Coachella Valley Unified School District Report

Fiscal Review February 3, 2026 Coachella Valley Unified School District Michael H. Fine Chief Executive Officer February 3, 2026 Frances Esparza, Ed.D., Superintendent Coachella Valley Unified School District 87225 Church St. Thermal, CA 92274 Dear Superintendent Esparza: In August 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 review of the district’s 2025- 26 adopted general fund budget and multiyear financial projections. The agreement stated that FCMAT would perform the following: 1. Review the district’s 2025-26 adopted general fund budget and use it as a baseline to develop an independent multiyear financial projection (MYFP) for the current and two subsequent fiscal years, including a cash flow analysis for the same period. The MYFP will be a snapshot in time of the district’s financial status. 2. The team will present the final report to the district’s board of trustees at a public meeting following the completion of the review. This report contains the study team’s findings and recommendations. FCMAT appreciates the opportunity to serve 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 Table of Contents Table of Contents About FCMAT ...................................................................................................ii Introduction ......................................................................................................iv Background ...............................................................................................................iv Study and Report Guidelines ................................................................................iv Study Team ................................................................................................................iv Executive Summary ........................................................................................v Findings and Recommendations.................................................................1 Multiyear Financial Projection ................................................................................1 Enrollment, Unduplicated Pupils, and Average Daily Attendance ..............4 Multiyear Financial Projection Assumptions ....................................................10 Multiyear Financial Projection Analysis .......................................................... 20 Cash Flow .................................................................................................................26 Appendix ........................................................................................................27 Appendix A ..............................................................................................................28 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District i About FCMAT 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 identify, prevent and resolve financial, management, program, data, and oversight challenges; provides professional 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 instruc- tion, 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 top- ics include associated student body operations, use of FCMAT’s Projection-Pro online financial forecast- ing 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, policymakers, 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 ii About FCMAT 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, re- spectively. Assembly Bill 1840 (Chapter 426, Statutes of 2018) changed how fiscally insolvent districts are adminis- tered 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 iii Introduction Background Introduction Background The Coachella Valley Unified School District is governed by a seven-member board of trustees and serves 15,817 students in grades TK-12 at 14 elementary schools, three middle schools, one continuation high school, three comprehensive high schools and one adult school. In addition, the district oversees one independent charter school with an enrollment of 235 students. The district is geographically vast, encompassing 1,250 square miles in Riverside and Imperial counties serving the communities of Coach- ella, Thermal, Mecca, Oasis, Indio, and the Salton Sea. According to 2024-25 data available through the California Department of Education (CDE), approximately 92.8% of the district’s students are socioeco- nomically disadvantaged, 40.0% are English learners, and the district’s unduplicated pupil percentage (UPP) is 94.3%.1 Study and Report Guidelines In August 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 review of the district’s 2025- 26 adopted general fund budget and to prepare an independent multiyear financial projection (MYFP) for the current and two subsequent fiscal years, including a cash flow analysis for the same period. The MYFP is a snapshot in time of the district’s financial status. FCMAT visited the district on September 23-25, 2025, to conduct interviews with district and school staff, collect data and review documents. Following fieldwork, FCMAT continued to review and analyze docu- ments. This report is the result of 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, a comprehensive guide to usage and accepted style that emphasizes con- ciseness and clarity. In addition, this guide emphasizes plain language, discourages the use of jargon and capitalizes relatively few terms. Study Team The study team was composed of the following members: Jennifer Nerat, CFE Alyssa Low FCMAT Intervention Specialist FCMAT Intervention Specialist Leonel Martínez FCMAT Technical Writer Each team member reviewed the draft report to confirm accuracy and achieve consensus on the final recommendations. 1. UPP refers to the percentage of students who are English learners, foster youth or eligible for free or reduced-price meals. Students are counted only once even if they are in more than one of these categories. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District iv Executive Summary Executive Summary FCMAT’s primary objective in this study was to review the district’s 2025-26 adopted general fund budget and develop an independent multiyear financial projection (MYFP) and cash flow analysis. The team reviewed numerous documents and financial reports, including the district’s 2025-26 adopted budget report; 2023-24 audit report, 2024-25 unaudited actuals report, enrollment and attendance data, and various other current and historical information relevant to the study. FCMAT developed its MYFP based on the district’s 2025-26 adopted budget report, along with information from the district’s financial system and staff. Financial projections are based on certain assumptions and criteria, including enrollment and average daily attendance (ADA) trends, cost-of-living adjustments, economic conditions, and revenue and expenditure estimates. Therefore, any changes in these underlying assumptions will alter the results of the projection. The district’s 2025-26 adopted general fund budget and MYFP were based on the district’s 2024-25 esti- mated actuals, the 2025-26 Governor’s May Revision Budget proposal, and other assumptions available at the time of preparation. Due to the time that elapsed between the district’s 2025-26 adopted budget report and FCMAT’s review and preparation of an equivalent MYFP, FCMAT had access to more current informa- tion compared to the assumptions used by the district. Specifically, FCMAT’s MYFP was based on the 2025- 26 enacted State Budget, as well as updated information on economic factors, enrollment and ADA. The district’s 2025-26 adopted budget and MYFP projected that it would meet the state’s minimum reserve requirements in each year, despite deficit spending in the unrestricted general fund of $14,702,943 in 2025- 26, $26,583,726 in 2026-27, and $17,065,793 in 2027-28. FCMAT’s projection for the unrestricted general fund shows a deficit of $14,865,265 in 2025-26, and continued deficit spending of $25,625,430 in 2026- 27 and $29,292,414 in 2027-28. This structural deficit reduces the district’s projected ending unrestricted fund balance to $7,632,028 in 2027-28, which falls short of meeting the 3% minimum reserve requirement by $3,644,879. It is imperative that the district continue to develop and update a detailed deficit reduction plan, including a timeline for completion, and implement it as soon as possible to eliminate deficit spending. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District v Findings and Recommendations Multiyear Financial Projection Findings and Recommendations Multiyear Financial Projection Assembly Bill (AB) 1200 and AB 2756 require multiyear financial projections (MYFPs) as part of the budget adoption and interim reporting process. AB 2756, signed into law in June 2004, made substantive changes to the financial accountability and oversight process for monitoring the fiscal health of school districts and county offices of education. This included granting greater authority and responsibility for the superinten- dent of public instruction (SPI) and county superintendents of schools to intervene during fiscal crises and request assistance from the Fiscal Crisis and Management Assistance Team. At any time during the fiscal year, if a school district cannot meet its financial obligations for the current or two subsequent fiscal years, or if it receives a qualified or negative interim report certification, the county superintendent must notify the district’s governing board and the SPI. The county office must adhere to Education Code (EC) 42127.6 when helping a school district in fiscal distress. EC 42127.6 allows for the development of “a multiyear financial recovery plan that will enable the school district to meet its future obligations.” The MYFP is the primary tool used to develop this plan and restore the school district’s required reserve for economic uncertainties. Prudent financial planning is critical for all local educational agencies (LEAs), regardless of their size or structure. MYFPs enable school districts to make budget decisions that strategically align current and future resources with their goals, programs, and Local Control and Accountability Plans (LCAP). Recognizing finan- cial trends is also essential for maintaining school districts’ fiscal health. Monitoring and analyzing year-to- year trends in key budget areas helps school districts identify areas of concern and take action to mitigate their effects. The primary objective when developing an MYFP is to achieve and sustain a balanced budget that will allow the school district to maintain its fiscal solvency and avoid loss of local governance. Multiyear financial projections forecast the future fiscal impact of current decisions. Any forecast of financial data has inherent limitations because calculations are based on certain economic assumptions and criteria, including enrollment trends, cost-of-living adjustments (COLAs), estimates of various one-time and ongoing costs, and changing economic conditions at federal, state and local levels. Therefore, any projection should be viewed as a point-in-time trend based on recent assumptions rather than a prediction of exact amounts. Projections should be updated at least at each financial reporting period, when known economic forecasts change, and before any significant decisions are made that affect the budget, such as salary increases or other major financial commitments. Preparing multiple MYFPs for different funding scenarios can help identify a range of possibilities. Ongoing budget monitoring is important, particularly in times of fiscal uncertainty, when projections may be less reliable due to frequent changes in projected federal and state revenues. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 1 Findings and Recommendations Multiyear Financial Projection Developing Accurate Multiyear Financial Projections School district management is responsible for preparing, monitoring, and reporting accurate budget and financial data to support the governing board in making informed decisions. As the ultimate stewards of the school district’s financial health, governing board members must ensure fiscal stability while maximizing student services within available resources. The governing board holds a fiduciary duty to the school dis- trict — and, by extension, to students, parents, community, and staff — to safeguard its financial condition and ensure it can meet its obligations. To fulfill these responsibilities, school districts must engage in proactive financial planning to antici- pate future needs and ensure long-term fiscal stability. Effective financial planning requires a structured approach to tracking and projecting funds. Over the past five years, significant investments in one-time and ongoing restricted programs for transitional kindergarten through grade 12 (TK-12) have made it essential to develop MYFPs by resource. This level of detail ensures that projections accurately account for both one- time and restricted funds available for expenditure over multiple years. California LEAs use various methods and tools to prepare MYFPs. Significant investments in one-time and ongoing restricted programs over the past five years make the development of MYFPs by resource essen- tial to ensure projections accurately account for both one-time and restricted funds available for expen- diture over multiple years. Developing MYFPs by resource also helps school districts prioritize spending restricted funds before using unrestricted funds, plan effectively plan for the best use of funds and accu- rately project general fund balances into subsequent years. Tracking can be accomplished using FCMAT’s Projection-Pro multiyear and cash flow projection software, a web-based forecasting tool that is available for free to all school districts, charter schools, and county offices. Adjustment Analysis When developing its MYFP, FCMAT analyzed the district’s revenue and expenditure trends for the prior two years (2023-24 and 2024-25) to gain a historical understanding of its finances. The team used the district’s 2025-26 adopted budget as the basis for projecting the base year and the two subsequent fiscal years. FCMAT applied industry-standard assumptions from the Department of Finance (DOF), the California Department of Education (CDE) and the School Services of California Inc. (SSC) to ensure accuracy and consistency. Program revenues not expected to continue in future years were excluded from the projection. The first step in FCMAT’s MYFP development process was to establish base-year revenues and expendi- tures, with 2025-26 serving as the base year for analysis. Accurately estimating these amounts is crucial because these figures form the foundation for the financial projections in subsequent years. Inaccurate base figures can lead to flawed or unreliable projections, impacting long-term financial planning. Table 1 below shows the differences between the district’s 2025-26 adopted budget and FCMAT’s analysis. Any adjustments included in the MYFP are noted in the “Adjustments” column. The district used estimated 2024-25 revenues and expenditures to determine its adjusted beginning fund balance, nonspendable amounts, and restricted ending balance. In contrast, FCMAT used the district’s 2024-25 unaudited actuals, finalized in September 2025, to determine these amounts. As a result, the district’s projected 2025-26 gen- eral fund beginning balance at budget adoption was $10,417,515 lower than its actual 2025-26 general fund beginning balance. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 2 Findings and Recommendations Multiyear Financial Projection Table 1. FCMAT Multiyear Financial Projection Comparison Summary, Combined General Fund, 2025-26 District Object 2025-26 Adjustment FCMAT Description Code Budget to Base Year 2025-26 Budget A. Revenues LCFF Sources 8010-8099 245,207,223 653,937 245,861,160 Federal Revenue 8100-8299 16,730,740 (1,193,857) 15,536,883 Other State Revenues 8300-8599 53,783,333 8,834,082 62,617,415 Other Local Revenues 8600-8799 14,581,206 4,541,013 19,122,219 Other Financing Sources - Transfers In 8900-8929 13,000,000 - 13,000,000 Total, Revenue 343,302,502 12,835,175 356,137,677 B. Expenditures Certificated Salaries 1000-1999 131,073,157 1,473,732 132,546,889 Classified Salaries 2000-2999 56,243,761 600,990 56,844,751 Employee Benefits 3000-3999 107,352,599 2,837,207 110,189,806 Books and Supplies 4000-4999 21,243,988 1,214,942 22,458,930 Services and Other Operating Expenditures 5000-5999 44,251,820 1,386,077 45,637,897 Capital Outlay 6000-6999 2,283,900 652,927 2,936,827 7100-7299 Other Outgo (excluding Transfers of Indirect Costs) 7400-7499 1,420,658 926,780 2,347,438 Other Outgo - Transfers of Indirect Costs 7300-7399 (1,341,303) 47,609 (1,293,694) Other Financing Uses - Transfers Out 7600-7629 400,000 - 400,000 Total, Expenditures 362,928,580 9,140,264 372,068,844 C. Net Increase (Decrease) in Fund Balance (19,626,078) 3,694,911 (15,931,167) D. Fund Balance Beginning Fund Balance, July 1 9791 119,717,696 10,417,515 130,135,211 Audit Adjustments 9793 - - - Adjusted Beginning Balance 119,717,696 10,417,515 130,135,211 Ending Fund Balance, June 30 100,091,618 14,112,426 114,204,044 Components of Ending Fund Balance Nonspendable 9710-9719 - - - Restricted 9740 45,214,868 6,439,304 51,654,172 Committed - Stabilization Arrangements 9750 43,472,604 5,300,393 48,772,997 Other Commitments 9760 - - - Assigned - Other Assignments 9780 - - - Unassigned/Unappropriated - Reserve for Economic Uncertainties 9789 10,887,857 241,433 11,162,065 Unassigned/Unappropriated 9790 516,283 2,123,851 2,614,809 Source: District’s 2025-26 adopted budget report and 2024-25 Unaudited Actuals; and FCMAT’s MYFP. Note: Rounding used in calculations. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 3 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance Enrollment, Unduplicated Pupils, and Average Daily Attendance Enrollment and Average Daily Attendance Projections The Local Control Funding Formula (LCFF) determines the largest total amount of unrestricted funding a school district receives. Accurate enrollment and ADA projections are essential elements of any MYFP because student enrollment, unduplicated pupil count (UPC), and ADA by grade level are all core compo- nents of the LCFF calculation. Enrollment projections are critical for identifying changes that could significantly affect an LEA’s estimated revenue in the current and subsequent years. Failure to anticipate ADA-related revenue declines and adjust staffing and expenditures accordingly can jeopardize an LEA’s financial stability. Analyzing historical enroll- ment and attendance trends helps identify potential shifts in future enrollment. Accurate and timely projections are also essential for determining instructional priorities, staffing ratios, grade-level configurations, and potential boundary changes. Enrollment projections should be detailed enough to monitor and project class sizes in future years. To maintain accurate and meaningful data, LEAs should regularly update and compare enrollment projections to actual enrollment. Ongoing monitoring of enrollment and attendance data helps LEAs anticipate staffing needs and potential layoffs. Enrollment and ADA projections have inherent limitations because they are based on assumptions rather than exact calculations. Enrollment is influenced by various factors, such as the unpredictable timing of housing developments, unforeseen events affecting enrollment (e.g., the COVID-19 pandemic), shifts in local and regional demographics and birth rates, and fluctuating local, state, and national economic condi- tions. Other variables include historical ratios of enrollment progression between grade levels, changes in educational programs, and incoming and outgoing interdistrict transfers. Therefore, enrollment and ADA projections should be viewed as reasonable forecasts or trends rather than predictions of exact numbers. To develop its MYFP, FCMAT reviewed the district’s enrollment, UPC, and ADA trends from 2014-15 through 2024-25. The team then used Projection-Pro to prepare projections for the base year and the two subse- quent years using a weighted cohort survival methodology. These projections were used to calculate LCFF and other federal and state revenue estimates. Enrollment Between 2014-15 and 2024-25, the district’s enrollment declined overall by 16.19% or 2,849 students. Most recently, from 2022-2025, the district’s enrollment declined by an average of 1.65% each year from 16,455 students to 15,817 students. The district uses historical enrollment to prepare its enrollment projections. The district’s 2025-26 adopted budget MYFP assumed a 1.75% decline in enrollment from 2024-25 to 2025-26 as the basis for 2025-26 enrollment, which is equivalent to a loss of 277 students from the prior year. The district assumed the same year-over-year enrollment loss of 277 students in each of the subse- quent two years. Local educational agencies commonly use the weighted cohort survival method to project enrollment, which is also the model used by FCMAT’s Projection-Pro software. This method groups students by grade level upon entry and tracks them through each year they remain in school to evaluate the longitudinal relationship of the number of students advancing from one grade to the next, placing greater emphasis on more recent data. By doing so, the weighted cohort survival method more closely accounts for student Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 4 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance retention and new and departing students by grade. FCMAT’s enrollment projections did not differ sig- nificantly from the district’s projections in 2025-26; however, due to FCMAT’s utilization of the weighted cohort survival methodology, differences arise in 2026-27 and 2027-28 (see Table 5 in the “Comparison of Enrollment, UPP, and ADA Projections” subsection of this report). Cohort survival rates are calculated from historical enrollment data certified on the Fall 1 census day for the California Longitudinal Pupil Achievement Data System (CALPADS), which is always the first Wednesday in October. This data is used to determine the percentage increase or decrease in enrollment between any two grades. For example, if 100 students were certified as enrolled in first grade in 2023-24 and that number increased to 104 in second grade in 2024-25, the cohort survival rate would be 104%, or a ratio of 1.04. These ratios are calculated between each pair of grades over several years. Such ratios are key factors that contribute to the reliability of the projections and depend on the validity of the initial data. Each ratio collectively encompasses the variables that could account for an increase or decrease in the size of a grade cohort as it progresses over time. The anomalies of 2020-21 and 2021-22 caused by the COVID-19 pandemic made using a five-year cohort survival method unreliable. For example, the district experienced an enrollment decrease of 0.73% in 2019- 20, followed by a decline of 2.03% in 2020-21, and a decline of 3.90% in 2021-22. To account for these irregularities, FCMAT used a three-year weighted historical average to project enrollment. Projecting TK and kindergarten (K) enrollment differs from other grades because they are the first years of enrollment in the district. Because there isn't a cohort to draw from, FCMAT projected 2025-26 enrollment for these initial grades based on the 2024-25 actual enrollment and then held the enrollment levels flat for 2026-27 and 2027-28. Table 2. Historical Data and FCMAT Enrollment Projections, 2020-21 – 2027-28 Enrollment by Actual Actual Actual Actual Actual Projected Projected Projected Grade 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Grade TK 183 179 255 341 396 396 396 396 Grade K 1,147 1,155 1,043 1,019 993 993 993 993 Grade 1 1,245 1,174 1,212 1,078 1,063 1,033 1,033 1,033 Grade 2 1,274 1,206 1,208 1,216 1,127 1,096 1,065 1,065 Grade 3 1,296 1,253 1,221 1,217 1,217 1,130 1,099 1,068 Subtotal TK-3 5,145 4,967 4,939 4,871 4,796 4,648 4,586 4,555 Grade 4 1,324 1,259 1,268 1,240 1,232 1,233 1,145 1,114 Grade 5 1,408 1,277 1,259 1,279 1,269 1,255 1,256 1,166 Grade 6 1,325 1,317 1,297 1,237 1,283 1,264 1,250 1,251 Subtotal 4-6 4,057 3,853 3,824 3,756 3,784 3,752 3,651 3,531 Grade 7 1,340 1,224 1,290 1,246 1,233 1,263 1,245 1,231 Grade 8 1,422 1,300 1,231 1,272 1,250 1,230 1,260 1,242 Subtotal 7-8 2,762 2,524 2,521 2,518 2,483 2,493 2,505 2,473 Grade 9 1,411 1,297 1,225 1,144 1,191 1,167 1,149 1,177 Grade 10 1,367 1,391 1,273 1,186 1,152 1,184 1,160 1,142 Grade 11 1,258 1,334 1,372 1,236 1,175 1,134 1,165 1,142 Grade 12 1,299 1,259 1,301 1,335 1,236 1,164 1,124 1,155 Subtotal 9-12 5,335 5,281 5,171 4,901 4,754 4,649 4,598 4,616 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 5 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance Enrollment by Actual Actual Actual Actual Actual Projected Projected Projected Grade 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Total TK-12 Enrollment 17,299 16,625 16,455 16,046 15,817 15,542 15,340 15,175 Enrollment Increase or Decrease from Prior School Year - -674 -170 -409 -229 -275 -202 -165 Sources: DataQuest and FCMAT’s MYFP. Unduplicated Pupil Percentage The district’s unduplicated pupil percentage (UPP) is used to determine a portion of its LCFF funding, specifically for supplemental and concentration grants. The UPP is the percentage of students identified as English learners, foster youth, or eligible for free or reduced-price meals. Each student is counted only once, even if they meet more than one of these criteria. The UPP for LCFF funding is calculated using a three-year rolling average of the ratio of unduplicated students to total enrollment. The district’s UPP has remained around 94% since 2022-23. The district’s 2025-26 adopted budget MYFP projected the number of unduplicated pupils to decrease by 217 students in 2025-26 to a total of 14,771, and a UPP of 94.61%. Following this, the number is expected to decrease by 213 students in 2026-27 and by 211 students in 2027-28, resulting in a UPP of around 95% by the third year. FCMAT used Projection-Pro to calculate an average ratio using a three-year historical ratio of the district’s unduplicated pupil count to total enrollment and applied this ratio to determine the UPP for the subsequent years, as shown in Table 3. FCMAT’s UPP projection is slightly lower than the district’s projection for 2025- 26 and 2026-27, and slightly higher for 2027-28 but remains close to 94% each year. Table 3. Historical Data and FCMAT Projections of Enrollment and Unduplicated Pupil Count, 2020-21 – 2027-28 Actual Actual Actual Actual Actual Projected Projected Projected 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 UPC 16,329 15,258 15,420 15,151 14,931 14,655 14,464 14,309 Total Enrollment 17,299 16,625 16,455 16,046 15,817 15,542 15,340 15,175 UPC-to-Total Enrollment Ratio (UPP) 94.39% 91.78% 93.71% 94.42% 94.40% 94.29% 94.29% 94.29% Sources: California Department of Education (CDE) through the California Longitudinal Pupil Achievement Data System (CALPADS) and FCMAT’s MYFP Notes: Rounding used in all calculations Average Daily Attendance Average daily attendance is calculated by dividing the total number of student attendance days in a school year by the total number of instructional days. Traditionally, LCFF apportionments have been based on the greater of current year or prior year second reporting period (P-2) ADA. However, the 2022-23 state budget introduced a provision allowing school districts to use the greater of current year, prior year, or the average Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 6 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance of the three most recent prior years’ ADA. P-2 ADA is calculated using student attendance from the first day of school through the last school month ending on or before April 15. During the COVID-19 pandemic, the state made several changes to how ADA was reported and funded. • For the 2019-20 school year, the second and annual attendance reporting periods were adjusted to include full school months from July 1, 2019, through the last month ending on or before February 29, 2020, inclusive. • For 2020-21 funding, the state allowed LEAs to use 2019-20 ADA as a proxy for 2020-21 ADA, preventing funding reductions due to pandemic-related attendance declines. • For the 2021-22 fiscal year, LCFF funding was based on the greater of 2021-22 ADA or the 2019-20 attendance-to-enrollment ratio applied to 2021-22 enrollment. The district monitors and analyzes enrollment and ADA monthly and by reporting period (i.e., first, second and annual) for each school. In its 2025-26 adopted budget MYFP, the district projected a 90.78% overall TK-12 attendance ratio for its ADA projections. FCMAT reviewed the district’s enrollment and ADA trends from 2020-21 through 2024-25, comparing the October CALPADS student enrollment counts to the P-2 ADA to determine the average ADA-to-enrollment ratios for grades TK-12. FCMAT used a three-year historical average to exclude the use of 2020-21 and 2021-22 ADA held harm- less from the effects of pandemic-related attendance declines. Based on these historical ratios, FCMAT’s Projection-Pro software calculated TK-12 grade span weighted average ratios ranging from 88.03% to 92.30% and used them to project ADA for 2025-26 and the two subsequent years. Table 4 below shows historical data and FCMAT’s projections for the district’s ADA. Table 4. Historical Data and FCMAT Projections of Enrollment and ADA by Grade Group, 2020-21 — 2027-28 Actual Actual Actual Actual Actual Projected Projected Projected 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Grades TK-3 ADA 5,087.13 4,710.75 4,442.51 4,491.02 4,425.13 4,269.56 4,212.60 4,184.13 Enrollment 5,145 4,967 4,939 4,871 4,796 4,648 4,586 4,555 ADA-to-Enrollment Ratio 98.88% 94.84% 89.95% 92.20% 92.27% 91.86% 91.86% 91.86% Grades 4-6 ADA 3,935.56 3,684.67 3,476.43 3,474.30 3,504.82 3,462.95 3,369.73 3,258.98 Enrollment 4,057 3,853 3,824 3,756 3,784 3,752 3,651 3,531 ADA-to-Enrollment Ratio 97.01% 95.63% 90.91% 92.50% 92.62% 92.30% 92.30% 92.30% Grades 7-8 ADA 2,766.80 2,363.40 2,246.20 2,278.16 2,241.71 2,247.42 2,258.24 2,229.39 Enrollment 2,762 2,524 2,521 2,518 2,483 2,493 2,505 2,473 ADA-to-Enrollment Ratio 100.17% 93.64% 89.10% 90.48% 90.28% 90.15% 90.15% 90.15% Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 7 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance Actual Actual Actual Actual Actual Projected Projected Projected 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Grades 9-12 ADA 4,897.51 4,913.18 4,507.85 4,331.34 4,187.20 4,092.37 4,047.48 4,063.32 Enrollment 5,335 5,281 5,171 4,901 4,754 4,649 4,598 4,616 ADA-to-Enrollment Ratio 91.80% 93.04% 87.18% 88.38% 88.08% 88.03% 88.03% 88.03% Grades TK-12 ADA 16,687.00 15,672.00 14,672.99 14,574.82 14,358.86 14,072.30 13,888.05 13,735.82 Enrollment 17,299 16,625 16,455 16,046 15,817 15,542 15,340 15,175 ADA-to-Enrollment Ratio 96.46% 94.27% 89.17% 90.83% 90.78% 90.54% 90.53% 90.52% Sources: Dataquest, CDE Principal Apportionment Exhibits and FCMAT’s MYFP. Note: Rounding used in calculations. Comparison of Enrollment, UPP, and ADA Projections FCMAT’s enrollment projection for 2025-26 was two students higher than the district’s projected enroll- ment. Differences in the projections in the two subsequent fiscal years grew each year, with variances of 77 students in 2026-27 and 189 students in 2027-28. This is attributed to FCMAT using the cohort survival methodology whereas the district applied a 1.75% decline in enrollment from 2024-25 for 2025-26, and an overall reduction of 277 students in each of the two subsequent years as stated earlier. There was no significant difference between FCMAT’s and the district’s UPC-to-total enrollment ratio projections. The district assumed a UPC ratio of 94.61% in 2025-26, and 94.92% and 95.27% for the two subsequent years respectively, while FCMAT’s historical analysis identified stability in the ratio. To reflect this, FCMAT used a three-year average of 94.29% for 2025-26, 2026-27, and 2027-28. For ADA, FCMAT’s projection was 34.7 lower than the district’s in 2025-26 but higher in subsequent years, with differences of 32.05 in 2026-27 and 131.82 in 2026-28. Table 5 below compares the district’s 2025-26 adopted budget projections for enrollment, UPC, and ADA with FCMAT’s projections. Table 5. Comparison of District and FCMAT MYFP Projections, 2025-26 — 2027-28 Description 2025-26 2026-27 2027-28 Enrollment District 15,540 15,263 14,986 FCMAT 15,542 15,340 15,175 Difference -2 -77 -189 UPP District 14,714 14,501 14,290 FCMAT 14,655 14,464 14,309 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 8 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance Description 2025-26 2026-27 2027-28 Difference 59 37 -19 ADA District 14,107.40 13,855.93 13,604.47 FCMAT 14,072.30 13,888.05 13,735.82 Difference 34.70 -32.12 -131.35 Sources: District's 2025-26 adopted budget report and FCMAT’s MYFP. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 9 Findings and Recommendations Multiyear Financial Projection Assumptions Multiyear Financial Projection Assumptions District Assumptions As discussed earlier in this report, it is best practice for school districts to create their MYFPs by updat- ing revenues and expenditures in each funding resource within both the unrestricted and restricted general fund. Coachella Valley USD developed the 2025-26 adopted budget using the following major assumptions: • Unrestricted general fund revenues: LCFF revenues were updated using the LCFF calcula- tor available at budget adoption. For other state and local revenues, COLA factors of 3.02% for 2026-27 and 3.42% for 2027-28 were applied to the 2025-26 base amounts to project subsequent years. • Salaries: The district assumed a 2% step-and-column increase for certificated salaries and a 1% step increase for classified salaries in each of the subsequent fiscal years. • Certificated statutory benefits: A total statutory benefit rate of 25.88% was applied to certif- icated salaries in each year. • Classified statutory benefits: Statutory benefit rates were set at 39.79% for 2025-26, 39.38% for 2026-27, and 39.88% for 2027-28. • Nonsalary expenditures: The district applied a COLA factor of 2.30% for 2025-26 base year expenditures, 3.02% for 2026-27, and 3.42% for 2027-28. The California Price Index (CPI) was additionally applied to the base year and two subsequent years: 3.09% on the base year, 2.82% in 2026-27 and 2.72% in year 2027-28. FCMAT Assumptions FCMAT’s MYFP used the district’s 2024-25 unaudited actuals and 2025-26 adopted budget as the base- line for its projections and included the impact of the state’s 2025-26 enacted budget. The study team reviewed district records, interviewed staff members, and examined various financial documents to gather the necessary information for the MYFP. Assumptions were based on conservative economic factors and estimates, described by major revenue and expenditures categories in line with the object code. In developing its MYFP, FCMAT used Projection-Pro to update each separate funding resource for the base year and subsequent fiscal years. The key planning factors and budget assumptions used in FCMAT’s MYFP were based on the latest information available at the time, as shown in Table 6 below and further described in the following paragraphs. Table 6. FCMAT MYFP Budget Assumptions, 2025-26 — 2027-28 Description 2025-26 2026-27 2027-28 Statutory COLA (DOF) 2.30% 3.02% 3.42% LCFF COLA 2.30% 3.02% 3.42% State Categorical COLA 2.30% 3.02% 3.42% California CPI 3.09% 2.82% 2.72% California Lottery, Unrestricted per ADA $ 190.00 $ 190.00 $ 190.00 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 10 Findings and Recommendations Multiyear Financial Projection Assumptions Description 2025-26 2026-27 2027-28 California Lottery, Restricted per ADA (Proposition 20) $ 82.00 $ 82.00 $ 82.00 Mandate Block Grant, District (K-8), per ADA $ 39.09 $ 40.27 $ 41.65 Mandate Block Grant, District (9-12), per ADA $ 76.48 $ 78.79 $ 81.48 Interest Rate Trend for 10-Year Treasuries 4.50% 4.36% 4.40% CalSTRS Employer Rate 19.10% 19.10% 19.10% CalPERS Employer Rate 26.81% 26.40% 26.90% Certificated Staff Step & Column 2.00% 2.00% 2.00% Classified Staff Step 1.00% 1.00% 1.00% Health & Welfare Percent Change 3.85% 3.85% 3.85% State Unemployment Insurance Rate 0.05% 0.05% 0.05% Workers' Compensation Insurance Rate 4.85% 4.85% 4.85% District Indirect Cost Rate 6.19% 6.19% 6.19% Sources: FCMAT, DOF, CDE, SSC and the district. Revenues FCMAT validated the district’s revenue using data from the CDE, the DOF, the SSC Dartboard, and grant let- ters. The team analyzed district estimates for sources that could not be independently verified and adjusted the MYFP to account for one-time funds and carryover from previous years.2 Local Control Funding Formula Sources The LCFF is the primary funding source for school districts and provides the following: • A base grant per pupil that varies by grade level. • A grade span adjustment of 10.4% of the TK-3 base grant and 2.6% of the 9-12 base grant. • A TK add-on rate per current year ADA. • A supplemental grant that provides an additional 20% of the base grant, multiplied by the school district’s UPP. • A concentration grant that provides an additional 65% of the base grant, multiplied by the school district’s UPP exceeding 55% of total enrollment. The 2021-22 enacted state budget increased the concentration grant from 50% to 65%. For districts that qualify for concentration grant funds, the additional 15% must be used to increase the number of creden- tialed and/or classified staff who provide direct services to students. The LCFF requires school districts to increase or improve services for unduplicated pupils in proportion to the supplemental and concentration funds they receive relative to base funds. This requirement is known as the minimum proportionality percentage (MPP). Starting in 2021-22, if the increases and improvements in services do not meet the MPP requirement, any unused portion of the supplemental and concentration 2 The term “carryover” refers to unspent funds from one year that are not spent and are thus retained to be spent in the next year. Typically, these are grant funds that are allowed to be carried over. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 11 Findings and Recommendations Multiyear Financial Projection Assumptions grant funds must be identified in the subsequent year’s LCAP and used to provide increased or improved services to unduplicated pupils. For most school districts, LCFF entitlement is funded through a combination of local property taxes and state aid. Property tax revenue is applied first toward the total LCFF entitlement, with the state covering any remaining balance. If a school district’s local property tax revenue meets or exceeds its LCFF entitlement, it is classified as a basic aid or community-funded district. Proposition 30, passed in 2012, temporarily added a quarter-cent sales tax and increased state income tax rates on high-income taxpayers. The sales tax increase expired in 2016, while the income tax increase was initially set to expire in 2018 but was extended through 2030 by Proposition 55. These revenues are deposited into the state’s Education Protection Account (EPA) and are a component of state aid for the LCFF entitlement. EPA revenues are received by all LEAs, including basic aid school districts, which receive a minimum of $200 per ADA in EPA revenues. LCFF Projections School districts are encouraged to use the FCMAT LCFF Calculator for School Districts and Charter Schools to estimate LCFF funding. FCMAT prepared an independent calculation for the district using this tool. Although the district also used the FCMAT LCFF calculator, some assumptions – such as enrollment, ADA and property tax revenues – were updated by FCMAT based on more current information. As a result, FCMAT’s projections for enrollment, ADA, UPP and property tax projections led to LCFF rev- enue projections that differed slightly from those used by the district in its 2025-26 adopted budget. FCMAT’s projections for LCFF revenues are approximately $653,937 higher than the district’s projection in 2025-26, $76,591 higher in 2026-27, and $240,464 lower in 2027-28. This is largely due to the change to the TK add-on rate in the 2025-26 enacted budget which added $2,397 per TK ADA to support lowering the student-to-adult ratio from 12 to 1 to 10 to 1. Federal Revenue FCMAT reviewed, verified, and adjusted federal funding amounts for the base year 2025-26 where pos- sible and appropriate. These adjustments resulted in a total estimated federal revenue of $15,536,883, a decrease of $1,193,857 when compared to the district’s projections. Major budget adjustments include: • Title I: -$555,530. • Title II: +$113,988. • Title III -$147,571. • Title IV: -$606,283. Minor increases were made to federal special education and career technical education programs for a total of $1,539. Caution should be exercised when budgeting federal revenues due to the uncertainty surrounding the fed- eral budget. This is particularly important because the district has allocated federal funding to salaries and benefits in most of its federal programs. In the district’s 2025-26 adopted budget MYFP, federal revenue projections for 2026-27 and 2027-28 remained unchanged from the 2025-26 base year. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 12 Findings and Recommendations Multiyear Financial Projection Assumptions After reviewing historical Every Student Succeeds Act (ESSA) funding revenues and information obtained from interviews with staff, the team maintained federal revenue projections in its MYFP for 2026-27 and 2027-28 at the same levels as FCMAT’s 2025-26 revised budget for the district. Similarly, after updating special education funding for 2025-26, FCMAT assumed no changes to special education revenues for 2026-27 and 2027-28. FCMAT did not include carryover and unearned revenues in the district’s 2025-26 adopted budget and in subsequent years of the projection. The best practice is to regularly update the district’s revenue estimates as entitlement allocations and grant amounts are finalized, ensuring that budgeted revenues align with the most recent funding allocation schedules. Carryover or unearned revenues from prior years should not be included in the current year budget until the prior year unaudited actuals are completed and should be eliminated from the MYFP’s subsequent years. Including estimates of carryover or unearned revenues before those amounts are known may result in overbudgeting and overspending. The district’s practice is in alignment with the best practice and indicated carryover and unearned revenues would be updated at the first interim reporting period. Other State Revenues “Other state revenues” in a school district budget refers to state funding received outside the LCFF allo- cation, such as lottery revenues and grants. These funds often support specific programs and initiatives, including career and technical education and arts and music. Unlike LCFF funding, which provides unre- stricted per-student allocations, other state revenues are typically restricted or categorical, meaning they must be used for designated purposes. Understanding and effectively managing these funds is essential for maximizing resources and ensuring compliance with state funding requirements. Revenues fluctuate throughout the year, requiring school districts to continuously monitor allocations and adjust budgets accordingly. Failure to do so can result in overspending, underuse of grant funds, or expen- ditures exceeding available revenues. In developing its MYFP, FCMAT verified the district’s 2025-26 other state grant award amounts using CDE schedules and grant award letters. These amounts were incorporated into the 2025-26 base year and carried forward to 2026-27 and 2027-28, with COLA applied to select revenues. FCMAT increased the 2025-26 state revenues total by a net $8,834,032. Specifically, FCMAT added $6,061,450 in 2025-26 for new one-time funding sources including $4,495,491 for the Student Support and Professional Development Discretionary Block Grant and $1,565,959 for the Learning Recovery Emergency Block Grant. In addition, other state revenues were increased by $2,508,027 for the following grants: • Literacy Coaches and Reading Specialists: $1,605,392. • Special Education Early Intervention Preschool Grant: $802,635. • Restorative Practices Grant: $100,000. Other increases include $437,636 in Arts and Music in Schools funding, $180,189 in Expanded Learning Opportunities Program funding, and $17,780 in Mental Health-Related Service funding in alignment with the 2025-26 Advance Principal Apportionment exhibit published by CDE after the district’s adoption of the 2025-26 adopted budget; and $331,485 for projected LCFF Equity Multiplier funding. FCMAT decreased the district’s grant eligibility for career technical education grant funding by $1,090,269, removed carryover and unearned revenue of $798,880 in the base year, and reduced the home-to-school transportation reimbursement by $54,227. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 13 Findings and Recommendations Multiyear Financial Projection Assumptions Where applicable, FCMAT carried forward state revenues for 2025-26 into the subsequent fiscal years and adjusted for COLA, enrollment, and ADA projections as appropriate. Mandate Funding The state allocates mandate block grant funds using a per-ADA amount, adjusted by the COLA in subse- quent years, based on the prior year’s P-2 ADA by grade level. The mandate funding projections in the MYFP are based on FCMAT’s P-2 ADA projections. The Mandate Block Grant provides LEAs with funds to support the costs of various mandated programs and activities identified in Government Code (GC) 17581.6(f). School districts can choose to receive this funding or submit a reimbursement claim with the State Controller’s Office. To receive Mandate Block Grant fund- ing, school districts must file an application each year with the CDE. The district’s 2025-26 adopted budget did not include revenue from the Mandate Block Grant; however, the district subsequently opted into the Mandate Block Grant for 2025-26. FCMAT included $717,847 in mandate funding in 2025-26 per the CDE exhibit. Lottery Funding The state allocates lottery funds quarterly using prior-year annual ADA, adjusted by a statewide absence factor of 1.04446. These allocations are further adjusted in the subsequent year based on the district’s final annual ADA. FCMAT projected lottery revenues for 2025-26 and subsequent years based on its annual ADA projections, with a per-ADA rate of $190 for unrestricted funds and $82 for restricted lottery instructional materials per the SSC Dartboard. This resulted in increases of $247,633 in unrestricted lottery revenues and $275,311 in restricted lottery revenues. Other Local Revenue The district receives local revenues from a variety of sources, including leases and rentals, interest earn- ings, donations, SELPA pass-through payments, and other miscellaneous sources. Because these revenues are not guaranteed, they should be budgeted and projected conservatively using historical trends. FCMAT reviewed the district’s budgeted amounts for local revenues for reasonableness using the prior two years’ actual revenues. Based on this analysis, FCMAT increased other local revenue by a net $4,541,013, as detailed below. FCMAT increased the interest earnings by $4,993,594 in 2025-26, based on the prior year’s amount and projected cash balances. These revenues are considered ongoing and are adjusted in the subsequent years of the MYFP according to changes in the interest rate for 10-year treasuries. FCMAT did not include any revenue projections for 2025-26 donations and miscellaneous income because these revenue sources are typically budgeted as the actual donations and miscellaneous income are received. The team used the SELPA’s most recent allocation schedules for 2024-25 and 2025-26 to determine the district’s Special Education revenues, resulting in a reduction of $452,581 for 2025-26. FCMAT kept the 2025-26 leases and rentals budget unchanged after reviewing historical trends. The team assumed the base year’s leases and rentals revenue would continue into the subsequent years of the MYFP. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 14 Findings and Recommendations Multiyear Financial Projection Assumptions Expenditures FCMAT reviewed the district’s 2025-26 adopted budget general fund expenditures budget for reasonable- ness, comparing the base year projections to the prior years’ actual expenditures, reviewing grant agree- ments, conducting staff interviews, and analyzing expenditure and encumbrance activity through June 2025.3 Ongoing costs from the district’s 2025-26 adopted budget are assumed to continue unless other- wise adjusted, as noted below. Salary Budgeting and Position Control The district uses the Galaxy financial system for position control, which integrates with its financial system to manage salaries benefits, and extra pay such as stipends. Costs for extra duty, overtime and substitutes are monitored and changed through budget adjustments in Galaxy outside of position control. FCMAT’s changes to the MYFP align financial data with position control, incorporate information from staff interviews, and reflect other changes not included in budget adoption. In addition, FCMAT analyzed expenditures of unrestricted and restricted salaries over the last four years to develop the final projection. Certificated Salaries FCMAT increased certificated salaries in the MYFP for 2025-26 by $1,473,732. This includes aligning the budget to what is reflected in position control and reviewing the prior year trends in certificated expenses resulting in increases to unrestricted salaries of $823,353, and an increase in restricted salaries of $650,379. Unrestricted salaries adjustments account for six transitional kindergarten teachers, one coun- selor hired after budget adoption as discussed in interviews with staff, and a high school assistant principal vacancy noted by FCMAT on EDJOIN, an educational job site, that was not included in position control or budget. Restricted salary adjustments to salaries include unbudgeted learning recovery emergency block grant (LREBG) expenditures, additional extra duty costs, and a speech and language pathologist vacancy posi- tion posted on EDJOIN, which was not in position control or budget. Salaries increase by 2% in 2026-27 and 2027-28 based on step-and-column data from the district that aligns with the district’s budget adoption assumptions. According to interviews with staff, beginning in 2026-27, two coordinators and two induction teachers will move from Educator Effectiveness Block Grant program funding to the unrestricted general fund; and one literacy coach funded through the Literacy Coaches and Reading Specialist Grant program will move to the unrestricted general fund. These ongo- ing expenses shifted as both grants expire June 30, 2026. Lastly, additional extra duty expenditures were reduced in the A-G Success Grant starting in the 2026-27 fiscal year, as this grant also expires June 30, 2026, and is not ongoing. Classified Salaries Classified salaries in the MYFP for 2025-26 increased by $600,990. This includes a decrease of $121,801 of unrestricted classified salaries to align position control with the budget while including expenses for substi- tute, overtime and vacancy costs based on prior year trends in expenses. 3 The CSAM defines an encumbrance as “a commitment in the form of a purchase order or offer to buy goods or ser- vices.” The encumbrance account in a general ledger tracks open purchase orders to prevent overspending of a budget account. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 15 Findings and Recommendations Multiyear Financial Projection Assumptions Restricted salaries adjustments reflect the addition of a bilingual speech and language pathology assistant vacancy, increasing substitute and overtime costs for paraprofessionals in special education based on prior year spending trends, added overtime and substitute costs for routine and restricted maintenance and adding a project manager funded with local restricted revenue that was not included in the budget, for a total increase of $722,791. Salaries then increase 1% annually in 2026-27 and 2027-28 based on data from the district that aligns with the district’s budget adoption assumptions. Lastly, additional extra hourly expenditures in the A-G Success Grant were removed starting in the 2026-27 fiscal year as the grant expires June 30, 2026, and are not ongoing expenses. Employee Benefits FCMAT increased employee benefit expenditures in the MYFP for 2025-26 by $2,837,207, including $2,130,770 in the unrestricted general fund and $706,437 in the restricted general fund to align with posi- tion control and prior year actuals. Adjustments reflect statutory benefits proportional to the adjusted sal- aries, which include increases for CalSTRS and CalPERS costs and added health and welfare costs for the additional six TK teachers, one counselor, and positions that were not accounted for in the adopted budget yet were included in position control. Health and welfare and statutory benefits proportionally adjust with salary changes in the subsequent years. For the 2026-27 and 2027-28 fiscal years, FCMAT applied a 3.85% increase to health and welfare benefits based on the prior year increase trends over four years. Projections for CalSTRS remain flat in the current and subsequent years at 19.10% each year; however, the CalPERS projection rate changes. It is 26.81% in 2025-26, 26.40% in 2026-27 and 26.90% in 2027-28. Benefits budgeted out of one-time funding sources – the A-G Success Grant and the Educator Effectiveness Block Grant – were reduced starting in 2026-27. Books and Supplies After analyzing prior year expenditures and discussion of funding plans in school site interviews with staff, FCMAT increased unrestricted books and supplies by $146,779 based on prior year trends and increased $1,068,163 in restricted expenditures for the Indian Education Grant and Restorative Practices Grant, and for restricted resources subject to unearned revenue. In fiscal years 2026-27 and 2027-28, CPI adjustments were applied to all books and supplies expenditures and the books and supplies funded out of one-time grants, A-G Success Grant and Educator Effectiveness Block Grant, were reduced starting in 2026-27 as they are not ongoing expenses. Services and Other Operating Expenditures FCMAT increased total services and other operating expenditures in the MYFP for 2025-26 by a net amount of $1,386,077, increasing $512,718 in the unrestricted general fund and $873,359 in the restricted general fund. Adjustments to the 2025-26 unrestricted general fund include an increase in dues and memberships to reflect prior year trends in spending and an additional increase to liability insurance costs. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 16 Findings and Recommendations Multiyear Financial Projection Assumptions Key adjustments to the 2025-26 restricted general fund include increases in professional and consulting services in the following programs: Title I, Title II, After School Education and Safety (ASES), Educator Effectiveness Block Grant, special education and other state grants and a slight increase in direct costs. FCMAT applied CPI to the two subsequent years to both the unrestricted and restricted general fund services and other operating expenses. Expenditures in the Educator Effectiveness Block Grant and the A-G Success Grant were reduced starting in 2026-27 as the grants are due to expire June 30, 2026. Additionally, FCMAT increased expenditures in restricted resources subject to unearned revenue to align and balance with adjusted revenues. Capital Outlay Capital outlay expenditures include land, land improvements, buildings, equipment purchases and replace- ments exceeding a cost threshold established by the LEA. FCMAT increased total capital outlay expendi- tures in the MYFP for 2025-26 by $652,927. This includes an additional $100,000 budgeted for buildings and improvements of buildings and $360,000 for equipment based on prior year trends in spending and a one-time capital expense for transportation that was not included in the budget but discussed in interviews. In restricted capital outlay, FCMAT increased the equipment budget in the one-time funding source, Kitchen Infrastructure and Training Funds, by $192,927 to cover the cost of one-time equipment purchased. FCMAT reduced capital outlay expenditures from the two subsequent years in the unrestricted general fund based on interviews with staff and the district’s current MYFP, but carried forward the capital outlay budget in the restricted general fund in line with equipment and replacement plans and prior year trend spending in the following restricted resources: Routine Restricted Maintenance Account (RRMA), special education, LCFF Equity Multiplier, Perkins Grant, California Technical Education Incentive Grant (CTIEG) and other local restricted grants. Other Outgo/Indirect Costs All programs incur general management costs, commonly known as indirect costs. These costs typically include administrative functions such as accounting, budgeting, payroll, personnel, and purchasing. The CDE establishes the allowable maximum indirect cost rates that school districts can charge for each pro- gram. A school district may charge its approved indirect cost rate unless a specific authority, such as legis- lation, sets a lower limit. Applying the full rate ensures equity, supports management costs and reflects true program expenses. FCMAT applied the district’s CDE-approved rate of 6.19% for 2025-26 resulting in an increase of $4,584,450 to restricted programs. The largest increases occurred in special education, other restricted local and the Routine Restricted Maintenance Account, as indirect costs were not included in the adopted budget. The same indirect rate is applied to the MYFP in 2026-27 and 2027-28. FCMAT increased other outgo expenditures (excluding indirect cost transfers) by $926,780 in the unre- stricted general fund for 2025-26. This reflects prior year trends of expenditures in payments to the county office of education for tuition and excess costs that were not accounted for in the adopted budget and a slight increase in payments to debt services for increased principal payments on leases. The expenditure adjustment for the adopted budget then carried forward into the two subsequent years. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 17 Findings and Recommendations Multiyear Financial Projection Assumptions Other Financing Sources/Uses Interfund – Transfers In Because the district participates in the state’s facilities funding program, it must contribute unrestricted general funds to the restricted maintenance account. The minimum required contribution is 3% of total gen- eral fund expenditures and other financing uses, excluding certain programs. The district transferred $13 million from the Special Reserve for Capital Projects (Fund 40) to the unrestricted general fund in 2025-26 to offset the cost of the 3% required contribution to RRMA. According to district staff, this was a one-time transfer to support the unrestricted general fund. In the subsequent years, the unrestricted general fund will contribute the required 3% contribution to the RRMA without support from Fund 40. Interfund – Transfers Out The district transferred $400,000 from the restricted general fund to the Deferred Maintenance Fund (Fund 14) in 2025-26, a recurring transfer the district has historically made, which FCMAT carried forward in the subsequent years of the projection. Contributions Restricted programs should be financially self-sustaining except for the Routine Restricted Maintenance Account, special education, and other programs the district chooses to support with unrestricted general funds. When revenues in restricted programs do not fully cover program expenditures, the shortfall must be offset by a contribution from the unrestricted general fund to balance the budget. The district’s 2025-26 adopted budget estimates a contribution of $59,231,010 from the unrestricted gen- eral fund to the restricted general fund for various restricted programs. FCMAT adjusted the contribution to balance restricted resources, increasing the contribution by $6,379,348 to a revised total of $65,610,358 for 2025-26 rather than making expenditure reductions. The district should evaluate restricted program expenditures, and where appropriate and feasible, reduce expenditures so that a contribution from the unrestricted general fund is not necessary. As noted earlier in this report, developing MYFPs by resource more accurately projects general fund bal- ances into subsequent years. In the subsequent fiscal years, the district did not increase its contribution; rather, it remained the same as the 2025-26 adopted budget. FCMAT analyzed restricted programs using Projection-Pro and included contributions to restricted program resources of $70,735,989 in 2026-27 and $74,262,933 in 2027-28 when expenditures exceeded revenues. Table 7 summarizes FCMAT’s projected contributions from the unrestricted general fund to restricted resources in 2026-27 and 2027-28. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 18 Findings and Recommendations Multiyear Financial Projection Assumptions Table 7. Contributions from Unrestricted General Fund to Restricted Resources 2026-27 2027-28 Resource Description Contribution Contribution 3010 ESSA: Title I, Part, A, Basic Frants Low-Income and Neglected 888,770 1,072,544 3060 ESSA: Title I, Part C, Migrant Ed (Regular and Summer Program) 17,278 36,352 3061 ESSA: Title I, Migrant Ed Summer Program 5,199 9,789 3182 ESSA: School Improvement Funding for LEAs 363,750 373,353 3310 Special Ed: IDEA Basic Local Assistance Entitlement, Part B, Sec 611 56,345 122,202 3315 Special Ed: IDEA Preschool Grants, Part B, Sec 619 831 1,882 3345 Special Ed: IDEA Preschool Staff Development, Part B, Sec 619 14 29 3550 Strengthening Career and Technical Education for the 21st Century (Perkins V): S 20,134 22,894 4035 ESSA: Title II, Part A, Supporting Effective Instruction 14,588 29,635 4124 ESSA: Title IV, Part B, 21st Century Community Learning Centers Program 22,463 43,820 4127 ESSA: Title IV, Part A, Student Support and Academic Enrichment Grants 639,346 672,255 4201 ESSA: Title III, Immigrant Student Program 57,284 60,264 4203 ESSA: Title III, English Learner Student Program 199,546 221,573 4510 Indian Education 16,618 17,070 5810 Other Restricted Federal 704 1,335 6010 After School Education and Safety (ASES) 188,495 266,987 6211 Literacy Coaches and Reading Specialists Grant Program - 773,186 6271 National Board for Professional Teaching Standards Certification Incentive Program 10,831 11,047 6385 Governor's CTE Initiative: California Partnership Academies 1,124,648 1,147,944 6387 Career Technical Education Incentive Grant Program 1,117,061 1,153,849 6500 Special Education 51,381,234 52,738,179 6546 Mental Health-Related Services 542,770 535,646 7010 Agricultural Career Technical Education Incentive 210 418 7220 California Partnership Academies Program 840,955 863,478 7435 Learning Recovery Emergency Block Grant - 10,847 7810 Other Restricted State 196,003 200,172 8150 Ongoing & Major Maintenance Account 13,030,912 13,876,186 Total 70,735,989 74,262,933 Source: FCMAT’s MYFP. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 19 Findings and Recommendations Multiyear Financial Projection Analysis Multiyear Financial Projection Analysis The primary purpose of an MYFP is to evaluate a school district’s long-term financial stability. When devel- oping an MYFP, a school district uses current budget assumptions to project revenues and expenditures over several years to determine whether it can maintain a balanced budget and meet the state-required minimum reserve for economic uncertainties in the current year and the two subsequent fiscal years. Unrestricted General Fund Unrestricted general funds may be used for any educational purpose, providing school districts with the flexibility to support operations and priorities. FCMAT analyzed the district’s unrestricted general fund reve- nues and expenditure categories by resource for 2025-26 and the two subsequent fiscal years, as summa- rized in Table 8 below. In 2025-26, deficit spending in the unrestricted general fund of $14,865,265 is projected. A structural defi- cit continues into the two subsequent years with deficits of $25,625,430 and $29,292,414 in 2026-27 and 2027-28 respectively. An ongoing structural deficit in the unrestricted general fund threatens the district’s long-term fiscal health. Ongoing deficit spending depletes reserves, limits financial flexibility, and increases the risk of insolvency if corrective actions are not taken promptly. The district is projected to meet the minimum reserve requirement for economic uncertainties in 2025-26 and 2026-27 but will fall short of meeting the minimum reserve requirement in 2027-28 by $3,644,879. Table 8. FCMAT Unrestricted General Fund Summary, 2025-26 – 2027-28 Adjusted Object Base Year Year 2 Year 3 Description Code 2025-26 2026-27 2027-28 A. Revenues LCFF Sources 8010-8099 245,861,160 249,383,460 253,725,181 Federal Revenue 8100-8299 - - - Other State Revenues 8300-8599 10,200,762 10,369,748 10,586,596 Other Local Revenues 8600-8799 5,623,594 5,449,883 5,499,513 Other Financing Sources - Transfers In 8900-8929 13,000,000 - - Contributions 8980-8999 (65,610,358) (70,735,989) (74,262,933) Total, Revenue 209,075,158 194,467,102 195,548,357 B. Expenditures Certificated Salaries 1000-1999 95,591,277 98,229,917 100,194,515 Classified Salaries 2000-2999 36,622,422 36,988,646 37,358,533 Employee Benefits 3000-3999 66,979,105 64,322,376 66,108,065 Books and Supplies 4000-4999 9,090,084 9,346,424 9,600,647 Services and Other Operating Expenditures 5000-5999 21,692,257 18,285,408 18,827,775 Capital Outlay 6000-6999 936,162 - - Other Outgo (excluding Transfers of Indirect 7100-7299 Costs) 7400-7499 1,847,438 1,820,658 1,820,658 Other Outgo - Transfers of Indirect Costs 7300-7399 (8,818,321) (8,900,897) (9,069,423) Other Financing Uses - Transfers Out 7600-7629 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 20 Findings and Recommendations Multiyear Financial Projection Analysis Adjusted Object Base Year Year 2 Year 3 Description Code 2025-26 2026-27 2027-28 Total, Expenditures 223,940,424 220,092,533 224,840,770 C. Net Increase (Decrease) in Fund Balance (14,865,266) (25,625,430) (29,292,413) D. Fund Balance Beginning Fund Balance, July 1 9791 77,415,137 62,549,872 36,924,441 Audit Adjustments 9793 - - - Adjusted Beginning Balance 77,415,137 62,549,872 36,924,441 Ending Fund Balance, June 30 62,549,872 36,924,441 7,632,028 Components of Ending Fund Balance Nonspendable 9710-9719 - - - Restricted 9740 - - - Committed Stabilization Arrangements 9750 48,772,997 - - Other Commitments 9760 - - - Assigned 9780 - - - Unassigned/Unappropriated Reserve for Economic Uncertainties 9789 11,162,065 11,045,238 11,276,907 Unassigned/Unappropriated 9790 2,614,809 25,879,203 (3,644,879) Source: FCMAT’s MYFP. Restricted General Fund Restricted funds are dollars designated for specific purposes, as mandated by law, external funding sources, or grant requirements. These funds must be spent only on the programs or activities for which they were allocated and cannot be used for general operating expenses unless allowable. FCMAT analyzed all general fund restricted sources and expenditure categories by resource for 2025-26 and the two subsequent fiscal years. Based on current assumptions, the district is projected to end 2025- 26 with a restricted fund balance of $51,654,172. FCMAT’s MYFP forecasts this balance will decline to $47,031,152 in 2026-27 and $42,816,774 in 2027-28. FCMAT moved one literacy coach out of the Literacy Coaches and Reading Specialist Grant program to the unrestricted general fund starting in 2026-27. Expenditures for this program were carried forward in the two subsequent years to spend down the remaining grant balance. The Educator Effectiveness Block Grant program ends in 2025-26; two induction teachers and two coordinators will shift to the unrestricted gen- eral fund in 2026-27 as per the district’s plan discussed with staff in fieldwork interviews. The A-G Success Grant, expiring in June 2026, funds one-time expenses in 2025-26 which do not carry forward into subse- quent years. As of the date of fieldwork, the district did not have budgeted expenditures in the Arts, Music and Instructional Materials Discretionary Block Grant in 2025-26. However, as discussed with staff in inter- views, the district plans to fully expend the grant prior to its expiration on June 30, 2026. FCMAT budgeted the remaining balance in materials and supplies in the 2025-26 fiscal year to account for this. The district received two new one-time funding sources: Student Support and Professional Development Discretionary Block Grant and additional Learning Recovery Emergency Block Grant funds. FCMAT Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 21 Findings and Recommendations Multiyear Financial Projection Analysis included both restricted revenues and designated remaining balances in the restricted ending fund balance for future planning. Adjustments to the 2025-26 adopted budget and subsequent years’ restricted programs caused expendi- tures to exceed projected revenues in certain programs. Because restricted programs must follow specific spending guidelines, instead of reducing nonsalary accounts such as materials, services, and capital outlay, FCMAT increased the unrestricted contribution to balance the programs. In cases where FCMAT adjusted restricted federal grant revenue in alignment with the most recent entitlement information from CDE for resources subject to unearned revenue, FCMAT increased expenditures to balance revenue and expendi- tures in those resources. FCMAT recommends that the district evaluate each program and reduce expendi- tures to remain within the resources of the program. Table 9 summarizes FCMAT’s analysis of the district’s restricted general fund resources for 2025-26 and the two subsequent fiscal years. Table 9. FCMAT Restricted General Fund Summary, 2025-26 – 2027-28 Adjusted Object Base Year Year 2 Year 3 Description Code 2025-26 2026-27 2027-28 A. Revenues LCFF Sources 8010-8099 - - - Federal Revenue 8100-8299 15,536,883 15,168,389 15,168,389 Other State Revenues 8300-8599 52,416,653 44,385,552 44,570,802 Other Local Revenues 8600-8799 13,498,625 13,169,120 12,839,615 Other Financing Sources - Transfers In 8900-8929 - - - Contributions 8980-8999 65,610,358 70,735,989 74,262,933 Total, Revenue 147,062,519 143,459,050 146,841,739 B. Expenditures Certificated Salaries 1000-1999 36,955,612 36,901,995 37,640,035 Classified Salaries 2000-2999 20,222,329 20,422,532 20,626,758 Employee Benefits 3000-3999 43,210,701 43,611,598 44,504,773 Books and Supplies 4000-4999 13,368,846 12,597,122 12,940,945 Services and Other Operating Expenditures 5000-5999 23,945,640 24,268,598 24,883,036 Capital Outlay 6000-6999 2,000,665 1,820,146 1,832,452 7100-7299 Other Outgo (excluding Transfers of Indirect Costs) 7400-7499 500,000 500,000 500,000 Other Outgo - Transfers of Indirect Costs 7300-7399 7,524,628 7,560,079 7,728,120 Other Financing Uses - Transfers Out 7600-7629 400,000 400,000 400,000 Total, Expenditures 148,128,421 148,082,070 151,056,118 C. Net Increase (Decrease) in Fund Balance (1,065,902) (4,623,020) (4,214,379) D. Fund Balance Beginning Fund Balance, July 1 9791 52,720,074 51,654,172 47,031,152 Audit Adjustments 9793 - - - Adjusted Beginning Balance 52,720,074 51,654,172 47,031,152 Ending Fund Balance, June 30 51,654,172 47,031,152 42,816,774 Components of Ending Fund Balance Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 22 Findings and Recommendations Multiyear Financial Projection Analysis Adjusted Object Base Year Year 2 Year 3 Description Code 2025-26 2026-27 2027-28 Nonspendable 9710-9719 - - - Restricted 9740 51,654,172 47,031,152 42,816,774 Expanded Learning Opportunities Program 18,390,247 18,161,639 17,493,079 Student Support and Professional Development Discretionary Block Grant 4,495,491 4,495,491 4,495,491 Literacy Coaches and Reading Specialists Grant Program 3,267,474 1,269,810 - Lottery Instructional Materials 733,864 963,503 1,150,658 CA Community Schools Partnership Act 1,113,248 899,456 682,591 Golden State Pathways Program 3,881,400 2,474,406 1,036,814 Special Education Early Intervention Preschool Grant 2,244,771 1,736,124 1,250,055 Arts and Music in Schools (Prop 28) 5,758,596 7,515,691 9,348,603 Classified School Employee Professional Development Block Grant 16,535 16,535 16,535 LCFF Equity Multiplier 718,881 972,116 1,236,758 Learning Recovery Emergency Block Grant 1,056,876 530,861 - Ongoing & Major Maintenance Account (RRMA) 541,316 19,817 40,310 Other Local 9,435,472 7,975,703 6,065,879 Source: FCMAT’s MYFP. Combined General Fund Table 10 summarizes FCMAT’s analysis of the district’s combined general fund resources for 2025-26 and the two subsequent fiscal years. Table 10. FCMAT Combined General Fund Summary, 2025-26 – 2027-28 Adjusted Object Base Year Year 2 Year 3 Description Code 2025-26 2026-27 2027-28 A. Revenues LCFF Sources 8010-8099 245,861,160 249,383,460 253,725,181 Federal Revenue 8100-8299 15,536,883 15,168,389 15,168,389 Other State Revenues 8300-8599 62,617,415 54,755,301 55,157,398 Other Local Revenues 8600-8799 19,122,219 18,619,003 18,339,128 Other Financing Sources - Transfers In 8900-8929 13,000,000 - - Contributions 8980-8999 - - - Total, Revenue 356,137,677 337,926,153 342,390,096 B. Expenditures Certificated Salaries 1000-1999 132,546,889 135,131,912 137,834,550 Classified Salaries 2000-2999 56,844,751 57,411,179 57,985,290 Employee Benefits 3000-3999 110,189,806 107,933,974 110,612,838 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 23 Findings and Recommendations Multiyear Financial Projection Analysis Adjusted Object Base Year Year 2 Year 3 Description Code 2025-26 2026-27 2027-28 Books and Supplies 4000-4999 22,458,930 21,943,546 22,541,592 Services and Other Operating Expenditures 5000-5999 45,637,897 42,554,007 43,710,811 Capital Outlay 6000-6999 2,936,827 1,820,146 1,832,452 Other Outgo (excluding Transfers of Indirect 7100-7299 Costs) 7400-7499 2,347,438 2,320,658 2,320,658 Other Outgo - Transfers of Indirect Costs 7300-7399 (1,293,694) (1,340,818) (1,341,303) Other Financing Uses - Transfers Out 7600-7629 400,000 400,000 400,000 Total, Expenditures 372,068,844 368,174,603 375,896,888 C. Net Increase (Decrease) in Fund Balance (15,931,167) (30,248,450) (33,506,792) D. Fund Balance Beginning Fund Balance, July 1 9791 130,135,211 114,204,044 83,955,593 Audit Adjustments 9793 - - - Adjusted Beginning Balance 130,135,211 114,204,044 83,955,593 Ending Fund Balance, June 30 114,204,044 83,955,594 50,448,801 Components of Ending Fund Balance Nonspendable 9710-9719 - - - Restricted 9740 51,654,172 47,031,152 42,816,774 Committed Stabilization Arrangements 9750 48,772,997 - - Other Commitments 9760 - - - Assigned 9780 - - - Unassigned/Unappropriated Reserve for Economic Uncertainties 9789 11,162,065 11,045,238 11,276,907 Unassigned/Unappropriated 9790 2,614,809 25,879,203 (3,644,879) Total Available Reserves 62,549,872 36,924,441 7,632,028 Total Available Reserves as Percentage of Total Expenditures and Uses 16.81% 10.03% 2.03% Source: FCMAT’s MYFP. Reserve for Economic Uncertainties All California school districts are required to maintain a minimum reserve for economic uncertainties. This reserve is determined on a sliding scale based on school district size. For Coachella Valley USD, the min- imum required reserve is 3% of total expenditures and other financing uses, or $11,162,065 in 2025-26, $11,045,238 in 2026-27, and $11,276,907 in 2027-28. The district meets the minimum reserve requirement in 2025-26 and 2026-27; however, the district’s available reserves in 2027-28 of $7,632,028 does not meet the minimum reserve requirement with a shortfall of $3,644,879. Table 11 shows the district’s total reserve calculations, inclusive of the minimum reserve requirement. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 24 Findings and Recommendations Multiyear Financial Projection Analysis Table 11. District Reserve Calculations, 2025-26 – 2027-28 Description 2025-26 2026-27 2027-28 Available Reserves, by Amount 62,549,872 36,924,441 7,632,028 Available Reserves, by Percent 16.81% 10.03% 2.03% Reserve Standard Reserve Standard Percentage Level 3.00% 3.00% 3.00% Available Reserves Meet Reserves Standard Met Met Not Met Difference or Shortfall - - $ (3,644,879) Source: FCMAT’s MYFP. Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 25 Findings and Recommendations Cash Flow Cash Flow The purpose of performing a cash flow projection is to identify whether a district has a temporary cash flow shortage to develop local solutions or identify if there are unresolvable cash flow shortages. Insolvency occurs when a school district has exhausted both its cash and borrowing capacity and can no longer meet its financial obligations, primarily employee payroll. FCMAT used the Projection-Pro cash flow projection component to develop its projection. Projection-Pro incorporates the best practice of linking the cash flow to the multiyear projection to ensure all activities are included. It also projects using differing levels of detail. For example, the best practice is to project reve- nues at the resource-object level because the source of the revenue generally determines cash inflows. In contrast, best practice projects expenditures at the major object category because the district processes and payment schedules determine cash outflows. The tool also allows customization for special schedules that do not align with the account code structure. For example, the state’s on-behalf pension expenses are not identifiable by its own resource-object combination and could negatively affect cash flow projections if an appropriate schedule is not applied. FCMAT’s cash flow projection is based on the best practices as described above, including FCMAT’s updated multiyear projection, to develop a reasonable cash flow and identify any temporary cash flow issues. The district estimated a beginning cash balance of $138,488,282 in the 2025-26 adopted budget. FCMAT’s cash flow projection for 2025-26 estimates a beginning cash balance of $159,279,570 on July 1, 2025, per the district’s 2024-25 unaudited actuals, the most current information available. By July 2026, FCMAT projects the district’s cash balance will decline to $136,425,224. The lowest projected cash balance occurs in November 2026, with a $92,293,733 balance. Overall, the district maintains stable cash balances. These projections are based on the best information available at the time of this report. Table 12 below shows the district’s projected monthly ending cash balances for the 2025-26 fiscal year. Table 12 Figure 12. District Projected Ending Cash Balances by Month, 2025-26 Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 26 Findings and Recommendations Appendix Appendix A: Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 27 Findings and Recommendations Appendix A — Study Agreement Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 28 Findings and Recommendations Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 29 Findings and Recommendations Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 30 Findings and Recommendations Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 31 Findings and Recommendations Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 32 Findings and Recommendations Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 33 Findings and Recommendations Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 34 Findings and Recommendations Digitally signed by Michael H. Fine Michael H. Fine Date: 2025.08.06 08:36:57 -07'00' Fiscal Crisis and Management Assistance Team Coachella Valley Unified School District 35