Coachella Valley Unified School District Report

Fiscal Health Risk Analysis March 13, 2025 Coachella Valley Unified School District Michael H. Fine Chief Executive Officer March 13, 2025 Frances Esparza, Ed.D., Superintendent Coachella Valley Unified School District 87-225 Church St. Thermal, CA 92274 Dear Superintendent Esparza: In January 2025, the Coachella Valley Unified School District and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for FCMAT to conduct a FCMAT Fiscal Health Risk Analysis of the district. The agreement stated that FCMAT would perform the following: Prepare an analysis using the 20 factors in FCMAT’s Fiscal Health Risk Analysis (FHRA) and identify the Client’s specific risk rating for fiscal insolvency. This report contains the FHRA with the study team’s findings. FCMAT appreciates the opportunity to assist the Coachella Valley Unified School District and extends thanks to all the staff for their assistance during fieldwork. Sincerely, Michael H. Fine Chief Executive Officer Michael H. Fine • Chief Executive Officer 1300 17th Street – City Centre, Bakersfield, CA 93301-4533 • Tel. 661-636-4611 • Fax 661-636-4647 www.fcmat.org Contents Contents About FCMAT ..................................................................................................3 Purpose and Services .............................................................................................3 History .........................................................................................................................4 Introduction ......................................................................................................5 Background ...............................................................................................................5 Fiscal Health Risk Analysis Guidelines ...............................................................5 Study Team ................................................................................................................6 Fiscal Health Risk Analysis .......................................................................... 7 Summary .................................................................................................................... 7 About the Analysis ...................................................................................................9 Areas of High Risk....................................................................................................9 Budget and Fiscal Status ....................................................................................................9 Material Weakness Questions ...........................................................................................9 Score Breakdown by Section ................................................................................11 Fiscal Health Risk Analysis Questions ...............................................................12 Annual Independent Audit Report ..................................................................................12 Budget Development and Adoption ..............................................................................12 Budget Monitoring and Updates .....................................................................................14 Cash Management ..............................................................................................................16 Charter Schools ...................................................................................................................16 Collective Bargaining Agreements ..................................................................................17 Contributions and Transfers .............................................................................................19 Deficit Spending (Unrestricted General Fund) ............................................................19 Contents Employee Benefits .............................................................................................................20 Enrollment and Attendance .............................................................................................20 Facilities .................................................................................................................................21 Fund Balance and Reserve for Economic Uncertainties .........................................23 General Fund – Current Year ..........................................................................................23 Information Systems and Data Management ..............................................................24 Internal Controls and Fraud Prevention .......................................................................25 Leadership and Stability ...................................................................................................26 Multiyear Projections ..........................................................................................................27 Non-Voter-Approved Debt and Risk Management ....................................................27 Position Control ..................................................................................................................28 Special Education ...............................................................................................................28 Risk Score, 20 numbered sections only ...........................................................29 District Fiscal Solvency Risk Level, all FHRA factors ....................................29 Appendix ........................................................................................................30 Appendix A – Comparison of 2019 and 2025 FHRA Results ......................31 Appendix B – Study Agreement ........................................................................44 About FCMAT Purpose and Services About FCMAT Purpose and Services FCMAT was created by the California Legislature to help California’s transitional kindergarten through grade 14 (TK-14) local educational agencies (LEAs) avoid fiscal insolvency. Today, FCMAT helps LEAs iden- tify, prevent and resolve financial, management, program, data, and oversight challenges; provides pro- fessional learning; produces and provides software, checklists, manuals and other tools; and offers other related school business and data services. FCMAT may be asked to provide fiscal crisis or management assistance by a school district, charter school, community college, county superintendent of schools, the state superintendent of public instruction, or the Legislature. When FCMAT is asked for help with management assistance or a fiscal crisis, FCMAT management and staff work closely with the requesting LEA to meet their needs. Often this means conducting a formal study using a FCMAT study team that coordinates with the LEA for on-site fieldwork to evaluate specified operational areas and subsequently produces a written report with findings and recommendations for improvement. For more immediate needs in a specific area, FCMAT offers short-term technical assistance from a FCMAT staff member with the required expertise. To help meet the need for qualified chief business officials (CBOs) in LEAs, FCMAT offers four different CBO training and mentoring programs that consist of 11 or 12 diverse two-day training sessions over the course of a full year. For agencies with professional learning needs, FCMAT offers workshops on specific topics. Popular topics include associated student body operations, use of FCMAT’s Projection-Pro online financial forecasting software, use of FCMAT’s Local Control Funding Formula (LCFF) Calculator, and data reporting for the California Longitudinal Pupil Achievement Data System (CALPADS). FCMAT staff and management also frequently make presentations at various professional conferences. The California School Information Services (CSIS) service of FCMAT helps the California Department of Education (CDE) operate CALPADS; helps LEAs learn about CALPADS, resolve data issues and meet reporting requirements; and provides LEAs with training and leadership in data management. CSIS also developed and continues to host and improve the Standardized Account Code Structure (SACS) web-based financial reporting system for all California LEAs, and provides ed-data.org, which gives educators, policy- makers, the Legislature, parents and the public quick access to timely and comprehensive data about TK-12 education in California. Since it was formed, FCMAT has provided LEAs with the types of help described above on more than 2,000 occasions. FCMAT’s administrative agent is the Kern County Superintendent of Schools. FCMAT is led by Michael H. Fine, Chief Executive Officer, and is funded by appropriations in the state budget and modest fees to requesting agencies. Workshop schedules, manuals, presentation slide decks, Projection-Pro software, LCFF calculators, past reports, an online help desk, and many other resources are available for download or use at no charge on FCMAT’s website. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 3 About FCMAT History History FCMAT was created by Assembly Bill 1200 (Chapter 1213, Statutes of 1991) and Education Code 42127.8. Assembly Bill 107 (Chapter 282, Statutes of 1997) added Education Code 49080, which charged FCMAT with responsibility for CSIS and its statewide data management work, and Assembly Bill 1115 (Chapter 78, Statutes of 1999) codified CSIS’ mission. Assembly Bill 1200 created a statewide plan for county offices of education and school districts to work together locally to improve fiscal procedures and accountability standards. Assembly Bill 2756 (Chapter 52, Statutes of 2004) gave FCMAT specific responsibilities for districts that have received emergency state loans. In January 2006, Senate Bill 430 (Chapter 357, Statutes of 2005) amended Education Code 42127.8, and Assembly Bill 1366 (Chapter 360, Statutes of 2005) amended Education Codes 42127.8 and 84041. These new laws expanded FCMAT’s services to include charter schools and community colleges, respectively. Assembly Bill 1840 (Chapter 426, Statutes of 2018) changed how fiscally insolvent districts are administered once an emergency appropriation has been made, shifting oversight responsibilities from the state to the local county superintendent to be more consistent with the principles of local control, and giving FCMAT new responsibilities associated with the process. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 4 Fiscal Health Risk Analysis Introduction Background The Coachella Unified School District is governed by a seven-member board of trustees and spans 1,250 square miles, serving the communities of Coachella, Thermal, Mecca, Oasis, Indio and the Salton Sea. The district educates 16,046 students1 from transitional kindergarten through grade 12 across 14 elementary schools, three middle schools, one continuation high school, three comprehensive high schools and one adult school. Additionally, the district oversees one independent charter school with an enrollment of 230 students. In 2023-24, the most recent year for which data is available, 92.4% of district students were socioeconom- ically disadvantaged, 42.4% were English learners, and the unduplicated pupil count — which includes students who are English learners, foster youth, and those eligible for free or reduced-price meals — was 94.4%.2 In November 2024, the Riverside County Superintendent of Schools designated the district as a lack of going concern under Education Code (EC) 42127.6(c). This designation was based on the district’s multiyear financial projection, the lack of a detailed fiscal stabilization plan, and the limited time to implement one. In January 2025, in accordance with EC 42131(a)(2), the county superintendent downgraded the governing board’s certification of the district’s 2024-25 first interim financial report from positive to qualified, indicat- ing that the district may not meet its financial obligations for the current or two subsequent fiscal years. Planned budget solutions, which are expected to be implemented in 2025-26, are already incorporated into the district’s projected budget. Despite these measures, the district projects deficit spending of $11.9 mil- lion in 2024-25, $18.9 million in 2025-26, and $29.3 million in 2026-27. Further, if the district fails to imple- ment its board-approved fiscal stabilization plan within the specified timeline, it will not be able to maintain the state-mandated 3% minimum reserve requirement in 2026-27. To assess the district’s risk of insolvency, FCMAT conducted a fiscal health risk analysis using financial data from the 2024-25 first interim report as the basis for its analysis. Fiscal Health Risk Analysis Guidelines FCMAT entered into a study agreement with the Coachella Valley Unified School District on January 22, 2025, and a study team visited the district on February 4-6, 2025 to conduct interviews, collect data and review documents. After the fieldwork, the study team continued to analyze the gathered documents and data. This report summarizes the team’s findings and conclusions from those activities. FCMAT’s reports focus on systems and processes that may need improvement. Those that may be func- tioning well are generally not commented on in FCMAT’s reports. In writing its reports, FCMAT uses the Associated Press Stylebook and its own short internal style guide, which emphasize plain language, capital- ize relatively few terms, and strive for conciseness, clarity and simplicity. 1Ed-Data. (n.d.). Coachella Valley Unified [District profile]. Ed-Data. Retrieved March 4, 2025, from https://www.ed-data.org/district/Riverside/ Coachella-Valley-Unified. 2Ed-Data. (n.d.). Coachella Valley Unified School District [Web page]. Ed-Data. Retrieved March 4, 2025, from https://www.ed-data.org/district/ Riverside/Coachella-Valley-Unified. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 5 Fiscal Health Risk Analysis Study Team The team was composed of the following members: Jennifer Nerat, CFE Robbie Montalbano, CFE FCMAT Intervention Specialist FCMAT Chief Analyst Cassady Clifton FCMAT Technical Writer Each team member reviewed the draft report to confirm its accuracy and to achieve consensus on the analysis. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 6 Fiscal Health Risk Analysis Fiscal Health Risk Analysis For TK-12 School Districts Dates of fieldwork: February 4-6, 2025 School District: Coachella Valley Unified School District Summary In May 2019, FCMAT conducted a fiscal health risk analysis (FHRA) for Coachella Valley Unified School District, which identified a high risk of fiscal insolvency. Key areas of concern included declining enrollment, ongoing deficit spending, erosion of the unrestricted general fund balance, and inadequate reserves. Since then, the COVID-19 pandemic led to a temporary infusion of funding into local educational agencies (LEAs) to address student needs. This funding masked the district’s existing structural deficit, delaying nec- essary corrective actions. In the current fiscal year, the district continues to support ongoing expenditures with one-time pandemic funding. The areas of concern today remain largely unchanged from six years ago. A comparison of the 2019 and 2025 FHRA section answers can be found in Appendix A of this report. Of the 20 functional areas reviewed in 2025, the following pose the highest risk to the district and should be the primary focus for improvement: • Budget Monitoring. • Collective Bargaining Agreements. • Deficit Spending. • Enrollment and Attendance. • Fund Balance and Reserves for Economic Uncertainties. • Leadership and Stability. At the time of FCMAT’s fieldwork, the 2023-24 independent financial audit report had not been completed or presented to the board by the January 31, 2025 statutory deadline, as required by Education Code (EC) 41020. This delay creates uncertainty regarding the district’s 2024-25 beginning and ending fund balances. Any findings could have a material negative impact on the district’s current budget. The 2024-25 first interim report projects unrestricted general fund deficit spending of $11.9 million in 2024-25, $18.9 million in 2025-26, and $29.3 million in 2026-27, reducing the unrestricted general fund balance to $11.1 million in 2026-27 — equivalent to the state-mandated 3% minimum reserve requirement. Maintaining this reserve is contingent on implementing planned expenditure reductions outlined in the dis- trict’s fiscal stabilization plan. Failure to implement these reductions will result in insolvency. School district budgets evolve as new assumptions and financial data are known and incorporated. However, in reviewing the district’s financial reports, FCMAT identified weaknesses in budget monitoring and revision practices. The 2024-25 first interim report includes budget solutions as part of a fiscal stabilization plan, with approximately $42.1 million in expenditure reductions for 2025-26 and $4.1 million for 2026-27. However, key details regarding these reductions and other budget solutions were not clearly presented to the board. Furthermore, including these reductions in the multiyear projection is unreasonable because some require collective bargaining, board approval, and implementation before they can be realized. Additionally, FCMAT found that budget revisions for salary and benefit increases from collective bargaining agreements negotiated in 2024 were not entered into Galaxy, the financial system hosted by the county office of education. EC 42142 mandates that within 45 days of adopting a collective bargaining agreement, Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 7 Fiscal Health Risk Analysis the district superintendent must submit necessary budget revisions to the county superintendent to ensure the agreement’s financial impact is accurately reflected in the current fiscal year. The district has not complied with statutory requirements for public disclosure of tentative collective bar- gaining agreements. Government Code 3547.5 requires school districts to disclose at public meetings the major provisions of a tentative collective bargaining agreement — including, but not limited to, the costs incurred for the current and subsequent fiscal years — before entering into the agreement. Additionally, this law mandates that the district superintendent and the chief business official (CBO) certify in writing that the district can meet the costs throughout the agreement’s term. In early 2024, the governing board approved collective bargaining agreements with the district’s classified and certificated bargaining units; however, the required public disclosure process was not followed. The disclosure of the classified bargaining unit agreement for 2023-24 was presented to the board on February 15, 2024 — two weeks after the board approved the tentative agreement on February 1, 2024. Similarly, the certificated bargaining unit’s tentative agreement was approved on January 18, 2024, but the disclosure was not presented to the board until February 15, 2024. The district’s enrollment has declined by 1,839 students since 2019-20, resulting in a significant loss of revenue. While processes can be implemented to reduce interdistrict student transfers, the district did not provide documentation to FCMAT showing that it follows board policy to limit outgoing interdistrict trans- fers. Additionally, the district lacks a plan for addressing enrollment losses to charter schools. Accurate student data collection and reporting is critical to ensure the district receives all funding it is entitled to. At the time of FCMAT’s fieldwork, the California Longitudinal Pupil Achievement Data System (CALPADS) Fall 1 data submission had recently been certified. However, staff reported that necessary cor- rections were not made before submission, requiring the district to request the submission be reopened to correct the errors. Each board has a fiduciary responsibility to protect the school district’s financial health, which includes ensuring a balanced budget and maintaining adequate reserves. However, the district board lacks a cohe- sive approach to budget and governance training, which is essential for supporting the performance of its fiduciary duty. All board members should receive governance and budget training at least annually; how- ever, attendance among the district’s board members is inconsistent — some participate in training of their choice, while others do not attend at all. Board policies and administrative regulations should be regularly reviewed and updated to align with legal requirements and the board’s vision and goals for the district. The district has a policy committee composed of district staff and labor partners, responsible for reviewing, providing input, and approving proposed policies and updates before they are presented to the board for approval. While staff reported that this process is collaborative, they also stated that it is time-consuming, resulting in few policies being adopted or updated in recent years. The district’s superintendent has served since July 2024, and at the time of FCMAT’s fieldwork, the CBO position was vacant, with an interim filling the role. The district’s administration is responsible for maintain- ing the integrity of district systems, securing assets, and ensuring the board receives accurate and reliable information to support informed decision-making that protects the district’s fiscal solvency. However, this analysis identifies several critical areas related to data integrity and decision-making that require improvement, including position control, charter school oversight, student data reporting, informa- tion systems, and fraud reporting. Further details on these issues can be found in their respective sections in the report. FCMAT’s analysis for this FHRA determined that the district’s score from the 20 numbered sections is 42.6. District Fiscal Solvency Risk Level: High Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 8 Fiscal Health Risk Analysis About the Analysis The Fiscal Crisis and Management Assistance Team (FCMAT) developed the Fiscal Health Risk Analysis (FHRA) to help evaluate a school district’s fiscal health and risk of insolvency in the current and two subse- quent fiscal years. The FHRA consists of 20 sections, each including specific questions related to essential functions and processes. These sections and questions are based on FCMAT’s extensive work since the inception of Assembly Bill 1200 in 1991 and represent common indicators of fiscal risk or potential insolvency observed in school districts that have neared insolvency and required external assistance. Each analysis section affects fiscal stability, and neglecting any of these areas will ultimately lead to the district’s fiscal failure. The analysis aims to determine the district’s level of risk at the time of evaluation. A higher number of “No” responses in the analysis indicates an increased risk of insolvency or other fiscal issues for the district. Not all sections or questions carry equal weight; some areas pose a higher risk and thus have a greater impact on the district’s fiscal stability. To help the district, narratives are provided for each “No” response, explaining the reasoning behind the response and outlining the actions needed to achieve a “Yes” in the future. Identifying issues early is the key to maintaining fiscal health. Diligent planning allows school districts to better understand their financial objectives and implement strategies that sustain fiscal efficiency and long- term solvency. School districts should consider completing the FHRA annually to assess their fiscal health and track their progress. Areas of High Risk The following sections on this page and the next two pages repeat certain questions and answers found in the “Fiscal Health Risk Analysis Questions” section later in this report. These sections identify conditions that create a significant risk of fiscal insolvency. A “No” response to any of these questions will supersede all other scoring and elevate the district’s overall risk level. Budget and Fiscal Status: Is district currently without the following? Yes No Disapproved budget ✓ ☐ Negative interim report certification ✓ ☐ Three consecutive qualified interim report certifications ✓ ☐ Downgrade of an interim certification by the county superintendent ☐ ✓ “Lack of going concern” designation ☐ ✓ Material Weakness Questions Yes No N/A 2 5 Has the district’s budget been approved unconditionally by September 15th by the county superintendent of schools in the current and two prior fiscal years ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 9 Fiscal Health Risk Analysis 3 4 Following board approval of collective bargaining agreements, does the district make necessary budget revisions in the financial system to reflect settlement costs in accordance with EC 42142? ☐ ✓ ☐ 3 6 Has the district addressed any deficiencies the county superintendent of schools has identified in its oversight letters to the district in the most recent and two prior fiscal years? ☐ ✓ ☐ 4 3 Does the district forecast its general fund cash flow for the current and subsequent year and update it as needed to ensure cash flow needs are known? ✓ ☐ ☐ 4 4 If the district’s cash flow forecast shows insufficient cash in its general fund to support its current and projected obligations, does the district have a reasonable plan to meet its cash flow needs for the current and subsequent year? ☐ ☐ ✓ 5 2 Has the district fulfilled, and does it have evidence showing fulfillment of, its oversight responsibilities in accordance with EC 47604 32? ☐ ✓ ☐ 5 3 Are all charters authorized by the district going concerns and not in fiscal distress? ✓ ☐ ☐ 6 3 Does the district accurately quantify the effects of collective bargaining agreements and include complete disclosure documents that show the impact on its budget and multiyear projections? ☐ ✓ ☐ 6 4 Based on the presettlement analysis, did the district identify related costs or savings, and did it identify ongoing revenue sources or expenditure reductions to support the agreement in the current and subsequent years? ☐ ✓ ☐ 7 2 If the district has deficit spending in funds other than the general fund, has it included in its multiyear projection sufficient transfers from the unrestricted general fund to cover any projected negative fund balance? ☐ ☐ ✓ 8 3 If the district has deficit spending in the current or two subsequent fiscal years, has the board approved and implemented a plan to reduce and/or eliminate deficit spending to ensure fiscal solvency? ☐ ✓ ☐ 10 5 Are the district’s enrollment projections and assumptions based on historical data, industry-standard methods, and other reasonable factors? ✓ ☐ ☐ 11 2 Does the district have sufficient and available resources to cover all contracted obligations for capital facilities projects? ✓ ☐ ☐ 12 1 Is the district able to maintain the minimum reserve for economic uncertainties in the current year (including Fund 01 and Fund 17) as defined by the State Standards and Criteria for Fiscal Solvency? ✓ ☐ ☐ 12 2 Is the district able to maintain the minimum reserve for economic uncertainties in the two subsequent years? ☐ ✓ ☐ 12 3 If the district is not able to maintain the minimum reserve for economic uncertainties, does the district’s multiyear projection include a board-approved plan to restore the reserve? ✓ ☐ ☐ 19 1 Does the district account for all positions and costs (including substitutes, overtime, stipends, and employer-paid benefits) in position control? ☐ ✓ ☐ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 10 Fiscal Health Risk Analysis Score Breakdown by Section Because the score is not calculated by category, category values provided are subject to minor rounding and are provided for information only. 1. Annual Independent Audit Report 0.4% 2. Budget Development and Adoption 3.6% 3. Budget Monitoring and Updates 5.0% 4. Cash Management 1.0% 5. Charter Schools 0.3% 6. Collective Bargaining Agreements 4.2% 7. Contributions and Transfers 1.0% 8. Deficit Spending (Unrestricted General Fund) 3.0% 9. Employee Benefits 0.0% 10. Enrollment and Attendance 4.4% 11. Facilities 0.3% 12. Fund Balance and Reserve for Economic Uncertainty 2.0% 13. General Fund - Current Year 3.4% 14. Information Systems and Data Management 1.0% 15. Internal Controls and Fraud Prevention 3.4% 16. Leadership and Stability 3.8% 17. Multiyear Projections 2.0% 18. Non-Voter-Approved Debt and Risk Management 1.0% 19. Position Control 2.0% 20. Special Education 0.7% Score 42 6% Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 11 Fiscal Health Risk Analysis Fiscal Health Risk Analysis Questions 1. Annual Independent Audit Report Yes No N/A 1 1 Has the district recorded findings from the most recent and prior two years’ audits without negatively affecting its fiscal health? ✓ ☐ ☐ 1 2 Has the audit report for the most recent fiscal year been completed and presented to the board within the statutory timeline per Education Code (EC) 41020? ☐ ✓ ☐ The 2023-24 audit report was not presented to the governing board by the January 31, 2025 statutory deadline, as required by EC 41020. On December 13, 2024, the district requested that the State Controller’s Office extend the deadline to March 6, 2025. The district also failed to meet the statutory deadline for presenting its 2022-23 and 2021-22 audit reports to the board. 1 3 Were the district’s most recent and prior two audit reports free of findings of material weakness? ☐ ✓ ☐ The district’s 2021-22 audit report identified a material weakness in internal control over financial reporting, primarily due to material overstatements of investment balances of cash in county treasury within the district’s 2021-2022 unaudited actuals financial report. These misstatements occurred in the General Fund, Building Fund, Capital Facilities Fund, Bond Interest and Redemption Fund, Non- Major Governmental Funds, and the Internal Service Fund, because of the district’s omission of Governmental Accounting Standards Board (GASB) Statement No. 72 fair value measurement accounting entries. Additionally, the audit report noted: • Accounts receivable in the General Fund was understated by $1,409,296. • Cash in banks in Non-Major Governmental Funds was understated by $92,194. • Claims liability in the Internal Service Fund was understated by $387,743. 1 4 Has the district corrected all audit findings from the most recent and prior two audits? ☐ ✓ ☐ The 2022-23 audit report included a finding regarding the preapproval of capital expenditures using Elementary and Secondary School Emergency Relief (ESSER) II funds. Because the 2023-24 audit had not been completed at the time of FCMAT’s fieldwork, it is unknown whether this issue has been corrected. 2. Budget Development and Adoption Yes No N/A 2 1 Does the district develop and use written budget assumptions and multiyear projections that are reasonable, are aligned with the county superintendent of schools’ instructions, and have been clearly articulated? ☐ ✓ ☐ The district’s 2024-25 adopted budget did not include an assumption for step-and- column increases for certificated salaries in 2025-26, resulting in an understatement of salaries and benefits by approximately $2 million in both 2025-26 and 2026-27. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 12 Fiscal Health Risk Analysis 2 2 Does the district use a budget development method other than a prior-year rollover budget and if so, does that method include tasks such as reviewing prior year estimated actuals by major object code and removing one-time revenues and expenses? ✓ ☐ ☐ 2 3 Does the district use position control data for budget development? ✓ ☐ ☐ 2 4 Does the district calculate its Local Control Funding Formula (LCFF) revenue correctly? ✓ ☐ ☐ 2 5 Has the district’s budget been approved unconditionally by September 15th by the county superintendent of schools in the current and two prior fiscal years? ✓ ☐ ☐ 2 6 Does the budget development process include input from staff, administrators, the governing board, the community, and the budget advisory committee (if there is one)? ✓ ☐ ☐ 2 7 Does the district budget and expend restricted funds before unrestricted funds? ☐ ✓ ☐ The district does not consistently spend restricted funds before using unrestricted funds. Both the 2022-23 and 2023-24 unaudited actuals reports show a remaining balance in special education program funds (e.g., Assembly Bill [AB] 602 [Chapter 854, Statutes of 1997] funds, which are available for any special education expenditures), despite the district contributing unrestricted general funds to support the program. Additionally, the 2022-23 unaudited actuals report indicates that various resources have either grown or remained largely unspent. For example, the Learning Recovery Emergency Block Grant had an ending balance of $28.01 million in 2022-23, increasing slightly to $28.04 million in 2023-24. Overall, the district's unrestricted general fund balance increased from $58.33 million in 2022-23 to $71.11 million in 2023-24, while the restricted fund balance declined slightly from $78.93 million to $77.55 million during the same period. 2 8 Have the district’s Local Control and Accountability Plan (LCAP) and budget been adopted within the statutory timelines established by EC 42103 and filed with the county superintendent of schools no later than five days after adoption or by July 1, whichever occurs first, for the current and prior fiscal year? ✓ ☐ ☐ 2 9 Has the district refrained from including carryover funds in its adopted budget? ☐ ✓ ☐ The 2024-25 adopted budget includes materially higher revenue projections for certain title programs compared to 2023-24 allocations, indicating that the district incorporated carryover funds into its budget. For example, the 2024-25 adopted budget projects Title I revenues of $10.53 million, while the district's 2023-24 allocation was $9.23 million as of April 2024 — the most current data at the time of budget development. By December 2024, the district's 2024-25 Title I allocation totaled only $8.68 million. 2 10 Other than objects in the 5700s and 7300s, does the district avoid using negative expense or contra expenditure accounts in its budget? ☐ ✓ ☐ Negative amounts are budgeted in resource 0001, object 5500. According to district staff, this account is used to transfer expenditures to resource 1100. 2 11 Does the district have and follow a documented standard procedure for evaluating both the proposed acceptance of grants and other restricted funds and the potential multiyear impact on the district’s unrestricted general fund? ☐ ✓ ☐ The district’s Board Policy 3290 broadly addresses gifts, grants and bequests; however, it does not outline a clear procedure for staff to follow when evaluating the acceptance of grant funding. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 13 Fiscal Health Risk Analysis 2 12 Does the district adhere to a budget calendar that includes statutory due dates, major budget development tasks and deadlines, and the staff members and departments responsible for completing them? ☐ ✓ ☐ The district does not have a detailed budget calendar to effectively organize and guide its budget development process. The calendars provided to FCMAT lack clear tasks, the staff responsible for completing them, and corresponding deadlines. 3. Budget Monitoring and Updates Yes No N/A 3 1 Are actual revenues and expenses consistent with the most current budget? ☐ ✓ ☐ FCMAT compared the district's 2024-25 adopted budget with the 2024-25 first interim financial report projected year totals and identified numerous accounts where projected totals differ from the adopted budget by more than 5%. Table 1 shows these accounts and variances. Table 1. Comparison of 2024-25 Adopted Budget and First Interim Projected Year Totals 2024-25 Projected Unrestricted General Fund Adopted Budget Year Totals Variance % Change Other State Revenue $47,531,706 $53,773,839 $6,242,133 13.1% Certificated Salaries $56,410,552 $50,313,981 -$6,096,571 10.8% Employee Benefits $53,449,590 $49,089,257 -$4,360,333 8.2% Books and Supplies $16,593,402 $11,936,809 -$4,656,593 28.1% Services & Other Operating $35,780,126 $32,879,215 -$2,900,911 8.1% Sources: District’s 2024-25 first interim report and 2024-25 adopted budget. 3 2 Are budget revisions posted in the financial system at each interim reporting period, at a minimum? ✓ ☐ ☐ 3 3 Are clearly written and articulated budget assumptions that support budget revisions communicated to the board at each interim reporting period, at a minimum? ☐ ✓ ☐ The district’s 2024-25 first interim report includes budget solutions totaling $45.7 million for 2025-26 and $3.5 million for 2026-27; however, the report does not provide details on these solutions, nor were they communicated during the first interim report presentation to the board. Additionally, the district’s projected funded average daily attendance (ADA) for 2024-25 was reported as 14,966.95 during the 2024-25 first interim presentation to the board, but this figure conflicts with Section 1A – Calculating the District’s ADA Variances of the Standardized Account Code Structure (SACS) Criteria and Standards Review form, where the ADA is shown as 14,371. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 14 Fiscal Health Risk Analysis 3 4 Following board approval of collective bargaining agreements, does the district make necessary budget revisions in the financial system to reflect settlement costs in accordance with EC 42142? ☐ ✓ ☐ Education Code 42142 requires that within 45 days of adopting a collective bargaining agreement, the district superintendent must submit necessary budget revisions to the county superintendent to ensure the agreement’s financial impact is accurately reflected in the current fiscal year. However, following the board’s approval of the collective bargaining agreements on January 18, 2024 and February 1, 2024, the district did not enter the budget revisions into Galaxy, the financial system hosted by the county office, within the mandated time frame. As a result, the district materially understated salary and benefit costs in its 2023-24 estimated actuals. This omission negatively impacted the beginning and ending fund balances for 2024-25 and skewed multiyear projections for 2025-26 and 2026-27. 3 5 Do the district’s responses fully explain the variances identified in the SACS Criteria and Standards Review form? ☐ ✓ ☐ The 2024-25 adopted budget projects a current-year funded ADA of 13,953, as stated in Section 1A – Calculating the District's ADA Variances of the Criteria and Standards Review form. However, the 2024-25 first interim report increased this projection to 14,371. The district attributed this increase to declining enrollment, which is not a reasonable explanation. Similarly, the 2024-25 adopted budget projects current-year enrollment of 15,647, as noted in Section 2A – Calculating the District's Enrollment Variances of the Criteria and Standards Review form. The 2024-25 first interim report increased this projection to 15,822, yet the district again attributed this increase to declining enrollment, which is not reasonable. Additionally, the 2024-25 first interim report explanation in the Criteria and Standards Review form, Section 10C – Calculating the District's Available Reserve Amount does not adequately explain the decline in reserves. The district attributed the reduction solely to declining enrollment and ADA, without acknowledging its large structural deficit, which is a key factor contributing to the diminishing reserves. 3 6 Has the district addressed any deficiencies the county superintendent of schools has identified in its oversight letters to the district in the most recent and two prior fiscal years? ☐ ✓ ☐ The Riverside County Superintendent of Schools stated that: Our oversight letters continue to raise concerns and highlight the following items in the most recent and two prior fiscal years: • Unrestricted Deficit Spending • Use of One-Time Resources for Ongoing Expenditures • Failure to incorporate collective bargaining agreements into MYPs • Disconnect with Position Control and Lack of Internal Controls • Details on Incorporated Reductions • Request for Board-Approved Stabilization Plan. 3 7 Does the district prohibit processing of requisitions or purchase orders when the budget is insufficient to support the expenditure? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 15 Fiscal Health Risk Analysis 3 8 Does the district encumber funds for salaries and benefits and adjust those encumbrances as needed? ✓ ☐ ☐ 3 9 For the most recent and two prior fiscal years, have the district’s interim financial reports and unaudited actuals been adopted and filed with the county superintendent of schools within the timelines established in Education Code? ✓ ☐ ☐ 4. Cash Management Yes No N/A 4 1 Are accounts held by the county treasurer reconciled with the district’s and county office of education’s (COE) reports monthly? ✓ ☐ ☐ 4 2 Does the district reconcile all bank (cash and cash equivalent) accounts with each statement in a timely manner? ☐ ✓ ☐ Interviews with staff indicated that the district is several months behind in reconciling its bank accounts (cash and cash equivalents). Additionally, the documents provided by the district did not sufficiently show ongoing reconciliation activity. 4 3 Does the district forecast its general fund cash flow for the current and subsequent year and update it as needed to ensure cash flow needs are known? ✓ ☐ ☐ 4 4 If the district’s cash flow forecast shows insufficient cash in its general fund to support its current and projected obligations, does the district have a reasonable plan to meet its cash flow needs for the current and subsequent year? ☐ ☐ ✓ 4 5 Does the district have sufficient cash resources in its other funds to support its current and projected obligations in those funds? ✓ ☐ ☐ 4 6 If the district uses interfund borrowing, is it complying with EC 42603? ☐ ☐ ✓ 4 7 If the district is managing cash in any fund(s) through external borrowing, does the district’s cash flow projection include repayment based on the terms of the loan agreement? ☐ ☐ ✓ 5. Charter Schools Yes No N/A 5 1 Does the district have a board policy, memorandum of understanding (MOU), or other written document(s) regarding charter oversight? ✓ ☐ ☐ 5 2 Has the district fulfilled, and does it have evidence showing fulfillment of, its oversight responsibilities in accordance with EC 47604 32? ☐ ✓ ☐ Education Code 47604.32 states, in part: (a) Each chartering authority, in addition to any other duties imposed by this part, shall do all of the following with respect to each charter school under its authority: (1) Identify at least one staff member as a contact person for the charter school. (2) Visit each charter school at least annually. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 16 Fiscal Health Risk Analysis (3) Ensure that each charter school under its authority complies with all reports required of charter schools by law, including the local control and accountability plan and annual update to the local control and accountability plan required pursuant to Section 47606.5. (4) Monitor the fiscal condition of each charter school under its au- thority. (5) Provide timely notification to the department if any of the follow- ing circumstances occur or will occur with regard to a charter school for which it is the chartering authority: (A) A renewal of the charter is granted or denied. (B) The charter is revoked. (C) The charter school will cease operation for any reason. Interviews with staff, along with a lack of documentation, indicate that the district has not fulfilled its oversight responsibilities as required by EC 47604.32. 5 3 Are all charters authorized by the district going concerns and not in fiscal distress? ✓ ☐ ☐ 5 4 Has the district identified specific employees in its various departments (e g , human resources, business, instructional, and others) to be responsible for oversight of all approved charter schools? ☐ ✓ ☐ Interviews with staff indicate that the district has not designated specific employees within its departments to oversee all approved charter schools. 5 5 Does the district monitor charter school audits for timeliness, completeness, and exceptions? ☐ ✓ ☐ The district provided FCMAT with charter school audit reports; however, it did not provide evidence of oversight monitoring activities or processes related to charter school audits. 6. Collective Bargaining Agreements Yes No N/A 6 1 Has the district settled with all its bargaining units for the past two fiscal years? ✓ ☐ ☐ 6 2 Has the district settled with all its bargaining units for the current year? ☐ ✓ ☐ The district has not settled with any of its bargaining units for the current year. 6 3 Does the district accurately quantify the effects of collective bargaining agreements and include complete disclosure documents that show the impact on its budget and multiyear projections? ☐ ✓ ☐ The district completed public disclosure documents for its certificated and classified bargaining units, quantifying total compensation increases of $10.44 million and $5.27 million, respectively, in the 2023-24 fiscal year. District staff also reported salary increases for confidential and management employees, including 9% plus a $2,500 off-schedule payment in 2022-23 and a 7% increase in 2023-24. However, because no public disclosure was completed for these employee groups, the total cost of these increases was not calculated. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 17 Fiscal Health Risk Analysis 6 4 Based on the presettlement analysis, did the district identify related costs or savings, and did it identify ongoing revenue sources or expenditure reductions to support the agreement in the current and subsequent years? ☐ ✓ ☐ The district did not provide evidence of a presettlement analysis. 6 5 In the current and prior two fiscal years, has the total cost of the district’s bargaining agreement settlements, including step-and-column increases, been at or under the funded cost-of-living adjustment (COLA)? ☐ ✓ ☐ While the 2023-24 settlements for certificated and classified employee groups were below the funded COLA, the settlements in 2022-23 exceeded it. Similarly, the 2023- 24 salary adjustments for confidential/management staff were lower than the funded COLA, whereas the 2022-23 increase surpassed it. Table 2 below compares the funded COLA with the settlement increases for certificated and classified bargaining units and salary adjustments for confidential/ management staff. Table 2. Funded COLA and Settlement Percentages, 2022-23 – 2024-25 Certificated Classified Confidential/ Fiscal Year Funded COLA Settlement Settlement Management 2022-23 6.56% 11.00% 15.00% 9.00% 2023-24 8.22% 7.44% 7.44% 7.00% 2024-25 1.07% Sources: District staff and the public disclosures for certificated and classified bargaining units. Note: As of this report, the district had not settled with its certificated or classified bargaining units for 2024-25 or finalized salary adjustments for confidential/ management staff. 6 6 If settlements have not been reached in the past two years, has the district identified resources to cover the costs of the district’s proposal(s)? ☐ ☐ ✓ 6 7 Did the district comply with public disclosure requirements under Government Codes 3540 2 and 3547 5, and EC 42142? ✓ ☐ ☐ 6 8 Did the superintendent and CBO certify the public disclosure of collective bargaining agreement before board approval? ☐ ✓ ☐ Although the superintendent and CBO signed the public disclosure documents certifying the that the district could afford the agreements with classified and certificated staff, the disclosures were not presented to the board before the board took action to approve the agreements. The public disclosure of collective bargaining for the classified bargaining unit for 2023-24 was presented to the board on February 15, 2024, after the board approved the tentative agreement on February 1, 2024. Similarly, the board approved the tentative agreement for the certificated bargaining unit on January 18, 2024, but its public disclosure was not presented until February 15, 2024. 6 9 Is the governing board’s action consistent with the superintendent’s and CBO’s certification? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 18 Fiscal Health Risk Analysis 7. Contributions and Transfers Yes No N/A 7 1 Does the district have an active, board-approved plan to eliminate, reduce or control any contributions/transfers from its unrestricted general fund to other restricted programs and funds? ☐ ✓ ☐ The district lacks a board-approved plan to eliminate, reduce or control contributions and transfers from its unrestricted general fund to restricted programs. According to the 2024-25 first interim report, the district has budgeted $54,232,765 in contributions as follows: • Governor’s Career Technical Education Initiative: $647,269. • Special education: $40,913,811. • California Partnership Academies Program: $561,068. • Routine restricted maintenance: $12,110,617. 7 2 If the district has deficit spending in funds other than the general fund, has it included in its multiyear projection sufficient transfers from the unrestricted general fund to cover any projected negative fund balance? ☐ ☐ ✓ 7 3 If any contributions or transfers were required for restricted programs and/or other funds in either of the two prior fiscal years, and there is a need in the current year, did the district budget for them at reasonable levels? ✓ ☐ ☐ 8. Deficit Spending (Unrestricted General Fund) Yes No N/A 8 1 Is the district avoiding deficit spending in the current fiscal year? ☐ ✓ ☐ The 2024-25 first interim report projected deficit spending of $11.91 million in the unrestricted general fund. 8 2 Is the district projected to avoid deficit spending in both of the two subsequent fiscal years? ☐ ✓ ☐ The 2024-25 first interim multiyear financial projection shows an unrestricted general fund deficit of $18.9 million in 2025-26 and $29.3 million in 2026-27. 8 3 If the district has deficit spending in the current or two subsequent fiscal years, has the board approved and implemented a plan to reduce and/or eliminate deficit spending to ensure fiscal solvency? ☐ ✓ ☐ As of February 6, 2025, the board has approved a fiscal stabilization plan; however, the budget solutions totaling $49.2 million outlined in the plan have not yet been implemented. These solutions are expected to take effect in the 2025-26 and 2026- 27 fiscal years and are included in the district’s multiyear projection. 8 4 Has the district decreased deficit spending over the past two fiscal years and is there evidence of this in its unaudited actuals reports? ☐ ☐ ✓ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 19 Fiscal Health Risk Analysis 9. Employee Benefits Yes No N/A 9 1 Has the district completed an actuarial valuation in accordance with Governmental Accounting Standards Board requirements to determine its unfunded liability for other post-employment benefits (OPEB)? ✓ ☐ ☐ 9 2 Does the district have a plan to fund its OPEB liabilities for the current and two subsequent years such that the total of annual required service payments (whether legally or contractually required, or locally defined such as pay-as-you-go premiums, trust agreement obligations or a board adopted commitment) are no greater than 2% of the district’s unrestricted general fund revenues? ✓ ☐ ☐ 9 3 Within the last five years, has the district conducted a verification and determination of eligibility for benefits for all active and retired employees and dependents? ✓ ☐ ☐ 9 4 Does the district track, reconcile and report employees’ compensated leave balances? ✓ ☐ ☐ 9 5 Has the district followed a policy or collectively bargained agreement to limit accrued vacation balances? ✓ ☐ ☐ 10. Enrollment and Attendance Yes No N/A 10 1 Has the district’s enrollment been increasing or remained stable for the current and two prior years? ☐ ✓ ☐ The district’s enrollment has declined in the current and two prior years, with a total decrease of 1,839 students since 2019-20, as shown in Figure 1 below. District’s NonCharter School Enrollment, 2019-20 – 2024-25 District’s NonCharter School Enrollment, 2019-20 – 2024-25 20,000 17,657 18,000 15,818 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Figure 1. A line graph showing that the district’s noncharter school enrollment has decreased by 1,839 students, from 17,657 in 2019-20 to an estimated 15,818 in 2024- 25. Sources: Adapted from EdData. Note: 2024-25 enrollment is an estimate as of December 2024. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 20 Figure 1. A line graph showing that the district’s noncharter school enrollment has decreased by 1,839 students, from 17,657 in 2019-20 to an estimated 15,818 in 2024-25. SSoouurrcceess:: Adapted from EdData. NNoottee:: 2024-25 enrollment is an estimate as of December 2024. 10.2 Does the district monitor and analyze enrollment and average daily attendance (ADA) data at least monthly through the second attendance reporting period (P-2)? ✓ ☐ ☐ 10.3 Does the district track historical enrollment and ADA data to project future trends? ✓ ☐ ☐ 10.4 Do schools maintain an accurate record of daily enrollment and attendance that is reconciled monthly at the school and district levels? ✓ ☐ ☐ 10.5 Are the district’s enrollment projections and assumptions based on historical data, industry-standard methods, and other reasonable factors? ✓ ☐ ☐ 10.6 Has the district planned for enrollment losses to any charter schools? ☐ ✓ ☐ The district does not plan for enrollment losses to charter schools. 10.7 Do all applicable schools and departments review and verify their respective California Longitudinal Pupil Achievement Data System (CALPADS) data and correct it as needed before the report submission deadlines? ☐ ✓ ☐ Staff described processes in which schools and departments review and verify their respective CALPADS data before the submission deadline. However, despite these procedures, the district submitted the 2024-25 Fall 1 data and later requested to have it reopened for corrections. stnedutS fo rebmuN NonCharter School Students School Year Fiscal Health Risk Analysis 10 2 Does the district monitor and analyze enrollment and average daily attendance (ADA) data at least monthly through the second attendance reporting period (P-2)? ✓ ☐ ☐ 10 3 Does the district track historical enrollment and ADA data to project future trends? ✓ ☐ ☐ 10 4 Do schools maintain an accurate record of daily enrollment and attendance that is reconciled monthly at the school and district levels? ✓ ☐ ☐ 10 5 Are the district’s enrollment projections and assumptions based on historical data, industry-standard methods, and other reasonable factors? ✓ ☐ ☐ 10 6 Has the district planned for enrollment losses to any charter schools? ☐ ✓ ☐ The district does not plan for enrollment losses to charter schools. 10 7 Do all applicable schools and departments review and verify their respective California Longitudinal Pupil Achievement Data System (CALPADS) data and correct it as needed before the report submission deadlines? ☐ ✓ ☐ Staff described processes in which schools and departments review and verify their respective CALPADS data before the submission deadline. However, despite these procedures, the district submitted the 2024-25 Fall 1 data and later requested to have it reopened for corrections. 10 8 Has the district certified its CALPADS data (most recent Fall 1, Fall 2, and end-of-year reports) by the required deadlines? ☐ ✓ ☐ The district certified its CALPADS data by the required deadlines; however, it has requested to reopen its 2024-25 Fall 1 submission to make corrections. 10 9 Does the district follow established board policy to limit outgoing interdistrict transfers and ensure that only students who meet the required qualifications are approved? ☐ ✓ ☐ The district did not provide documentation showing that it follows board policy to limit outgoing interdistrict transfers and ensure that only students who meet the required qualifications are approved. 10 10 Does the district adhere to the average TK-3 class enrollment limits at each school, the adult-to-student ratio for each TK class, and the credentialing requirements for teachers assigned to TK classes as defined in the Education Code? ☐ ✓ ☐ While the district’s most recent annual independent audits do not note any class size penalties, the district did not provide documentation confirming compliance with adult-to-student ratios for each TK class or the credentialing requirements for TK teachers, as defined in the Education Code. 11. Facilities Yes No N/A 11 1 If the district participates in the state’s School Facility Program, has it made the required contribution to its Routine Restricted Maintenance Account? ✓ ☐ ☐ 11 2 Does the district have sufficient and available resources to cover all contracted obligations for capital facilities projects? ✓ ☐ ☐ 11 3 Does the district properly track and account for facility-related projects? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 21 Fiscal Health Risk Analysis 11 4 Does the district use its facilities fully (districtwide) in accordance with the Office of Public School Construction’s loading standards? ☐ ✓ ☐ The district’s enrollment has declined over the past five years, and according to the school capacity analysis included in its 2019 facilities master plan, the average facility utilization rate is 64%. 11 5 Does the district include facility needs (maintenance, repair, and operating requirements) when adopting a budget? ✓ ☐ ☐ 11 6 Has the district met the facilities inspection requirements of the Williams Act and resolved any outstanding issues? ✓ ☐ ☐ 11 7 If the district passed a Proposition 39 general obligation bond, has it met the requirements for audit, reporting, and a citizens’ bond oversight committee? ☐ ✓ ☐ Measure X, a Proposition 39 bond, was passed in 2012. When a bond measure is approved, the school district’s board must “establish and appoint members to an independent citizens' oversight committee” per EC 15278(a). The composition of the committee is outlined in EC 15282, which states, in part: (a) The citizens’ oversight committee shall consist of at least seven mem- bers who shall serve for a minimum term of two years without compen- sation and for no more than three consecutive terms. … The citizens’ oversight committee shall be comprised, as follows: (1) One member shall be active in a business organization represent- ing the business community located within the school district or community college district. (2) One member shall be active in a senior citizens’ organization. (3) One member shall be active in a bona fide taxpayers’ organization. (4) For a school district, one member shall be the parent or guardian of a child enrolled in the school district. … (5) For a school district, one member shall be both a parent or guardian of a child enrolled in the school district and active in a parent-teacher organization, such as the Parent Teacher Associa- tion or schoolsite council. … (b) An employee or official of the school district or community college dis- trict shall not be appointed to the citizens’ oversight committee. A ven- dor, contractor, or consultant of the school district or community college district shall not be appointed to the citizens’ oversight committee. … The district has a facilities committee; however, it does not meet the required makeup of members outlined in EC 15282 and appears to function as an advisory committee that includes employees and trustees rather than an independent oversight body. Furthermore, the district has not conducted an independent financial and performance audit of the bond in at least the past three years. 11 8 Does the district have a board-approved long-range facilities master plan completed within the last five years that reflects its current and projected facility needs? ☐ ✓ ☐ While district staff indicated they are working to update the long-range facilities master plan, the current plan dates back to 2019, making it more than five years old. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 22 Fiscal Health Risk Analysis 12. Fund Balance and Reserve for Economic Uncertainties Yes No N/A 12 1 Is the district able to maintain the minimum reserve for economic uncertainties in the current year (including Fund 01 and Fund 17) as defined by the State Standards and Criteria for Fiscal Solvency? ✓ ☐ ☐ 12 2 Is the district able to maintain the minimum reserve for economic uncertainties in the two subsequent years? ☐ ✓ ☐ The district’s multiyear projection includes expenditure reductions from its fiscal stabilization plan to maintain the minimum reserve in the two subsequent years. However, these reductions have not been implemented, and there is no guarantee they will be enacted. 12 3 If the district is not able to maintain the minimum reserve for economic uncertainties, does the district’s multiyear projection include a board-approved plan to restore the reserve? ✓ ☐ ☐ 12 4 Is the district’s projected unrestricted fund balance stable or increasing in the two subsequent fiscal years without unsubstantiated revenue increases or expenditure reductions? ☐ ✓ ☐ In its annual report on district solvency, dated July 9, 2024, the Riverside County Superintendent of Schools stated that “the Third Interim multi-year projections indicated total unrestricted fund balances will decline by 63.95 percent over the next three years.” 12 5 If the district has unfunded or contingent liabilities or one-time costs other than post-employment benefits, does the unrestricted general fund balance include sufficient assigned or committed reserves above the recommended reserve level to cover these costs? ☐ ☐ ✓ 13. General Fund – Current Year Yes No N/A 13 1 Does the district ensure that one-time revenues do not pay for ongoing expenditures? ☐ ✓ ☐ The district is using one-time funding to support ongoing expenditures in the 2024- 25 fiscal year. 13 2 Is the percentage of the district’s general fund unrestricted expenditure budget that is allocated to salaries and benefits at or below the prior year statewide average? ☐ ✓ ☐ As of the 2024-25 first interim report, 89.4% of the district’s general fund unrestricted expenditure budget is allocated to salaries and benefits, exceeding the statewide average of 86.0% as of 2022-23 (the most recent data available). 13 3 Is the percentage of the district’s general fund unrestricted expenditure budget that is allocated to salaries and benefits at or below that of the prior two years? ☐ ✓ ☐ As of the 2024-25 first interim report, 89.4% of the district’s general fund unrestricted expenditure budget is allocated to salaries and benefits. In 2022-23 and 2023-24, the percentages were 88.1% and 94.1%, respectively. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 23 Fiscal Health Risk Analysis 13 4 If the district has received any uniform complaints or legal challenges regarding local use of supplemental and concentration grant funding in the current or prior two years, is the district addressing the complaint(s)? ☐ ☐ ✓ 13 5 For positions supported with one-time or restricted funding, does the district either ensure that these funds are sufficient to pay for these staff or have a plan to pay for the positions with unrestricted funds? ✓ ☐ ☐ 13 6 Is the district using its restricted dollars fully by expending allocations for restricted programs within the required time? ☐ ✓ ☐ In 2021-22, the district received a $200,000 California Community Schools Partnership Program planning grant. However, the funds were not spent within the required time frame, requiring the district to return $197,532 to the state in 2023-24. 13 7 Does the district account for all program costs, including the maximum allowable indirect costs, for each restricted resource and other funds? ☐ ✓ ☐ The 2021-22, 2022-23, and 2023-24 unaudited actuals reports indicate that while the district charges the maximum allowable indirect cost rate to most restricted programs, it does not charge indirect costs to its special education program. Additionally, in 2023-24, indirect costs were not charged to Fund 11 (Adult Education). 13 8 Are all balance sheet accounts in the general ledger reconciled at least at each interim reporting period and at year-end close? ✓ ☐ ☐ 14. Information Systems and Data Management Yes No N/A 14 1 Does the district use an integrated financial and human resources system? ✓ ☐ ☐ 14 2 Does the district use the system(s) to provide key financial and related data, including personnel information, to help the district make informed decisions? ✓ ☐ ☐ 14 3 Has the district accurately identified students who are eligible for free or reduced-price meals, English learners, and foster youth, in accordance with the LCFF and its LCAP? ☐ ✓ ☐ The district has requested to reopen its 2024-25 CALPADS Fall 1 submission to correct student eligibility data for free or reduced-priced meals. 14 4 Is the district using the same financial system as its COE? ✓ ☐ ☐ 14 5 If the district is using a separate financial system from its COE, is there an automated interface that allows data to be sent and received by both the district’s and COE’s financial systems? ☐ ☐ ✓ 14 6 If the district is using a separate financial system from its COE, has the district provided the COE with direct access so the COE can provide oversight, review and assistance? ☐ ☐ ✓ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 24 Fiscal Health Risk Analysis 15. Internal Controls and Fraud Prevention Yes No N/A 15 1 Does the district have controls that limit access to its financial system and include multiple levels of authorization? ☐ ✓ ☐ While the district limits access to its financial system, Galaxy, by job duties, the district has only set up one level of authorization. 15 2 Are the district’s financial system’s access and authorization controls reviewed and updated upon employment actions (e g , resignations, terminations, promotions, or demotions) and at least annually? ✓ ☐ ☐ 15 3 Does the district ensure that duties in the following areas are segregated, and that they are supervised and monitored?: • Accounts payable (AP) ✓ ☐ ☐ • Accounts receivable (AR) ✓ ☐ ☐ • Purchasing and contracts ✓ ☐ ☐ • Payroll ✓ ☐ ☐ • Human resources (i e , duties related to position control and payroll processes) ☐ ✓ ☐ The district’s processes allow the Business Department to add new employees, create new positions, and attach positions to employees. Additionally, a single position — the budget analyst — has the authority to perform all three tasks, which is a serious weakness in the district’s internal control system. 15 4 Are beginning balances for the new fiscal year posted and reconciled with the ending balances for each fund from the prior fiscal year? ✓ ☐ ☐ 15 5 Does the district review and work to clear prior year accruals throughout the year? ✓ ☐ ☐ 15 6 Has the district reconciled and closed the general ledger (books) within the time prescribed by the county superintendent of schools? ✓ ☐ ☐ 15 7 Does the district have processes and procedures to discourage and detect fraud? ☐ ✓ ☐ While some employees provided detailed descriptions of internal audit activities, the district does not have specific processes and procedures to discourage or detect fraud. 15 8 Does the district have a process for collecting reports of possible fraud (such as an anonymous fraud reporting hotline) and for following up on such reports? ☐ ✓ ☐ The district lacks a process for collecting reports of possible fraud and for following up on such reports. 15 9 Does the district have an internal audit process? ☐ ✓ ☐ While some employees provided detailed descriptions of internal audit activities, the district lacks a documented, comprehensive internal audit process. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 25 Fiscal Health Risk Analysis 16. Leadership and Stability Yes No N/A 16 1 Does the district have a chief business official who has been in this position with the district for more than two years? ☐ ✓ ☐ At the time of this report, the district had an interim chief business official and was actively recruiting to fill the position permanently. 16 2 Does the district have a superintendent who has been in this position with the district for more than two years? ☐ ✓ ☐ The board hired the superintendent on July 2, 2024. 16 3 Does the superintendent schedule and hold meetings regularly with all members of their administrative cabinet? ✓ ☐ ☐ 16 4 Is training on financial management and budget provided to school and department administrators who are responsible for budget management? ✓ ☐ ☐ 16 5 Does the governing board adopt and revise policies and administrative regulations annually? ☐ ✓ ☐ Interviews with staff and FCMAT’s review of the board policy manual indicate that policies and administrative regulations are not regularly updated to reflect changes in law or align with the district’s vision and goals. The district has a policy committee, consisting of district staff and labor partners, that reviews, provides input on, and approves proposed policy adoptions and updates before they are submitted to the board for approval. While staff described this process as collaborative, they also noted that it is time-consuming, resulting in few policies being adopted or updated in recent years. 16 6 Are newly adopted or revised policies and administrative regulations implemented, communicated, and available to staff? ☐ ✓ ☐ The district lacks a formal process for communicating newly adopted or revised policies and administrative regulations to staff. As a result, staff reported that they must independently review the board agenda to determine whether policies or administrative regulations will be updated. 16 7 Do all board members attend training on the budget and governance at least every two years? ☐ ✓ ☐ The board lacks a cohesive approach to training. Further, board members do not consistently attend the budget and governance trainings available to them. 16 8 Is the superintendent’s evaluation performed according to the terms of the contract? ☐ ☐ ✓ 16 9 Is the district avoiding relying on consultants to prepare financial reports (e g SACS) or other primary fiscal activities? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 26 Fiscal Health Risk Analysis 17. Multiyear Projections Yes No N/A 17 1 Has the district developed multiyear projections that include detailed assumptions aligned with industry standards? ☐ ✓ ☐ While the district’s assumptions generally align with industry standards, as noted in Item 2.1 of this report, the district’s 2024-25 adopted budget multiyear projection for 2025-26 does not include an assumption for step-and-column increases, resulting in a material understatement of projected salaries and benefits expenditures for the 2025-26 and 2026-27 fiscal years. 17 2 To help calculate its multiyear projections, did the district prepare an accurate LCFF calculation that includes multiyear considerations? ✓ ☐ ☐ 17 3 Does the district use its most current multiyear projection when making financial decisions? ✓ ☐ ☐ 17 4 If the district uses a broad adjustment category in its multiyear projection (such as line B10, B1d, B2d Other Adjustments, in the SACS Form MYP/MYPI), is there a detailed list of what is included in the adjustment amount and are the adjustments reasonable? ☐ ✓ ☐ The district’s 2024-25 first interim report includes planned, summarized budget solutions totaling $45.7 million for 2025-26 and $3.5 million for 2026-27. However, these solutions lack detail and clarity, are subject to collective bargaining negotiations, and had not been board-approved or implemented as of the time of this report. 18. Non-Voter-Approved Debt and Risk Management Yes No N/A 18 1 Are the sources of repayment for non-voter-approved debt {such as certificates of participation (COPs), bridge financing, bond anticipation notes (BANS), revenue anticipation notes (RANS) and others} stable, predictable, and other than the unrestricted general fund? ✓ ☐ ☐ 18 2 If the district has issued non-voter-approved debt, has its credit rating remained stable or improved during the current and two prior fiscal years? ✓ ☐ ☐ 18 3 If the district is self-insured, has it completed an actuarial valuation as required and does it have a plan to pay for any unfunded liabilities? ☐ ✓ ☐ The district is self-insured for employee dental and vision benefits; however no evidence of an actuarial study was provided to FCMAT. 18 4 If the district has non-voter-approved debt (such as COPs, bridge financing, BANS, RANS and others), is the total of annual debt service payments no greater than 2% of the district’s unrestricted general fund revenues? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 27 Fiscal Health Risk Analysis 19. Position Control Yes No N/A 19 1 Does the district account for all positions and costs (including substitutes, overtime, stipends, and employer-paid benefits) in position control? ☐ ✓ ☐ The district uses the position control module in the Galaxy financial system to account for salaries and benefits. However, costs for items such as extra duty, stipends, substitutes and vacation payouts are tracked separately and entered into the budget manually. Additionally, the Human Resources and Fiscal Services departments use separate tracking methods for positions and lack a formal process to reconcile any discrepancies. 19 2 Does the district analyze and adjust staffing based on staffing ratios and enrollment? ☐ ✓ ☐ The district uses staffing ratios to adjust certificated staffing in accordance with the certificated collective bargaining agreement but has not adopted staffing ratios for classified positions. 19 3 Does the district reconcile budget, payroll and position control regularly, at least at budget adoption and interim financial reporting periods? ✓ ☐ ☐ 19 4 Does the district identify a budget source for each new position before the position is authorized by the governing board? ✓ ☐ ☐ 19 5 Does the governing board approve all new positions and extra assignments (e g , stipends) before positions are posted? ✓ ☐ ☐ 19 6 Do managers and staff responsible for the district’s human resources, payroll and budget functions meet at least monthly to discuss issues and improve processes? ✓ ☐ ☐ 20. Special Education Yes No N/A 20 1 For special education classrooms and support services, does the district use staffing ratios that align with statutory requirements and industry standards, and are students’ support needs also considered? If so, are those needs documented and evaluated at each budget cycle? ✓ ☐ ☐ 20 2 Does the district access all available funding sources for costs related to special education (e g , state excess cost pool, legal fees, mental health)? ✓ ☐ ☐ 20 3 Does the district use appropriate tools to help it make informed decisions about whether to add services (e g , special circumstance instructional assistance process and form, transportation decision tree)? ☐ ✓ ☐ Interviews with staff indicate that the district lacks specific tools to support informed decision-making when considering the addition of services. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 28 Fiscal Health Risk Analysis 20 4 Does the district budget and account correctly for all costs related to special education (e g , transportation, due process hearings, indirect costs, nonpublic schools and/or nonpublic agencies)? ☐ ✓ ☐ The district does not charge indirect costs to all of its special education programs. This results in an understatement of the true cost of these programs. 20 5 Does the district monitor contributions from the unrestricted general fund and adjust to trends in the special education program? ✓ ☐ ☐ 20 6 Is the district’s rate of identification of students as eligible for special education at or below the countywide and statewide average rates? ✓ ☐ ☐ 20 7 Does the district analyze whether it will meet the maintenance of effort requirement at each interim financial reporting period? ✓ ☐ ☐ Risk Score, 20 numbered sections only: 42 6% Key to Risk Score from 20 numbered sections only: High Risk: 40% or more Moderate Risk: 25-39.9% Low Risk: 24.9% and lower District Fiscal Solvency Risk Level, all FHRA factors: High (The existence of any condition from the “Budget and Fiscal Status” section, and/or a material weakness, will supersede the score above because it elevates the district’s risk level.) Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 29 Appendix Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results Appendix B – Study Agreement Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results Appendix A – Comparison of 2019 and 2025 FHRA Results Appendix A presents a comparative analysis of the 2019 and 2025 Fiscal Health Risk Analysis (FHRA) results to identify changes in the district’s fiscal health indicators. This comparison highlights shifts in responses, focusing on areas of improvement and emerging risks. Items present in the 2019 FHRA but absent from the 2025 FHRA are excluded from this analysis. For scor- ing purposes, “N/A” is treated as “Yes.” Additionally, shading is used to indicate changes in the district’s “No” responses between the two assessment years, providing a clear visual reference for areas of fiscal concern or progress. This appendix serves as a valuable tool for evaluating the district’s financial management practices and identifying key areas that require continued oversight and improvement. 1 Annual Independent Audit Report 2019 2025 1 1 Has the district recorded findings from the most recent and prior two years’ audits No Yes without negatively affecting its fiscal health? 1 2 Has the audit report for the most recent fiscal year been completed and presented to Yes No the governing board within the statutory timeline per Education Code (EC) 41020? 1 3 Were the district's most recent and prior two audit reports free of findings of material No No weakness? 1 4 Has the district corrected all audit findings from the most recent and prior two Yes No audits? 1 Annual Independent Audit Report Answer 2019 2025 Change in Number of “No” Responses Yes 2 1 No 2 3 Increased by 1 N/A 0 0 2 Budget Development and Adoption 2019 2025 2 1 Does the district develop and use written budget assumptions and multiyear No No projections that are reasonable, are aligned with the county superintendent of schools' instructions, and have been clearly articulated? 2 2 Does the district use a budget development method other than a prior-year rollover Yes Yes budget, and if so, does that method include tasks such as reviewing prior year estimated actuals by major object code and removing one-time revenues and expenses? 2 3 Does the district use position control data for budget development? Yes Yes 2 4 Does the district calculate its Local Control Funding Formula (LCFF) revenue Yes Yes correctly? 2 5 Has the district’s budget been approved unconditionally by September 15th by the No Yes county superintendent of schools in the current and prior two fiscal years? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 31 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 2 Budget Development and Adoption 2019 2025 2 6 Does the budget development process include input from staff, administrators, the Yes Yes governing board, the community, and the budget advisory committee (if there is one)? 2 7 Does the district budget and expend restricted funds before unrestricted funds? No No 2 8 Have the district's Local Control and Accountability Plan (LCAP) and budget been Yes Yes adopted within the statutory timelines established by EC 42103 and filed with the county superintendent of schools no later than five days after adoption or by July 1, whichever occurs first, for the current and prior fiscal year? 2 9 Has the district refrained from including carryover funds in its adopted budget? Yes No 2 10 Other than objects in the 5700s and 7300s, does the district avoid using negative No No expense or contra expenditure accounts in its budget? 2 11 Does the district have and follow a documented standard procedure for evaluating No No both the proposed acceptance of grants and other restricted funds and the potential multiyear impact on the district’s unrestricted general fund? 2 12 Does the district adhere to a budget calendar that includes statutory due dates, Yes No major budget development tasks and deadlines, and the staff members and departments responsible for completing them? 2 Budget Development and Adoption Answer 2019 2025 Change in Number of “No” Responses Yes 7 6 No 5 6 Increased by 1 N/A 0 0 3 Budget Monitoring and Updates 2019 2025 3 1 Are actual revenues and expenses consistent with the most current budget? No No 3 2 Are budget revisions posted in the financial system at each interim reporting period, Yes Yes at a minimum? 3 3 Are clearly written and articulated budget assumptions that support budget No No revisions communicated to the governing board at each interim reporting period, at a minimum? 3 4 Following board approval of collective bargaining agreements, does the district Yes No make necessary budget revisions in the financial system to reflect settlement costs in accordance with EC 42142? 3 5 Do the district's responses fully explain the variances identified in the SACS Criteria Yes No and Standards Review form? 3 6 Has the district addressed any deficiencies the county superintendent of schools has No No identified in its oversight letters to the district in the most recent and prior two fiscal years? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 32 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 3 Budget Monitoring and Updates 2019 2025 3 7 Does the district prohibit processing of requisitions or purchase orders when the No Yes budget is insufficient to support the expenditure? 3 8 Does the district encumber funds for salaries and benefits and adjust those Yes Yes encumbrances as needed? 3 9 For the most recent and prior two fiscal years, have the district's interim Yes Yes financial reports and unaudited actuals been adopted and filed with the county superintendent of schools within the timelines established in Education Code? 3 Budget Monitoring and Updates Answer 2019 2025 Change in Number of “No” Responses Yes 5 4 No 4 5 Increased by 1 N/A 0 0 4 Cash Management 2019 2025 4 1 Are accounts held by the county treasurer reconciled with the district’s and county Yes Yes office of education's (COE) reports monthly? 4 2 Does the district reconcile all bank (cash and cash equivalent) accounts with each No No statement in a timely manner? 4 3 Does the district forecast its general fund cash flow for the current and subsequent No Yes year and update it as needed to ensure cash flow needs are known? 4 4 If the district’s cash flow forecast shows insufficient cash in its general fund to Yes N/A support its current and projected obligations, does the district have a reasonable plan to meet its cash flow needs for the current and subsequent year? 4 5 Does the district have sufficient cash resources in its other funds to support its No Yes current and projected obligations in those funds? 4 6 If the district uses interfund borrowing, is it complying with EC 42603? Yes N/A 4 7 If the district is managing cash in any fund(s) through external borrowing, does the N/A N/A district's cash flow projection include repayment based on the terms of the loan agreement? 4 Cash Management Answer 2019 2025 Change in Number of “No” Responses Yes 3 3 No 3 1 Decreased by 2 N/A 1 3 5 Charter Schools 2019 2025 5 1 Does the district have a board policy, memorandum of understanding (MOU), or Yes Yes other written document(s) regarding charter oversight? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 33 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 5 Charter Schools 2019 2025 5 2 Has the district fulfilled, and does it have evidence showing fulfillment of, its Yes No oversight responsibilities in accordance with EC 47604 32? 5 3 Are all charters authorized by the district going concerns and not in fiscal distress? Yes Yes 5 4 Has the district identified specific employees in its various departments (e g , human Yes No resources, business, instructional, and others) to be responsible for oversight of all approved charter schools? 5 5 Does the district monitor charter school audits for timeliness, completeness, and N/A* No exceptions? *Item 5.5 was not included in the 2019 FHRA. 5 Charter Schools Answer 2019 2025 Change in Number of “No” Responses Yes 4 2 No 0 3 Increased by 3 N/A 1 0 6 Collective Bargaining Agreements 2019 2025 6 1 Has the district settled with all its bargaining units for the past two fiscal years? Yes Yes 6 2 Has the district settled with all its bargaining units for the current year? Yes No 6 3 Does the district accurately quantify the effects of collective bargaining agreements Yes No and include complete disclosure documents that show the impact on its budget and multiyear projections? 6 4 Based on the presettlement analysis, did the district identify related costs or savings, Yes No and did it identify ongoing revenue sources or expenditure reductions to support the agreement in the current and subsequent years? 6 5 In the current and prior two fiscal years, has the total cost of the district's bargaining No No agreement settlements, including step-and-column increases, been at or under the funded cost-of-living adjustment (COLA)? 6 6 If settlements have not been reached in the past two years, has the district identified N/A N/A resources to cover the costs of the district's proposal(s)? 6 7 Did the district comply with public disclosure requirements under Government Code No Yes 3540 2 and 3547 5, and EC 42142? 6 8 Did the superintendent and chief business official (CBO) certify the public disclosure Yes No of collective bargaining agreement before board approval? 6 9 Is the governing board’s action consistent with the superintendent’s and CBO’s Yes Yes certification? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 34 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 6 Collective Bargaining Agreements Answer 2019 2025 Change in Number of “No” Responses Yes 6 3 No 2 5 Increased by 3 N/A 1 1 7 Contributions and Transfers 2019 2025 7 1 Does the district have an active, board-approved plan to eliminate, reduce or control Yes No any contributions/transfers from its unrestricted general fund to other restricted programs and funds? 7 2 If the district has deficit spending in funds other than the general fund, has it No N/A included in its multiyear projection sufficient transfers from the unrestricted general fund to cover any projected negative fund balance? 7 3 If any contributions or transfers were required for restricted programs and/or other No Yes funds in either of the prior two fiscal years, and there is a need in the current year, did the district budget for them at reasonable levels? 7 Contributions and Transfers Answer 2019 2025 Change in Number of “No” Responses Yes 1 1 No 2 1 Decreased by 1 N/A 0 1 8 Deficit Spending (Unrestricted General Fund) 2019 2025 8 1 Is the district avoiding deficit spending in the current fiscal year? Yes No 8 2 Is the district projected to avoid deficit spending in both of the two subsequent fiscal No No years? 8 3 If the district has deficit spending in the current or two subsequent fiscal years, Yes No has the board approved and implemented a plan to reduce and/or eliminate deficit spending to ensure fiscal solvency? 8 4 Has the district decreased deficit spending over the past two fiscal years and is there Yes N/A evidence of this in its unaudited actuals reports? 8 Deficit Spending (Unrestricted General Fund) Answer 2019 2025 Change in Number of “No” Responses Yes 3 0 No 1 3 Increased by 2 N/A 0 1 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 35 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 9 Employee Benefits 2019 2025 9 1 Has the district completed an actuarial valuation in accordance with Governmental Yes Yes Accounting Standards Board requirements to determine its unfunded liability for other post-employment benefits (OPEB)? 9 2 Does the district have a plan to fund its OPEB liabilities for the current and two Yes Yes subsequent years such that the total of annual required service payments (whether legally or contractually required, or locally defined such as pay-as-you-go premiums, trust agreement obligations, or a board-adopted commitment) are no greater than 2% of the district’s unrestricted general fund revenues? 9 3 Within the last five years, has the district conducted a verification and determination Yes Yes of eligibility for benefits for all active and retired employees and dependents? 9 4 Does the district track, reconcile and report employees’ compensated leave Yes Yes balances? 9 5 Has the district followed a policy or collectively bargained agreement to limit accrued No Yes vacation balances? 9 Employee Benefits Answer 2019 2025 Change in Number of “No” Responses Yes 4 5 No 1 0 Decreased by 1 N/A 0 0 10 Enrollment and Attendance 2019 2025 10 1 Has the district’s enrollment been increasing or remained stable for the current and No No prior two years? 10 2 Does the district monitor and analyze enrollment and average daily attendance Yes Yes (ADA) data at least monthly through the second attendance reporting period (P-2)? 10 3 Does the district track historical enrollment and ADA data to project future trends? Yes Yes 10 4 Do schools maintain an accurate record of daily enrollment and attendance that is Yes Yes reconciled monthly at the school and district levels? 10 5 Are the district’s enrollment projections and assumptions based on historical data, No Yes industry-standard methods, and other reasonable factors? 10 6 Has the district planned for enrollment losses to any charter schools? Yes No 10 7 Do all applicable schools and departments review and verify their respective No No California Longitudinal Pupil Achievement Data System (CALPADS) data and correct it as needed before the report submission deadlines? 10 8 Has the district certified its CALPADS data (most recent Fall 1, Fall 2, and end-of-year Yes No reports) by the required deadlines? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 36 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 10 Enrollment and Attendance 2019 2025 10 9 Does the district follow established board policy to limit outgoing interdistrict No No transfers and ensure that only students who meet the required qualifications are approved? 10 10 Does the district adhere to the average TK-3 class enrollment limits at each school, Yes No the adult-to-student ratio for each TK class, and the credentialing requirements for teachers assigned to TK classes as defined in the Education Code? 10 Enrollment and Attendance Answer 2019 2025 Change in Number of “No” Responses Yes 6 4 No 4 6 Increased by 2 N/A 0 0 11 Facilities 2019 2025 11 1 If the district participates in the state’s School Facility Program, has it made the N/A Yes required contribution to its Routine Restricted Maintenance Account? 11 2 Does the district have sufficient and available resources to cover all contracted Yes Yes obligations for capital facilities projects? 11 3 Does the district properly track and account for facility-related projects? Yes Yes 11 4 Does the district use its facilities fully (districtwide) in accordance with the Office of No No Public School Construction’s loading standards? 11 5 Does the district include facility needs (maintenance, repair, and operating Yes Yes requirements) when adopting a budget? 11 6 Has the district met the facilities inspection requirements of the Williams Act and Yes Yes resolved any outstanding issues? 11 7 If the district passed a Proposition 39 general obligation bond, has it met the Yes No requirements for audit, reporting, and a citizens’ bond oversight committee? 11 8 Does the district have a board-approved long-range facilities master plan completed Yes No within the last five years that reflects its current and projected facility needs? 11 Facilities Answer 2019 2025 Change in Number of “No” Responses Yes 6 5 No 1 3 Increased by 2 N/A 1 0 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 37 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 12 Fund Balance and Reserve for Economic Uncertainties 2019 2025 12 1 Is the district able to maintain the minimum reserve for economic uncertainties in the Yes Yes current year (including Fund 01 and Fund 17) as defined by the State Standards and Criteria for Fiscal Solvency? 12 2 Is the district able to maintain the minimum reserve for economic uncertainties in the No No two subsequent years? 12 3 If the district is not able to maintain the minimum reserve for economic uncertainties, No Yes does the district’s multiyear projection include a board-approved plan to restore the reserve? 12 4 Is the district’s projected unrestricted fund balance stable or increasing in the two No No subsequent fiscal years without unsubstantiated revenue increases or expenditure reductions? 12 5 If the district has unfunded or contingent liabilities or one-time costs other than post- No N/A employment benefits, does the unrestricted general fund balance include sufficient assigned or committed reserves above the recommended reserve level to cover these costs? 12 Fund Balance and Reserve for Economic Uncertainties Answer 2019 2025 Change in Number of “No” Responses Yes 1 2 No 4 2 Decreased by 2 N/A 0 1 13 General Fund – Current Year 2019 2025 13 1 Does the district ensure that one-time revenues do not pay for ongoing No No expenditures? 13 2 Is the percentage of the district’s general fund unrestricted expenditure budget that No No is allocated to salaries and benefits at or below the prior year statewide average? 13 3 Is the percentage of the district’s general fund unrestricted expenditure budget that No No is allocated to salaries and benefits at or below that of the prior two years? 13 4 If the district has received any uniform complaints or legal challenges regarding N/A N/A local use of supplemental and concentration grant funding in the current or prior two years, is the district addressing the complaint(s)? 13 5 For positions supported with one-time or restricted dollars, does the district either Yes Yes ensure that these funds are sufficient to pay for these staff or have a plan to pay for the positions with unrestricted funds? 13 6 Is the district using its restricted dollars fully by expending allocations for restricted No No programs within the required time? 13 7 Does the district account for all program costs, including the maximum allowable No No indirect costs, for each restricted resource and other funds? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 38 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 13 General Fund – Current Year 2019 2025 13 8 Are all balance sheet accounts in the general ledger reconciled at least at each Yes Yes interim report and at year-end close?* *Item 13.8 in the 2025 FHRA was previously identified as Item 3.9 in the 2019 FHRA. 13 General Fund - Current Year Answer 2019 2025 Change in Number of “No” Responses Yes 2 2 No 5 5 No change N/A 1 1 14 Information Systems and Data Management 2019 2025 14 1 Does the district use an integrated financial and human resources system? Yes Yes 14 2 Does the district use the system(s) to provide key financial and related data, Yes Yes including personnel information, to help the district make informed decisions? 14 3 Has the district accurately identified students who are eligible for free or reduced- No No price meals, English learners, and foster youth, in accordance with the LCFF and its LCAP? 14 4 Is the district using the same financial system as its COE? Yes Yes 14 5 If the district is using a separate financial system from its COE, is there an automated N/A N/A interface that allows data to be sent and received by both the district's and COE's financial systems? 14 6 If the district is using a separate financial system from its COE, has the district N/A N/A provided the COE with direct access so the COE can provide oversight, review and assistance? 14 Information Systems and Data Management Answer 2019 2025 Change in Number of “No” Responses Yes 3 3 No 1 1 No change N/A 2 2 15 Internal Controls and Fraud Prevention 2019 2025 15 1 Does the district have controls that limit access to its financial system and include Yes No multiple levels of authorization? 15 2 Are the district’s financial system’s access and authorization controls reviewed and No Yes updated upon employment actions (e g , resignations, terminations, promotions, or demotions) and at least annually? 15 3 Does the district ensure that duties in the following areas are segregated, and that they are supervised and monitored?: • Accounts payable (AP) No Yes Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 39 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 15 Internal Controls and Fraud Prevention 2019 2025 • Accounts receivable (AR) Yes Yes • Purchasing and contracts Yes Yes • Payroll No Yes • Human resources (i e , duties related to position control and payroll Yes No processes) 15 4 Are beginning balances for the new fiscal year posted and reconciled with the ending Yes Yes balances for each fund from the prior fiscal year? 15 5 Does the district review and work to clear prior year accruals throughout the year? No Yes 15 6 Has the district reconciled and closed the general ledger (books) within the time Yes Yes prescribed by the county superintendent of schools? 15 7 Does the district have processes and procedures to discourage and detect fraud? Yes No 15 8 Does the district have a process for collecting reports of possible fraud (such as an Yes No anonymous fraud reporting hotline) and for following up on such reports? 15 9 Does the district have an internal audit process? No No 15 Internal Controls and Fraud Prevention Answer 2019 2025 Change in Number of “No” Responses Yes 8 8 No 5 5 No change N/A 0 0 Note: Item 15.3 includes subitems so the total number of possible “Yes,” “No” or “N/A” responses is greater than the number of section items. 16 Leadership and Stability 2019 2025 16 1 Does the district have a CBO who has been in this position with the district for more No No than two years? 16 2 Does the district have a superintendent who has been in this position with the No No district for more than two years? 16 3 Does the superintendent schedule and hold meetings regularly with all members of Yes Yes their administrative cabinet? 16 4 Is training on financial management and budget provided to school and department Yes Yes administrators who are responsible for budget management? 16 5 Does the governing board adopt and revise policies and administrative regulations No No annually? 16 6 Are newly adopted or revised policies and administrative regulations implemented, No No communicated, and available to staff? 16 7 Do all board members attend training on the budget and governance at least every No No two years? 16 8 Is the superintendent’s evaluation performed according to the terms of the contract? Yes N/A Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 40 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 16 Leadership and Stability 2019 2025 16 9 Is the district avoiding relying on consultants to prepare financial reports (e g SACS) N/A* Yes or other primary fiscal activities? *Item 16.9 was not included in the 2019 FHRA. 16 Leadership and Stability Answer 2019 2025 Change in Number of “No” Responses Yes 3 3 No 5 5 No change N/A 1 1 17 Multiyear Projections 2019 2025 17 1 Has the district developed multiyear projections that include detailed assumptions No No aligned with industry standards? 17 2 To help calculate its multiyear projections, did the district prepare an accurate LCFF Yes Yes calculation that includes multiyear considerations? 17 3 Does the district use its most current multiyear projection when making financial Yes Yes decisions? 17 4 If the district uses a broad adjustment category in its multiyear projection (such No No as line B10, B1d, B2d Other Adjustments, in the SACS Form MYP/MYPI), is there a detailed list of what is included in the adjustment amount and are the adjustments reasonable? 17 Multiyear Projections Answer 2019 2025 Change in Number of “No” Responses Yes 2 2 No 2 2 No change N/A 0 0 18 Non-Voter-Approved Debt and Risk Management 2019 2025 18 1 Are the sources of repayment for non-voter-approved debt (such as certificates of No Yes participation [COPs], bridge financing, bond anticipation notes [BANS], revenue anticipation notes [RANS] and others) stable, predictable, and other than the unrestricted general fund? 18 2 If the district has issued non-voter-approved debt, has its credit rating remained Yes Yes stable or improved during the current and prior two fiscal years? 18 3 If the district is self-insured, has it completed an actuarial valuation as required and No No does it have a plan to pay for any unfunded liabilities? 18 4 If the district has non-voter-approved debt (such as COPs, bridge financing, BANS, Yes Yes RANS and others), is the total of annual debt service payments no greater than 2% of the district’s unrestricted general fund revenues? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 41 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 18 Non-Voter-Approved Debt and Risk Management Answer 2019 2025 Change in Number of “No” Responses Yes 2 3 No 2 1 Decreased by 1 N/A 0 0 19 Position Control 2019 2025 19 1 Does the district account for all positions and costs (including substitutes, overtime, No No stipends, and employer-paid benefits) in position control? 19 2 Does the district analyze and adjust staffing based on staffing ratios and enrollment? No No 19 3 Does the district reconcile budget, payroll and position control regularly, at least at Yes Yes budget adoption and interim financial reporting periods? 19 4 Does the district identify a budget source for each new position before the position is No Yes authorized by the governing board? 19 5 Does the governing board approve all new positions and extra assignments (e g , Yes Yes stipends) before positions are posted? 19 6 Do managers and staff responsible for the district’s human resources, payroll and Yes Yes budget functions meet at least monthly to discuss issues and improve processes? 19 Position Control Answer 2019 2025 Change in Number of “No” Responses Yes 3 4 No 3 2 Decreased by 1 N/A 0 0 20 Special Education 2019 2025 20 1 For special education classrooms and support services, does the district use staffing Yes Yes ratios that align with statutory requirements and industry standards, and are students’ support needs also considered? If so, are those needs documented and evaluated at each budget cycle? 20 2 Does the district access all available funding sources for costs related to special No Yes education (e g , state excess cost pool, legal fees, mental health)? 20 3 Does the district use appropriate tools to help it make informed decisions about No No whether to add services (e g , special circumstance instructional assistance process and form, transportation decision tree)? 20 4 Does the district budget and account correctly for all costs related to special No No education (e g , transportation, due process hearings, indirect costs, nonpublic schools and/or nonpublic agencies)? 20 5 Does the district monitor contributions from the unrestricted general fund and adjust N/A* Yes to trends in the special education program? Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 42 Appendix Appendix A – Comparison of 2019 and 2025 FHRA Results 20 Special Education 2019 2025 20 6 Is the district’s rate of identification of students as eligible for special education at or Yes Yes below the countywide and statewide average rates? 20 7 Does the district analyze whether it will meet the maintenance of effort requirement No Yes at each interim financial reporting period? *This question was not included in the 2019 FHRA. 20 Special Education Answer 2019 2025 Change in Number of “No” Responses Yes 2 5 No 4 2 Decreased by 2 N/A 1 0 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 43 Appendix Appendix B – Study Agreement Appendix B – Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 44 Appendix Appendix B – Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 45 Appendix Appendix B – Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 46 Appendix Appendix B – Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 47 Appendix Appendix B – Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 48 Appendix Appendix B – Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 49 Appendix Appendix B – Study Agreement Michael H. Fine Digitally signed by Michael H. Fine Date: 2025.01.22 16:11:08 -08'00' Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 50