Despite Lingering Concerns, State Superintendent Recommends Approval of 113A Financial Plan

Despite lingering concerns over the financial condition of , the state superintendent has recommended that the Illinois State Board of Education approve the district's submitted financial plan during its meeting Thursday.

District 113A has been following a state-approved financial plan since being certified in financial difficulty in December 2009. The plan includes information on enrollment, staffing plans, borrowing, cash flow analysis, and budget expenditures and reductions.

The plan outlines four objectives for the district: maintain balanced budgets for fiscal years 2012, 2013, 2014 and beyond; implement and follow financial policies for fund balances cash-on-hand requirements; build fund balances over the next three years; and eliminate short-term borrowing for cash flow purposes.

According to a report from Christopher Koch, state superintendent of education, and Linda Riley Mitchell, chief fiscal officer, the superintendent is recommending that the state and board approve the most recent version of the financial plan, which will be discussed during a finance and audit meeting Wednesday afternoon and voted on during the state board's plenary session Thursday.

In the report, Koch and Mitchell acknowledge that District 113A has made improvements since 2009. However, the report states "ISBE staff remain concerned about the financial condition of the district, the number of revisions that have been made to District 113A's financial plan and underlying operational and financial issues that may have caused recent changes in District 113A management."

The report went on to state that ISBE staff remain concerned "that District 113A has an ambitious recovery planned in fiscal year 2012 and so many changes (both to the board and the administration) may make it difficult to effect a smooth management transition."

District 113A approved amended financial plans June 28, Aug. 30 and, most recently, Dec. 7. During each of the meetings, former District 113A Superintendent Tim Ricker indicated that the financial plan needed to be amended to include updated cash flow projections and information on tax anticipation warrants.

Each of the plans were approved by a 4-3 vote, with Aurelio and Board Members Karen Siston and Al Malley casting the dissenting votes. In , Aurelio and Malley raised concerns over the surplus amounts projected each year, claiming they are too large.

According to the ISBE report, the financial plan approved by District 113A board members Dec. 7 shows continued financial improvement and less reliance on TAWs, which the district continues to use to cover cash flow issues.

Last month, representatives from PMA Financial that the district's issuance of $1.8 million in TAWs to District 113A—scheduled to occur Friday—could be its last, as long as Cook County property taxes come through.

Despite the improvements projected in 2012, ISBE staff is concerned that the actual improvement in 2011 was not as much as was projected in the district's original plan, the report states. Additionally, the district's overall operational fund balances continue to be negative.

These challenges could be further complicated by the fact that District 113A recently hired a new business manager (Barbara Germany), has four new board members and will soon be under the direction of a new superintendent, Koch and Mitchell stated.

"Controlling costs and managing operations to achieve the aggressive financial plan may prove to be a challenge given the transition underway in the district," the report states.

The report, however, states that ISBE staff will continue to work with district administration and the local school board to monitor the financial condition of the district and its adherence to the approved plan.

ISBE officials were not immediately available for comment.

Board President Mike Aurelio informed the board of the state board meeting Tuesday night. Approval of the financial plan is required to issue the district's next round of tax anticipation warrants Friday to , he said. 

Assistant Superintendent Mary Gricus and Germany will attend the Wednesday's meeting via conference call.