Duarte Unified School District Report

Fiscal Health Risk Analysis September 25, 2024 Duarte Unified School District Michael H. Fine Chief Executive Officer September 25, 2024 Nadia Hillman, Ed.D., Superintendent Duarte Unified School District 1620 Huntington Dr. Duarte, CA 91010 Dear Superintendent Hillman: In June 2024, the Duarte Unified School District and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for FCMAT to conduct a Fiscal Health Risk Analysis. 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 fiscal health risk analysis is required by California’s 2018-19 Budget Act because the district has been designated as a lack of going concern pursuant to EC 42127.6(a)(1)(A) and (a)(2) by the county superinten- dent of schools. This report contains the fiscal health risk analysis report with the study team’s findings and recommendations. FCMAT appreciates the opportunity to assist the Duarte 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 Fiscal Health Risk Analysis Contents About FCMAT ..................................................................................................3 Introduction ......................................................................................................5 Background ...............................................................................................................5 Fiscal Health Risk Analysis Guidelines ...............................................................5 Study Team ................................................................................................................6 Fiscal Health Risk Analysis .......................................................................... 7 Summary .................................................................................................................... 7 About the Analysis ...................................................................................................8 Areas of High Risk....................................................................................................8 Budget and Fiscal Status ....................................................................................................8 Material Weakness Questions ...........................................................................................8 Score Breakdown by Section ................................................................................9 Fiscal Health Risk Analysis Questions ................................................................11 Budget and Fiscal Status: ..........................................................................................................11 Annual Independent Audit Report ...................................................................................11 Budget Development and Adoption ..............................................................................12 Budget Monitoring and Updates .....................................................................................13 Cash Management ..............................................................................................................14 Charter Schools ...................................................................................................................14 Collective Bargaining Agreements .................................................................................14 Contributions and Transfers .............................................................................................16 Deficit Spending (Unrestricted General Fund) ............................................................16 Employee Benefits ..............................................................................................................16 Fiscal Crisis and Management Assistance Team Duarte Unified School District 1 Fiscal Health Risk Analysis Enrollment and Attendance ...............................................................................................17 Facilities .................................................................................................................................18 Fund Balance and Reserve for Economic Uncertainty ..............................................19 General Fund – Current Year ...........................................................................................19 Information Systems and Data Management .............................................................20 Internal Controls and Fraud Prevention ........................................................................21 Leadership and Stability ...................................................................................................22 Multiyear Projections .........................................................................................................22 Non-Voter-Approved Debt and Risk Management ...................................................23 Position Control ..................................................................................................................23 Special Education ................................................................................................................24 Risk Score, 20 numbered sections only ....................................................24 District Fiscal Solvency Risk Level, all FHRA factors ....................................24 Appendix ...................................................................................................25 Study Agreement ...............................................................................................................26 Fiscal Crisis and Management Assistance Team Duarte Unified School District 2 Fiscal Health Risk Analysis About FCMAT FCMAT’s primary mission is to assist California’s local TK-14 educational agencies to identify, prevent, and resolve financial, human resources and data management challenges. FCMAT provides fiscal and data management assistance, professional development training, product development and other related school business and data services. FCMAT’s fiscal and management assistance services are used not just to help avert fiscal crisis, but to promote sound financial practices, support the training and development of chief business officials and help to create efficient organizational operations. FCMAT’s data management services are used to help local educational agencies (LEAs) meet state reporting responsibilities, improve data quality, and inform instructional program decisions. FCMAT may be requested to provide fiscal crisis or management assistance by a school district, charter school, community college, county office of education, the state superintendent of public instruction, or the Legislature. When a request or assignment is received, FCMAT assembles a study team that works closely with the LEA to define the scope of work, conduct on-site fieldwork and provide a written report with findings and recommendations to help resolve issues, overcome challenges and plan for the future. 90 80 70 60 50 40 30 20 10 0 FCMAT has continued to make adjustments in the types of support provided based on the changing dynamics of TK-14 LEAs and the implementation of major educational reforms. FCMAT also develops and provides numerous publications, software tools, workshops and professional learning opportunities to help LEAs operate more effectively and fulfill their fiscal oversight and data management responsibilities. The California School Information Services (CSIS) division of FCMAT assists the California Department of Education with the implementation of the California Longitudinal Pupil Achievement Data System (CALPADS). CSIS also hosts and maintains the Ed-Data website (www.ed-data.org) and provides technical expertise to the Ed-Data partnership: the California Department of Education, EdSource and FCMAT. FCMAT was created by Assembly Bill (AB) 1200 in 1991 to assist LEAs to meet and sustain their financial obligations. AB 107 in 1997 charged FCMAT with responsibility for CSIS and its statewide data management work. AB 1115 in 1999 codified CSIS’ mission. AB 1200 is also a statewide plan for county offices of education and school districts to work together locally to improve fiscal procedures and accountability standards. AB 2756 (2004) provides specific responsibilities to FCMAT with regard to districts that have received emergency state loans. In January 2006, Senate Bill 430 (charter schools) and AB 1366 (community colleges) became law and expanded FCMAT’s services to those types of LEAs. On September 17, 2018 AB 1840 was signed into law. This legislation changed how fiscally insolvent districts are administered once an emergency appropriation has been made, shifting the former state-centric system to be more consistent with the principles of local control, and providing new responsibilities to FCMAT associated with the process. Fiscal Crisis and Management Assistance Team Duarte Unified School District 3 seidutS fo rebmuN Studies by Fiscal Year 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 Fiscal Health Risk Analysis Since 1992, FCMAT has been engaged to perform more than 1,400 reviews for LEAs, including school districts, county offices of education, charter schools and community colleges. The Kern County Superintendent of Schools is the administrative agent for FCMAT. The team is led by Michael H. Fine, Chief Executive Officer, with funding derived through appropriations in the state budget and a modest fee sched- ule for charges to requesting agencies. Fiscal Crisis and Management Assistance Team Duarte Unified School District 4 Fiscal Health Risk Analysis Introduction Background Historically, FCMAT has not engaged directly with school districts showing distress until it has been invited to do so by the district or the county superintendent. The state’s 2018-19 Budget Act provides for FCMAT to offer more proactive and preventive services to fiscally distressed school districts by automatically engaging with a district under the following conditions: • 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. Under these conditions, FCMAT will perform a fiscal health risk analysis to determine the level of risk for insolvency. FCMAT has updated its Fiscal Health Risk Analysis (FHRA) tool that weighs each question based on high, moderate and low risk. The analysis will not be performed more than once in a 12-month period per district, and the engagement will be coordinated with the county superintendent and build on their oversight process and activities already in place per Assembly Bill (AB) 1200. There is no cost to the county superintendent or to the district for the analysis. This fiscal health risk analysis is being conducted because the district had the following condition(s), under which an analysis is required by the 2018-19 State Budget Act. • Lack of going concern designation. According to data from the California Department of Education (CDE), the Duarte Unified School District had enrollment of 2,980 TK-grade 12 students for the 2023-24 school year in four elementary schools, one high school and one alternative high school. In addition, the district has three charter schools that served an additional 4,485 students. Governed by a five-member board representing distinct trustee areas, the district serves the cities of Duarte and Bradbury as well as the adjacent unincorporated areas of Duarte and Monrovia. According to the 2023-24 second interim report, the district’s revenues total $61,963,835 and expenses total $60,377,825. The district projected general fund year end balances of $14,593,450 in restricted funds, $7,700,835 in committed funds, and a reserve for economic uncertainty of $1,811,340, which meets the minimum reserve of 3% required by the Criteria and Standards as set pursuant to EC 33127. FCMAT performed a fiscal health risk analysis to determine the district’s level of risk for insolvency. The analysis is based on the district’s 2023-24 second interim report and the conditions that existed at that time. Fiscal Health Risk Analysis Guidelines FCMAT entered into a study agreement with the district on June 05, 2024, and the FCMAT study team visited the district June 25 through 27, 2024, to conduct interviews, collect data and review documents. Following fieldwork, the study team continued to receive, review and analyze documents. This report is the result of those activities. FCMAT’s reports focus on systems and processes that may need improvement; it does not generally comment on those that may be functioning well. In writing its reports, FCMAT uses the Associated Press Stylebook and its own short, internal style guide, which emphasize plain language, capitalize relatively few terms, and strive for conciseness, clarity and simplicity. Fiscal Crisis and Management Assistance Team Duarte Unified School District 5 Fiscal Health Risk Analysis Study Team The team was composed of the following members: John F Von Flue Jennifer Nerat Chief Analyst Intervention Specialist Leonel Martínez 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 Duarte Unified School District 6 Fiscal Health Risk Analysis Fiscal Health Risk Analysis For K-12 School Districts Date(s) of fieldwork: June 25-27, 2024 District: Duarte Unified School District Summary On April 25, 2024, the Los Angeles County Office of Education (LACOE) designated the Duarte Unified School District as a lack of going concern, citing a steadily increasing risk for fiscal insolvency. This designation triggered FCMAT to perform a Fiscal Health Risk Analysis. Over the last three fiscal years, LACOE repeatedly requested that the district address deficit spending and unallocated expenditure reductions which put the district at risk of insolvency. As of the 2023-24 second interim report, the issues remain unresolved because the district has not adopted and implemented a plan to effectively reduce or eliminate deficit spending. Based on its multiyear financial projection, if expenditure reductions are not implemented, the district’s unrestricted fund balance will be negative in 2025-26. The district has been declining in enrollment, experiencing a decrease of 570 students since the 2018-19 school year. As the most significant component driving the district’s operational revenue, the decline has hindered the district’s revenue growth. Contributing to this, FCMAT found no evidence that the district actively monitors and analyzes its enrollment. This failure to ensure accurate reporting and maximize attendance could result in lost revenues and inaccurate adjustments to services; in the district’s case, inadequate reductions of services consistent with its declining enrollment. FCMAT found concerns with the district’s budget monitoring and updating. The district’s second interim presentation lacks detail and clarity in the assumptions used to develop and update the budget. The district’s 2023-24 second interim report showed variances greater than 5% in several areas of both revenue and expenditure; the 2022-23 audit noted that the realized expenditures were in excess of the approved budget. Inadequate revenue projections and lack of expenditure controls can affect the district’s fiscal status, creating uncertainty and eroding the credibility of governance and administration. There are also concerns about the management of employee costs. Given that employee compensation and benefits make up the majority of the district’s operating budget, closely monitoring the staffing budget is crucial. The human resources, business and payroll departments do not meet regularly with each other, which can lead to gaps in communication. No evidence was provided that the district follows collectively-bargained staffing ratios, which leads to overstaffing during declining enrollment. Further, the district settled with its collective bargaining groups and management for compensation increases that were greater than the funded cost-of-living adjustment increases for the 2021-22, 2022-23, and 2023-24 fiscal years. The district analyzed the agreements’ fiscal impact; however, the district was vague in identifying the funds and adjustments needed to make these agreements affordable. In its 2023-24 second interim report, the district projected to deficit spend by approximately $7 million in the unrestricted general fund in 2024-25 and by almost $9 million* in 2025-26. To recognize and address its fiscal instability, the district has developed and adopted several budget stabilization plans represented by a $8.12 million reduction in the multiyear projection. The budget stabilization plans were not actionable because they required changes that necessitate collective bargaining and other cost reductions that are out of the district’s control. The district lacks a viable plan necessary to implement the $8.12 million reduction that was included in its projections. Without the adoption and implementation of a feasible fiscal solvency plan, the district faces continued deficit spending and the potential for insolvency in the foreseeable future. The responsibility for correcting the district’s fiscal direction lies with the district’s board and management. The governing board is ultimately responsible for the district’s fiscal solvency. Management has the responsibility of presenting sound financial information based on current and accurate data so the board can make informed decisions. The failure of the district to act decisively on accurate information may result in fiscal insolvency and the loss of local control. *$9 million includes the $828,873 deficit reported plus the $8.12 million undefined reduction. District Fiscal Solvency Risk Level: High Fiscal Crisis and Management Assistance Team Duarte Unified School District 7 Fiscal Health Risk Analysis About the Analysis The Fiscal Crisis and Management Assistance Team (FCMAT) has developed the Fiscal Health Risk Analysis (FHRA) as a tool to help evaluate a school district’s fiscal health and risk of insolvency in the current and two subsequent fiscal years. The FHRA includes 20 sections, each of which contains specific questions. Each section and specific question is included based on FCMAT’s work since the inception of AB 1200; they are the common indicators of risk or potential insolvency for districts that have neared insolvency and needed assistance from outside agencies. Each section of this analysis is critical, and a lack of attention to these critical areas will eventually contribute to the deterioration of a district’s fiscal health. The analysis focuses on essential functions and processes to determine the level of risk at the time of assessment. The greater the number of “no” answers to the questions in the analysis, the greater the potential risk of insolvency or fiscal issues for the district. Not all sections in the analysis and not all questions within each section carry equal weight; some areas carry higher risk and thus count more heavily in calculating a district’s fiscal stability score. To help the district, narratives are included for responses that are marked as a “no” so the district can better understand the reason for the response and actions that may be needed to obtain a “yes” answer. Identifying issues early is the key to maintaining fiscal health. Diligent planning will enable a district to better understand its financial objectives and strategies to sustain a high level of fiscal efficiency and overall solvency. A district should consider completing the FHRA annually to assess its own fiscal health risk and progress over time. Areas of High Risk The following sections duplicate certain questions and answers given in the Fiscal Health Risk Analysis Questions later in this document and identify conditions that create significant risk of fiscal insolvency. The existence of an identified budget or fiscal status or a material weakness indicated by a “no” answer to any of these items supersedes all other scoring and will elevate the district’s overall risk level. Budget and Fiscal Status Is the 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 its county office of education in the current and two prior fiscal years? ✓ ☐ ☐ 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 Education Code Section 42142? ✓ ☐ ☐ 3 6 Has the district addressed any deficiencies the county office of education has identified in its oversight letters 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? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 8 Fiscal Health Risk Analysis 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 address 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 Education Code Section 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 them in its budget and multiyear projections? ☐ ✓ ☐ 6 4 Did the district conduct a presettlement analysis and identify related costs or savings, if any (e g , statutory benefits, and step and column salary increase), for the current and subsequent years, and did it identify ongoing revenue sources or expenditure reductions to support the agreement? ☐ ✓ ☐ 7 2 If the district has deficit spending in funds other than the general fund, has it included in its multiyear projection any 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 6 Are the district’s enrollment projections and assumptions based on historical data, industry-standard methods, and other reasonable considerations? ☐ ✓ ☐ 11 2 Does the district have sufficient and available capital outlay and/or bond funds to cover all contracted obligations for capital facilities projects? ✓ ☐ ☐ 12 1 Is the district able to maintain the minimum reserve for economic uncertainty in the current year (including Fund 01 and Fund 17) as defined by criteria and standards? ✓ ☐ ☐ 12 2 Is the district able to maintain the minimum reserve for economic uncertainty in the two subsequent years? ☐ ✓ ☐ 12 3 If the district is not able to maintain the minimum reserve for economic uncertainty, does the district’s multiyear financial projection include a board-approved plan to restore the reserve? ✓ ☐ ☐ 19 1 Does the district account for all positions and costs? ✓ ☐ ☐ Score Breakdown by Section Because the score is not calculated by category, category values provided are subject to minor rounding error and are provided for information only. 1. Annual Independent Audit Report 0.4% 2. Budget Development and Adoption 1.4% 3. Budget Monitoring and Updates 3.9% 4. Cash Management 1.0% 5. Charter Schools 0.0% 6. Collective Bargaining Agreements 2.9% 7. Contributions and Transfers 1.0% 8. Deficit Spending (Unrestricted General Fund) 2.0% 9. Employee Benefits 0.6% Fiscal Crisis and Management Assistance Team Duarte Unified School District 9 Fiscal Health Risk Analysis 10. Enrollment and Attendance 3.5% 11. Facilities 0.2% 12. Fund Balance and Reserve for Economic Uncertainty 2.0% 13. General Fund - Current Year 0.8% 14. Information Systems and Data Management 1.0% 15. Internal Controls and Fraud Prevention 1.4% 16. Leadership and Stability 1.6% 17. Multiyear Projections 2.0% 18. Non-Voter-Approved Debt and Risk Management 0.0% 19. Position Control 2.5% 20. Special Education 0.7% Score 28 8% Fiscal Crisis and Management Assistance Team Duarte Unified School District 10 Fiscal Health Risk Analysis Fiscal Health Risk Analysis Questions Budget and Fiscal Status Is the 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 ☐ ✓ 1. Annual Independent Audit Report Yes No N/A 1 1 Has the district corrected the most recent and prior two years’ audit findings without affecting its fiscal health? ☐ ✓ ☐ Finding #2023-002 of the 2022-23 audit identified attendance reporting issues for independent study attendance, resulting in the overstatement of attendance and disallowance of $14,938 in revenue. 1 2 Has the audit report for the most recent fiscal year been completed and presented to the board within the statutory timeline? (Extensions of the timeline granted by the State Controller’s Office should be explained ) ☐ ✓ ☐ EC 41020(h)(1) states, “not later than December 15, a report of each local educational agency audit for the preceding fiscal year shall be filed with the county superintendent of schools of the county in which the local educational agency is located, the department, and the Controller.” EC 41020.3 requires that by January 31, the governing body of the local educational agency shall review the audit for the prior fiscal year. The Annual Financial Audit Report for fiscal year ending June 2023 was presented to the board on June 27, 2024. Finding #2023-001 of the 2022-23 audit report states that the district could not provide all the necessary documents before the December 15 deadline. Similarly, the Annual Financial Audit Report for fiscal year ending June 2022 was not presented to the board until August 17, 2023. No explanation was given for this delay. 1 3 Were the district’s most recent and prior two audit reports free of findings of material weaknesses? ☐ ✓ ☐ The 2021-22 audit noted material weakness audit findings regarding year-end closing entries, lack of supporting documentation for federal award reports, and inadequate procedures to ensure equitable services in private schools as required for COVID-19 funds. The 2020-21 audit identified material weaknesses in internal controls in financial reporting and federal program compliance. Fiscal Crisis and Management Assistance Team Duarte Unified School District 11 Fiscal Health Risk Analysis 1 4 Has the district corrected all reported audit findings from the most recent and prior two audits? ✓ ☐ ☐ 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 office of education instructions, and have been clearly articulated? ✓ ☐ ☐ 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 review of prior year estimated actuals by major object code and removal of one-time revenues and expenses? ✓ ☐ ☐ 2 3 Does the district use position control data for budget development? ✓ ☐ ☐ 2 4 Does the district calculate the Local Control Funding Formula (LCFF) revenue correctly? ✓ ☐ ☐ 2 5 Has the district’s budget been approved unconditionally by its county office of education 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’s restricted ending fund balances have increased over the three previous years. Staff indicated the district has been at risk of forfeiting funds due to its inability to expend restricted resources before program funding expires. 2 8 Have the Local Control and Accountability Plan (LCAP) and the budget been adopted within statutory timelines established by Education Code Sections 42103 and 52062 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 one prior fiscal year? ✓ ☐ ☐ 2 9 Has the district refrained from including carryover funds in its adopted budget? ✓ ☐ ☐ 2 10 Other than objects in the 5700s and 7300s and appropriate abatements in accordance with the California School Accounting Manual, does the district avoid using negative or contra expenditure accounts? ✓ ☐ ☐ 2 11 Does the district have a documented policy and/or procedure for evaluating the proposed acceptance of grants and other types of restricted funds and the potential multiyear impact on the district’s unrestricted general fund? ☐ ✓ ☐ The district’s board policy (BP) 3290 broadly addresses gifts, grants and bequests; however, it does not establish a procedure for staff to follow when evaluating the acceptance of funding from grant sources nor were procedures provided by district staff to FCMAT. Fiscal Crisis and Management Assistance Team Duarte Unified School District 12 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/departments responsible for completing them? ☐ ✓ ☐ The district did not provide FCMAT with a budget calendar or any evidence that staff members/departments adhere to a written one that clearly delineates a timeline or responsibilities. 3. Budget Monitoring and Updates Yes No N/A 3 1 Are actual revenues and expenses consistent with the most current budget? ☐ ✓ ☐ The district’s 2023-24 second interim report includes multiple instances in which revenues and expenses for the reporting period differed by more than 5% from projected totals in the following areas: unrestricted other local revenue, unrestricted services and other operating expenses, restricted books and supplies, and restricted services and other operating expenses. The district should review actuals to date for accuracy and consistency with the most current budget. 3 2 Are budget revisions posted in the financial system at each interim report, at a minimum? ✓ ☐ ☐ 3 3 Are clearly written and articulated budget assumptions that support budget revisions communicated to the board at each interim report, at a minimum? ☐ ✓ ☐ The written report and presentation provided to the board does not have clear and detailed budget assumptions that support budget revisions, nor is a list of budget revisions provided. The CBO indicated that she meets individually with board members prior to the approval of interim reports to review the details of the revisions. 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 Education Code Section 42142? ✓ ☐ ☐ 3 5 Do the district’s responses fully explain the variances identified in the criteria and standards? ✓ ☐ ☐ 3 6 Has the district addressed any deficiencies the county office of education has identified in its oversight letters in the most recent and two prior fiscal years? ☐ ✓ ☐ Over the last three fiscal years, the county office has repeatedly requested the district address deficit spending and unallocated expenditure reductions. As of the 2023-24 second interim report, these deficiencies remain unresolved. 3 7 Does the district prohibit processing of requisitions or purchase orders when the budget is insufficient to support the expenditure? ✓ ☐ ☐ 3 8 Does the district encumber and adjust encumbrances for salaries and benefits? ☐ ✓ ☐ Because the district’s financial, payroll and human resources systems are not integrated, it does not encumber salaries and benefits. 3 9 Are all balance sheet accounts in the general ledger reconciled at least at each interim report and at year end close? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 13 Fiscal Health Risk Analysis 3 10 For the most recent and two prior fiscal years, have the interim reports and the 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 reports monthly? ☐ ✓ ☐ The district did not provide FCMAT with reconciliation reports for accounts held by the county treasurer or any evidence that these accounts are reconciled monthly. 4 2 Does the district reconcile all bank (cash and investment) accounts with bank statements monthly? ✓ ☐ ☐ 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 address 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 interfund borrowing is occurring, does the district comply with Education Code Section 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 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 Education Code Section 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? ✓ ☐ ☐ 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? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 14 Fiscal Health Risk Analysis 6 3 Does the district accurately quantify the effects of collective bargaining agreements and include them in its budget and multiyear projections? ☐ ✓ ☐ The district’s public disclosure of collective bargaining agreement for 2021-22 Duarte Unified Education Association (DUEA) and all California School Employees Association (CSEA) agreements identified a 3% on-schedule (ongoing) increase and a 3% off-schedule (one-time) increase effective July 2, 2021, along with commensurate statutory benefit increases and a health and welfare contribution increase. The total compensation increase was calculated as 5.63% and 5.5% respectively; however, the multiyear projections accompanying the disclosure do not reflect these increases or explain the difference in projected compensation. 6 4 Did the district conduct a presettlement analysis and identify related costs or savings, if any (e g , statutory benefits, and step and column salary increase), for the current and subsequent years, and did it identify ongoing revenue sources or expenditure reductions to support the agreement? ☐ ✓ ☐ The district analyzed and identified the related costs of the agreements; however, the identification of revenue sources and expenditure reductions was vague and required actions, including some that require negotiations with the collective bargaining units. 6 5 In the current and prior two fiscal years, has the district settled the total cost of the bargaining agreements including step and column increases at or under the funded cost of living adjustment (COLA)? ☐ ✓ ☐ For the 2023-24 fiscal year, the funded COLA was 8.22%. The district settled for a one-time, off-schedule payment ranging from 9 to 11% for CSEA Chapter 25, and one- time, off-schedule payment of 10% to DUEA, management, supervisors, confidential employees and other unrepresented district employees. For 2022-23, the funded COLA was 6.56%. The public disclosure for DUEA states the change will be a 7% increase over the prior year, and the CSEA increase totaled 8% over 2021-22. For 2021-22, the funded COLA was 2.7%. In 2021-22, the district settled with DUEA and CSEA for a 3% ongoing salary-schedule increase and a 3% one-time off-schedule increase. 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 Code Sections 3540 2 and 3547 5, and Education Code Section 42142? ✓ ☐ ☐ 6 8 Did the superintendent and CBO certify the public disclosure of collective bargaining agreement prior to board approval? ✓ ☐ ☐ 6 9 Is the governing board’s action consistent with the superintendent’s and CBO’s certification? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 15 Fiscal Health Risk Analysis 7. Contributions and Transfers Yes No N/A 7 1 Does the district have a board-approved plan to eliminate, reduce or control any contributions/transfers from the unrestricted general fund to other restricted programs and funds? ☐ ✓ ☐ The district did not have a board-approved plan to control unrestricted general fund support of restricted programs and funds. At the 2023-24 first interim reporting period, the district created a budget stabilization plan that identified reductions that were mostly subject to negotiations with its collective bargaining groups. At the 2023-24 second interim reporting period, the district budgeted for over $8.1 million in contributions to restricted programs within the general fund, marking a 1.4% increase in contribution since budget adoption. 7 2 If the district has deficit spending in funds other than the general fund, has it included in its multiyear projection any transfers from the unrestricted general fund to cover any projected negative fund balance? ☐ ☐ ✓ 7 3 If any contributions/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? ✓ ☐ ☐ 8 2 Is the district projected to avoid deficit spending in both of the two subsequent fiscal years? ☐ ✓ ☐ According to the district's 2023-24 second interim multiyear projection, the district is expected to deficit spend in its unrestricted general fund by $6,989,120 in 2024-25 and by $828,873 in 2025-26. 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? ☐ ✓ ☐ At the time of fieldwork, the district had not adopted and implemented a plan to effectively reduce and/or eliminate deficit spending. The district projects a decrease in deficit spending to be achieved by implementing an unexplained reduction of $8.12 million in expenditures in fiscal year 2025-26 of its multiyear projection. 8 4 Has the district decreased deficit spending over the past two fiscal years? ☐ ☐ ✓ 9. Employee Benefits Yes No N/A 9 1 Has the district completed an actuarial valuation in accordance with Governmental Accounting Standards Board (GASB) requirements to determine its unfunded liability for other post-employment benefits (OPEB)? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 16 Fiscal Health Risk Analysis 9 2 Does the district have a plan to fund its liabilities for retiree health and welfare benefits with the total of annual required service payments no greater than 2% of the district’s unrestricted general fund revenues? ✓ ☐ ☐ 9 3 Has the district followed a policy or collectively bargained agreement to limit accrued vacation balances? ✓ ☐ ☐ 9 4 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? ☐ ✓ ☐ Interviews indicated that the eligibility review had not been completed for several years, and no evidence was provided to support that a review had been conducted. 9 5 Does the district track, reconcile and report employees’ compensated leave 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? ☐ ✓ ☐ According to Ed-Data, and as shown in the chart below, total noncharter school enrollment declined by 570 from 2018-19 to 2023-24. Duarte Unified Non-Charter School Enrollment 3600 3550 3500 3433 3400 3301 3300 3200 3123 3100 3038 2980 3000 2900 2800 2700 2600 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 10 2 Does the district monitor and analyze enrollment and average daily attendance (ADA) data at least monthly through the second attendance reporting period (P2)? ✓ ☐ ☐ 10 3 Does the district track historical enrollment and ADA data to establish future trends? ☐ ✓ ☐ The district provided historical documentation to show tracking of actual enrollment and attendance for first 10 days of school. However, no evidence was provided to demonstrate that enrollment and ADA are being tracked throughout the year or from year to year and that the data is used to establish future trends. Fiscal Crisis and Management Assistance Team Duarte Unified School District 17 Fiscal Health Risk Analysis 10 4 Do school sites maintain an accurate record of daily enrollment and attendance that is reconciled monthly at the site and district levels? ☐ ✓ ☐ Business staff reported that attendance and enrollment are reconciled at the district level. It is not clear whether any reconciliation of attendance is performed at the school level. 10 5 Has the district certified its California Longitudinal Pupil Achievement Data System (CALPADS) data by the required deadlines (Fall 1, Fall 2, EOY) for the current and two prior years? ✓ ☐ ☐ 10 6 Are the district’s enrollment projections and assumptions based on historical data, industry-standard methods, and other reasonable considerations? ☐ ✓ ☐ The district did not provide enrollment projections or assumptions that demonstrate reasonableness. 10 7 Do all applicable sites and departments review and verify their respective CALPADS data and correct it as needed before the report submission deadlines? ✓ ☐ ☐ 10 8 Has the district planned for enrollment losses to charter schools? ✓ ☐ ☐ 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? ✓ ☐ ☐ 10 10 Does the district meet the student-to-teacher ratio requirement of no more than 24-to-1 for each school in grades TK-3 classes, or, if not, does it have and adhere to an alternative collectively bargained agreement? ✓ ☐ ☐ 11. Facilities Yes No N/A 11 1 If the district participates in the state’s School Facilities Program, has it met the required contribution for the Routine Restricted Maintenance Account? ✓ ☐ ☐ 11 2 Does the district have sufficient and available capital outlay and/or bond funds to cover all contracted obligations for capital facilities projects? ✓ ☐ ☐ 11 3 Does the district properly track and account for facility-related projects? ✓ ☐ ☐ 11 4 Does the district use its facilities fully in accordance with the Office of Public School Construction’s loading standards? ☐ ✓ ☐ The district provided enrollment data for seven school sites and nonpublic school placements, totaling 2,976 students; however, information was not provided detailing school capacity. The district’s declining enrollment in recent years and interviews with staff indicate the district has capacity in excess of its student population need. 11 5 Does the district include facility needs (maintenance, repair and operating requirements) when adopting a budget? ☐ ✓ ☐ Interviews indicated that facilities staff members were not included when making decisions during budget development but they would contact the business office as needs arose. The facilities budget was consistent with prior years, including required contributions for routine maintenance. 11 6 Has the district met the facilities inspection requirements of the Williams Act and resolved any outstanding issues? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 18 Fiscal Health Risk Analysis 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? ☐ ✓ ☐ In November 2020, the Duarte voters passed Measure E authorizing $62 million and Measure S authorizing $79 million in general obligation bond funds to make various facilities improvements. The bonds were presented to voters under Proposition 39 rules, which require a 55% approval, rather than the standard 67% requirement. However, the Proposition 39 rules require a citizen’s bond oversight committee. The bonds were approved with 59.9% and 57.3% of voters supporting, respectively. Bond audits reported no performance or financial findings; however, the district has been unable to maintain a citizens’ bond oversight committee as required because it has been unsuccessful in recruiting members. 11 8 Does the district have a long-range facilities master plan that reflects its current and projected facility needs? ☐ ✓ ☐ The district’s most recent facility master plan was completed in June 2016 and does not contain current data that is useful in directing facilities decision making. 12. Fund Balance and Reserve for Economic Uncertainty Yes No N/A 12 1 Is the district able to maintain the minimum reserve for economic uncertainty in the current year (including Fund 01 and Fund 17) as defined by criteria and standards? ✓ ☐ ☐ 12 2 Is the district able to maintain the minimum reserve for economic uncertainty in the two subsequent years? ☐ ✓ ☐ The district’s 2023-24 second interim multiyear financial projection indicates that an expenditure reduction of $8.1 million is necessary in the 2025-26 fiscal year to meet the minimum reserve requirement. An inadequate explanation of the district’s assumptions to achieve the expenditure reduction was provided on form MYPI, Section F. 12 3 If the district is not able to maintain the minimum reserve for economic uncertainty, does the district’s multiyear financial 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? ☐ ✓ ☐ The undefined balancing measure of $8.1 million in reduced expenditures in 2025-26 (referenced above in 12.2) provides a misleading financial outlook for the unrestricted fund balance. If expenditure reductions are not implemented, the unrestricted fund balance will be negative in 2025-26. 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? ☐ ☐ ✓ 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? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 19 Fiscal Health Risk Analysis 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 statewide average for the current year? ✓ ☐ ☐ 13 3 Is the percentage of the district’s general fund unrestricted expenditure budget that is allocated to salaries and benefits at or below the statewide average for the two prior years? ✓ ☐ ☐ 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 two prior years, is the district addressing the complaint(s)? ☐ ☐ ✓ 13 5 Does the district either ensure that restricted dollars are sufficient to pay for staff assigned to restricted programs or have a plan to fund these positions with unrestricted funds? ✓ ☐ ☐ 13 6 Is the district using its restricted dollars fully by expending allocations for restricted programs within the required time? ☐ ✓ ☐ The district reported that it has a significant amount of COVID relief funds remaining, but these resources could be lost if they remain unobligated by September 2024. 13 7 Does the district account for program costs, including the maximum allowable indirect costs, for each restricted resource and other funds? ☐ ✓ ☐ The district’s 2023-24 second interim report Form ICR indicates that its approved indirect cost rate for the current year is 8.93%; however, the seven programs that are charged indirect costs pay rates ranging from 1.65% to 8.67%. The district is projected to charge a total of $100,470 in indirect costs on restricted expenditures of over $27 million in general fund alone. According to the district’s 2022-23 unaudited actuals report, the district’s approved indirect cost rate was 8.75%; yet it charged a lower amount to 10 of the 13 programs to which it charged indirect costs in the general fund, and no indirect costs were charged to other funds. Charging full costs, including indirect to all programs, allows the district to know the true, full cost of each program and offset the otherwise undistributed general support costs. 14. Information Systems and Data Management Yes No N/A 14 1 Does the district use an integrated financial and human resources system? ☐ ✓ ☐ The district’s financial and human resources systems are not integrated; therefore, additional efforts are required to synchronize and reconcile data between the systems to ensure timeliness and accuracy. 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? ✓ ☐ ☐ 14 4 Is the district using the same financial system as its county office of education? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 20 Fiscal Health Risk Analysis 14 5 If the district is using a separate financial system from its county office of education, is there an automated interface with the financial system used by the county office of education? ☐ ☐ ✓ 14 6 If the district is using a separate financial system from its county office of education, has the district provided the county office with direct access so the county office can provide oversight, review and assistance? ☐ ☐ ✓ 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? ✓ ☐ ☐ 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 relative to position control and payroll processes) ✓ ☐ ☐ 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 office of education? ✓ ☐ ☐ 15 7 Does the district have processes and procedures to discourage and detect fraud? ☐ ✓ ☐ Interviews with staff and documents provided to FCMAT did not include evidence that the district has fraud detection controls. 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’s Board Policy (BP) 3400 establishes that: The superintendent or designee shall establish a method for employees and outside persons to anonymously report any suspected instances of fraud, impropriety, or irregularity. However, interviews with staff and documents provided to FCMAT did not include evidence that the district has a process for collecting reports of possible fraud. Fiscal Crisis and Management Assistance Team Duarte Unified School District 21 Fiscal Health Risk Analysis 15 9 Does the district have an internal audit process? ☐ ✓ ☐ The district does not have a formal internal audit department or a documented auditing process. 16. Leadership and Stability Yes No N/A 16 1 Does the district have a chief business official who has been with the district as chief business official for more than two years? ✓ ☐ ☐ 16 2 Does the district have a superintendent who has been with the district as superintendent for more than two years? ✓ ☐ ☐ 16 3 Does the superintendent meet on a scheduled and regular basis with all members of their administrative cabinet? ✓ ☐ ☐ 16 4 Is training on financial management and budget provided to site and department administrators who are responsible for budget management? ☐ ✓ ☐ Some site and department managers interviewed reported that they are not involved in budget development, do not regularly receive budget reports and have not been trained to read and manage their budgets. 16 5 Does the governing board adopt and revise policies and administrative regulations annually? ✓ ☐ ☐ 16 6 Are newly adopted or revised policies and administrative regulations implemented, communicated and available to staff? ✓ ☐ ☐ 16 7 Do all board members attend training on the budget and governance at least every two years? ☐ ✓ ☐ No evidence was provided of any recent or regular budget or governance training, and interviews indicated that some board members have never received any formal training. Training on budget and governance is needed to ensure that the board understands their role and the district’s financial status. 16 8 Is the superintendent’s evaluation performed according to the terms of the contract? ✓ ☐ ☐ 17. Multiyear Projections Yes No N/A 17 1 Has the district developed multiyear projections that include detailed assumptions aligned with industry standards? ☐ ✓ ☐ The district does not provide detailed assumptions for its multiyear projections. Section F Assumptions of Form MYPI of the 2023-24 second interim report only states “As pandemic resources expire, some costs become part of the unrestricted funds of the district.” This is insufficient to explain the changes in revenues and expenditures projected for subsequent fiscal years, including an $8.12 million “other adjustment” decrease in expenditures in 2025-26. 17 2 To help calculate its multiyear projections, did the district prepare an accurate LCFF calculation with multiyear considerations? ✓ ☐ ☐ 17 3 Does the district use its most current multiyear projection in making financial decisions? ✓ ☐ ☐ Fiscal Crisis and Management Assistance Team Duarte Unified School District 22 Fiscal Health Risk Analysis 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 applied an expenditure reduction adjustment of $8.12 million to the 2025- 26 unrestricted expenditures projection with no explanation of how that reduction will be realized. Without a detailed and actionable plan, the reduction is not reasonable. 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 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 the district completed an actuarial valuation as required and 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, RANS and others), is the total of annual debt service payments no greater than 2% of the district’s unrestricted general fund revenues? ✓ ☐ ☐ 19. Position Control Yes No N/A 19 1 Does the district account for all positions and costs? ✓ ☐ ☐ 19 2 Does the district analyze and adjust staffing based on staffing ratios and enrollment? ☐ ✓ ☐ The district did not provide FCMAT with staffing ratios or enrollment projections. In interviews, staff indicated that staffing projections are determined annually assuming an enrollment loss of 10% since that has been the declining trend. As a result, the district was overstaffed and below the collectively bargained class sizes. 19 3 Does the district reconcile budget, payroll and position control regularly, at least at budget adoption and interim 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? ☐ ✓ ☐ Documentation provided to FCMAT and interviews with staff indicates that the board routinely ratifies new positions after recruitment and selection of candidates takes place. Fiscal Crisis and Management Assistance Team Duarte Unified School District 23 Fiscal Health Risk Analysis 19 6 Do managers and staff responsible for the district’s human resources, payroll and budget functions meet regularly to discuss issues and improve processes? ☐ ✓ ☐ FCMAT was not provided with documents that evidence regular meetings between human resources and payroll and budget personnel. 20. Special Education Yes No N/A 20 1 Does the district monitor, analyze and adjust staffing ratios, class sizes and caseload sizes to align with statutory requirements and industry standards? ✓ ☐ ☐ 20 2 Does the district access available funding sources for costs related to special education (e g , 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)? ✓ ☐ ☐ 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 full indirect costs to its special education programs. Charging full costs, including indirect to all programs, allows the district to know the true full cost of each program. 20 5 Is the district’s contribution rate to special education at or below the statewide average contribution rate? ✓ ☐ ☐ 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? ☐ ✓ ☐ For 2023-24, the district’s enrollment data reported 17.2% of its students with disabilities as compared to 14.2% for Los Angeles County and 13.7% for the state of California. 20 7 Does the district analyze whether it will meet the maintenance of effort requirement at each interim reporting period? ✓ ☐ ☐ Risk Score, 20 numbered sections only 28 8% 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 Duarte Unified School District 24 Fiscal Health Risk Analysis Appendix A: Study Agreement Fiscal Crisis and Management Assistance Team Duarte Unified School District 25 Fiscal Health Risk Analysis Appendix A — Study Agreement Fiscal Crisis and Management Assistance Team Duarte Unified School District 26 Fiscal Health Risk Analysis Fiscal Crisis and Management Assistance Team Duarte Unified School District 27 Fiscal Health Risk Analysis Fiscal Crisis and Management Assistance Team Duarte Unified School District 28 Fiscal Health Risk Analysis Fiscal Crisis and Management Assistance Team Duarte Unified School District 29 Fiscal Health Risk Analysis Fiscal Crisis and Management Assistance Team Duarte Unified School District 30 Fiscal Health Risk Analysis Fiscal Crisis and Management Assistance Team Duarte Unified School District 31 Fiscal Health Risk Analysis Fiscal Crisis and Management Assistance Team Duarte Unified School District 32