal year or two subsequent fiscal years; and

Negative: the LEA will be unable to meet its obligations for the remainder of the fiscal year or the subsequent fiscal year.

Districts' financial statements reveal that a record number of California school districts are struggling to bring their expenditures and revenues into balance. The figure below shows that 174 out of 1,077 local education agencies-which includes school districts, county offices of education, and joint powers agencies-had qualified or negative certifications in 2009-10. The vast majority of the 174 LEAs with such certifications were school districts, but two were county offices of education and one was a joint powers agency.

The number of local education agencies with qualified or negative certifications in the second interim reporting period has grown 

Notes: Districts and other local education agencies are required to file two interim reports each fiscal year on the status of their fiscal health. The first report covers the period ending Oct. 31, and the second report (shown in the chart above) covers the period ending Jan. 31.

All “negative” totals consist solely of school districts. The “qualified” totals are also mostly school districts, but they do include one county office of education (COE) in 2005–06 and 2006–07, two COEs in 2007–08, two COEs and one Regional Occupational Program in 2008–09, and two COEs and one joint powers agency in 2009–10.

Data: California Department of Education (CDE)

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